Cryptocurrency has been a hot topic for years, with new projects emerging regularly. One such project that has been causing quite a stir is Worldcoin. This controversial crypto project claims to have scanned over 2 million eyes worldwide to develop a decentralized digital ID in exchange for cryptocurrency. Naturally, this has sparked concerns and debates about the project’s legitimacy and its potential impact on society. In this blog post, we’ll dive deep into Worldcoin, covering its origins, how it works, its worthiness, and examining some of the conspiracy theories surrounding it.
The Birth of Worldcoin
Worldcoin was founded by Sam Altman, Max Novenstern, and Alex Blania. Sam Altman is known as the co-founder of OpenAI, the company behind ChatGPT. He conceptualized Worldcoin in 2019 and enlisted the help of Max, a philosopher, and Alex, a physicist, to turn it into reality. In August 2019, they incorporated an American software company called “Tools for Humanity” to support their mission.
It’s worth noting that Max appears to have stepped away from the project in January 2021, while Alex has taken the reins as the CEO. Sam Altman, currently serving as the chairman, continues to be closely involved with the project. Their shared vision is to address the potential wealth concentration resulting from AI by implementing Universal Basic Income (UBI) funded by AI-generated wealth. To achieve this, a global digital ID is essential to ensure fair distribution.
Stealth Mode to the Spotlight
Originally, Worldcoin aimed to operate in stealth mode, but a Bloomberg journalist revealed the project’s existence in June 2021. Later that year, it secured $25 million in funding from crypto venture capitalists, officially emerging from stealth mode. Since then, it has raised an additional $215 million, totaling an impressive $240 million. In October of the previous year, the Worldcoin Foundation was incorporated in the Cayman Islands, designed as a “memberless” entity governed by a three-member board overseeing the crypto project.
The foundation’s stated purpose includes helping to achieve certain United Nations Sustainable Development Goals (SDGs), particularly Goal 16. These goals are at the root of various technologies like digital IDs, central bank digital currencies (CBDCs), and smart cities, which some view as dystopian.
The Worldcoin Ecosystem
In March of this year, Worldcoin unveiled its digital ID, known as World ID, along with a software developer kit to support its utilization. In May, the project launched the World App, a crypto wallet, and last month introduced the Worldcoin token (WLD) on Optimism, a layer-2 solution for Ethereum.
The Orb: Eye-Scanning Technology
Central to Worldcoin’s ecosystem is the “orb,” a device used to scan the iris of individuals’ eyes and generate their World ID. The technology behind the orb is highly sophisticated, costing a staggering $50 million to develop. While Worldcoin provides extensive technical details about the orb on its website, one crucial aspect is missing – where these orbs are manufactured.
Currently, there are reportedly 360 active orbs operated by “orb operators” selected by Worldcoin. These operators can earn between one and five dollars for each person they convince to undergo an iris scan. This incentive structure raises concerns about the widespread scanning of individuals’ eyes.
Fortunately, Worldcoin no longer collects data by default. However, there are lingering questions about whether this data is processed locally on the orb and deleted after registration. This is due to the fact that not all of the orb’s technology has been open-sourced.
Privacy Concerns and Identity
The World ID, while designed to preserve privacy, raises concerns about its linkage to wallet addresses on the World App. Transactions involving crypto, especially through exchanges with KYC requirements, can potentially de-anonymize users. This could pose privacy risks, undermining the original intention of the digital ID.
Tokenomics and Governance
Worldcoin’s tokenomics have been shrouded in mystery, with the whitepaper’s tokenomics section blocked in many countries. However, it’s known that the WLD token is an ERC-20 token held in reserve by Tools for Humanity. Around 13 early investors received allocations, with an average price of roughly 20 cents per token.
The team, Tools for Humanity, and early investors will only be able to begin trading their tokens after a year. The community tokens are currently the only ones vesting, with a weekly release capped at one million WLD tokens. This setup limits the immediate selling pressure on the token, but the absence of demand drivers could impact its price in the long term.
Potential Risks and Concerns
Worldcoin acknowledges several potential risks in its project. Firstly, there’s the risk that the community may not support the project, potentially leading to its failure. Secondly, if Worldcoin cannot sell enough WLD tokens to fund ecosystem development, the project could be in jeopardy, affecting token holders.
Regulatory issues also loom over Worldcoin. European regulators have already initiated investigations into its data practices, and further scrutiny could spell trouble. Additionally, crypto regulations in various jurisdictions, including the European Union and China, could pose challenges.
The Future of Worldcoin
Worldcoin’s ambitions extend to creating its own layer-2 solution for Ethereum and potentially expanding to Solana. They also have plans for an on-chain credit score system. These developments raise concerns about centralization and the potential for more control over individuals’ identities.
The project’s website hints at the possibility of expansion beyond Earth, jokingly referring to “planets” on its metrics page. While this may be a playful nod, the notion of a global digital ID extending beyond our planet is unsettling.
Conclusion
Worldcoin presents an intriguing, yet controversial, vision for the future of digital identity and Universal Basic Income. While its intentions may be noble on the surface, concerns about privacy, data security, tokenomics, and governance remain. The potential for regulatory hurdles and the concentration of power are also critical issues to address.
As we navigate the evolving landscape of cryptocurrency and digital identity, it’s crucial to stay informed and question the implications of such projects on our society and individual freedoms. Whether Worldcoin becomes the future or fades into obscurity, the debate surrounding it shines a light on the complex intersection of technology, identity, and financial systems in our rapidly changing world.
