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For reasons that are both good and bad, it’s incredibly easy to hide your identity online. As a result, it’s also very easy to fake your identity online. So simple, in fact, that children are using fake Facebook profiles to bully classmates (or worse).

Fake profiles spawn legitimate concerns that criminals, terrorists, sexual predators, etc. can all use online anonymity to their advantage, especially now that our society is so “wired.” This is the dark side of anonymity online, and I think it’s likely to end soon – at least on major social networks like Facebook and Twitter.

I believe that recent comments made by Google CEO Eric Schmidt sum up what a lot of government regulators and Internet company executives are thinking about anonymity online:

“The only way to manage this is true transparency and no anonymity,” Schmidt said. β€œIn a world of asynchronous threats, it is too dangerous for there not to be some way to identify you. We need a name service for people. Governments will demand it.”

Fact: Fake Profiles Hurt Us All

Fake profiles hurt us in a lot of ways. They take time and energy from real profiles, they can be used to damage reputations, desensitize us to harmful speech, spread viruses and malware, and they have even been used to acquire military secrets (yes, that last one is 100% true).

Clearly, fake is bad. Everyone understands the dangers of fake profiles, and lawmakers have taken notice. The question is, how do we prevent fake profiles without crushing anonymity in the process?

Fake And Anonymous Are Two Sides Of The Same Coin

The easiest way to prevent fake profiles is to tie every social profile to a specific person or entity (aka verification, something Twitter is offering on a limited basis). Obviously, tying profiles to individuals means that anonymity is essentially gone. While it’s possible a social profile verification service might be able to confirm that you are a real person without divulging your identity, this concept is problematic. At some level, using a psuedo-anonymous verification system still creates a physical tie between you and your supposedly anonymous profile(s).

This presents a problem: anonymity isn’t necessarily a bad thing. Anonymity encourages a free exchange of thoughts and ideas, so getting rid of it isn’t the best answer. Were it not for anonymity on Twitter, for example, the “green revolution” in Iran in 2009 might not have received so much attention worldwide.

When discussing verification and anonymity online, we must also recognize that it might not be technically feasible to completely ban anonymity. People can always find a way around whatever systems are created, so it might be wise to plan for anonymity rather than to try to ban it.

A Compromise: Varying Levels of Verification

At a conference earlier this year (covered by this Time magazine blog post) Microsoft’s chief research technology officer Craig Mundie drew an analogy that demonstrates the need and formula for some sort of authentication process.

Mundie pointed out that in the physical world we are implicitly comfortable with the notion that there are certain places we’re not allowed to go without identifying ourselves. Are you allowed to walk down the street with no one knowing who you are? Absolutely. Are you allowed to walk into a bank vault and still not give your name? Hardly.

It’s easy to envision the same sort of differentiated structure for the Internet, Mundie said.

This analogy seems reasonable on the surface, but the devil, as they say, is in the details. There are a lot of questions about verification that have to be answered – too many to be listed here.

In my opinion, we’re not at a point where governments will attempt to create some sort of global verification system. However, I do believe that some sort of strict verification will soon be required on popular social networks. While I have concerns about the balance between banning fake participation and allowing free and anonymous open discussion, I think creating a verification system for select social networks is a good thing, especially when these networks become so popular.

Comments? Are verification systems a necessary compromise to prevent fake participation, or are we better off allowing anonymity and accepting the fake profiles that come with it?