Worldcoin emerged in a world where personal data and identity face increasing vulnerability. This innovative – some say dystopian – project introduces a novel biometric verification process, aiming to redefine the landscape of digital identities and our interactions in the virtual realm.
But what exactly is Worldcoin and what does it all mean? Here’s what you need to know.
What is Worldcoin?
Worldcoin is a cryptocurrency project that introduces innovative biometric verification processes, particularly iris scanning, to redefine digital identity and interactions within the virtual domain.
It aims to address vulnerabilities in personal data and identity in a world where such information is increasingly at risk.
The project’s central concept involves transparent processes where a quick iris scan generates a unique digital identity without collecting personal information, thus ensuring both privacy and security.
The Worldcoin app serves as the user’s personal wallet, giving them full control. Worldcoin’s ambition extends beyond identity verification and symbolic rewards.
The model serves as a springboard for a cryptography-based universal basic income, where participants are financially compensated for their engagement. The Worldcoin project comprises four main key elements:
Global Application
The World app is a wallet designed to hold various cryptocurrencies, including the project’s native ERC-20 token, WLD. Users have a platform to securely manage their digital assets.
It’s designed for inclusivity: leveraging Worldcoin and Ethereum protocols, the app seamlessly authenticates users’ proof of identity with World ID.
Global Identification
This is a unique aspect of the Worldcoin project. World ID is an “anonymous identifier” linking a person’s digital identity to their real one.
This is achieved through the use of “orb scanners” that scan a person’s iris, thus verifying their existence as a real individual.
The scanner generates an identification code based on the structure of a person’s iris, which is distinctly unique.
Proof of Personality
The Worldcoin project focuses on establishing a concept called “proof of personality.” This means that using World ID and iris scanning technology, it aims to provide a reliable method for verifying an individual’s authenticity in the digital domain.
The goal is to combat the growing difficulty of distinguishing between real humans and AI-generated characters.
Worldcoin and Universal Basic Income (UBI)
One of Worldcoin’s broader goals is to eventually distribute a global digital currency. Users can use the Worldcoin token for various transactions and interactions within the World App ecosystem.
Additionally, the project envisions a path towards a UBI funded by AI. In short, the UBI concept is one in which every citizen receives a regular sum of money from the government or another central authority to cover their basic needs.
In this context, Worldcoin sees its digital currency as a potential means of implementing such a system.
The Team Behind Worldcoin
Sam Altman, co-founder of OpenAI, conceived the project. Max Novenstern, a philosopher, and Alex Blania, a physicist, joined forces to turn this vision into reality. While Sam remains chairman, Alex has taken on the role of CEO, leading the project and advocating for its goals.
Best known as CEO and founder of OpenAI (the pioneering research lab responsible for ChatGPT), Altman brings distinguished experience. He previously served as president of Y Combinator, a renowned startup accelerator, and was CEO of Reddit for a brief period.
Alex Blania, on the other hand, serves as CEO and co-founder of Tools for Humanity. The tech company also plays a central role in Worldcoin’s development.
After three years of development, Worldcoin secured funding of around $100 million. The project garnered massive support from notable investors, including Andreessen Horowitz and Khosla Ventures.
These efforts culminated on July 24, 2023, marked by the launch of the Worldcoin cryptocurrency (WLD).
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How Does Worldcoin Work?
Step 1: Download the World App
Downloading the Worldcoin App from Tools for Humanity enables users to create a Worldcoin account.
Users can then access a digital wallet supporting various digital and traditional currencies, including stablecoins.
Step 2: Sign Up for World ID
Users can register for World ID within the World App. The Orb uses iris biometrics to establish a person’s identity.
This information leads to a digital global identifier that can be used pseudonymously for various applications.
To receive free Worldcoin tokens and other digital currencies, visit a Worldcoin operator and verify your unique identity using an Orb.
Step 3: Receive Your Free Share of Worldcoin and Other Digital Currencies
After verifying their identity via World ID, users can use the World App to learn more about digital currencies and receive free crypto airdrops such as Bitcoin and Ethereum.
The project also explores ways in which users in eligible countries can claim their share of Worldcoin tokens using their global identifier.
What Are the Benefits of Worldcoin?
- Inclusion of Underserved Communities: For individuals in third-world countries or underserved populations who may lack access to traditional methods of identity verification, Worldcoin’s biometric analysis could offer them a way to participate in the digital economy and access financial services.
- Protection Against AI Threats: Having a robust identity proof protocol can help protect against identity theft and fraud. Worldcoin’s technology could provide an additional layer of security in financial transactions.
- Potential for Financial Inclusion: If Worldcoin evolves into an open-source global network, it could facilitate financial inclusion for unbanked or underbanked individuals, giving them access to a secure and efficient payment network.
- Global Universal Basic Income (UBI): While the concept of Worldcoin evolving into a global UBI is speculative, the potential for a decentralized UBI system based on cryptocurrency could provide a safety net for individuals in various economic situations.
- Potential Socio-Economic Impact: Worldcoin could potentially empower individuals in poor areas by giving them access to a new form of digital wealth, thus potentially improving economic prospects for many.
The Iris Scanner
Worldcoin’s digital identification system revolves around innovative iris scanning technology. The iris, which is the colored part of your eye, is unique to each person, making it an excellent means of identifying individuals.
A device called the Orb uses this iris scan to create a special global identification code.
The Orb is roughly the size of a bowling ball and is smooth with a chrome shell. A transparent shell covers the chrome shell to slow down Orb deterioration over time. This new technology uses infrared cameras, sensors, and AI-driven neural networks.
This combination of futuristic technologies scans a user’s iris, thus confirming their human identity.
The Orb is a high-tech gadget with a development cost of $50 million. Worldcoin has installed over 370 of these devices worldwide, and the project’s success depends on the number of people using them.
Specially trained operators handle these devices and scan people’s irises. Each time a person is successfully scanned, they receive crypto rewards.
Implications for Iris Scan Privacy
While the concept of decentralized digital identification seems promising, it inevitably raises concerns about privacy and data security.
Worldcoin’s approach to iris scanning has several implications that warrant careful examination.
1. Data Collection and Storage
Initially, Worldcoin collected all Orb-related data for training purposes. However, the project has since offered an opt-out option for data collection.
Questions arise, however, about the actual handling of this data and whether it is locally stored or deleted after registration.
Not all Orb hardware is open source, raising concerns about data security and privacy.
2. Linking Global IDs to Wallets
A crucial aspect of the World Coin system is the connection between global IDs and users’ wallet addresses on the World App.
While the hash-based approach ensures some degree of privacy, the link becomes problematic when World ID holders transact on cryptocurrency exchanges requiring Know Your Customer (KYC) procedures.
This potentially compromises the desired privacy of the system.
3. Centralization and Regulation
The Worldcoin foundation controls the project’s smart contracts through a multi-signature wallet.
This centralized aspect contradicts the project’s vision of a decentralized identity system.
Additionally, concerns about global regulations targeting digital IDs could lead to government crackdowns, hampering the project’s development and potential adoption.
4. Hardware Reliability
The success of iris scanning technology largely relies on the accuracy and reliability of the Orb.
External factors such as geopolitical tensions and supply chain issues could impact the manufacturing and distribution of these devices, potentially affecting the overall functionality of the system.
The Regulatory Landscape of Worldcoin
Active investigations are underway in the UK, France, Germany, and Spain. These investigations focus on the legality of data collection, consent processes, and secure data storage.
Worldcoin’s interactions with the Bavarian Data Protection Authority (DPA) continue in 2024. Prompted by an information request from its French counterpart, the DPA closely monitors Worldcoin’s activities in Bavaria, a German state where the project manages European user data.
Additionally, Worldcoin’s financial dimension is under scrutiny by the German Federal Financial Supervisory Authority (BaFin). BaFin monitors project developments, ensuring comprehensive oversight.
Since March 2024, regulators worldwide have been examining the extent to which Worldcoin’s data use complies (or not) with national and international standards.
In February 2024, Worldcoin updated its compliance assurance documentation. The company states:
Worldcoin is designed to be fully compliant with all laws and regulations governing data collection and transfer. These include, but are not limited to:
- General Data Protection Regulation (GDPR) in the European Union
- Argentine Personal Data Protection Law (PDPL)
- Mexican Federal Law on the Protection of Personal Data Held by Private Parties and related regulations
- Singapore Personal Data Protection Act (PDPA)
- Hong Kong Personal Data (Privacy) Ordinance (PDPO)
- Japanese Act on the Protection of Personal Information, Act No. 57 of 2003 (APPI)
- South Korean Personal Information Protection Act (PIPA)
In the European Union, the project is also under the supervision of the Bavarian State Office for Data Protection Supervision (Bayerisches Landesamt für Datenschutzaufsicht).”
Other Concerns Regarding Worldcoin
It is important to note that due to regulatory issues, users from the United States are currently excluded from this token-based economy.
Another significant user concern is the centralized control exercised by the Worldcoin Foundation, despite its claims to decentralization.
We urgently need digital identification of humans, and Worldcoin is an answer. There will be many, but it’s vital. The next step involves fully decentralized versions (also with zk proof). This too will come and is needed and desired.
But Worldcoin is another example of how blockchain changes everything and how it reaches 1 billion people. CBDCs too.
The fight will be about centralization versus decentralization. Our physical nation-state elements will be centralized, and our digital nation-state/network elements will be mostly decentralized.
The WorldCoin (WLD) Token
The core of the Worldcoin ecosystem revolves around the Worldcoin (WLD) token, which serves as a channel for the digital identity system’s operation. Worldcoin (WLD) is an ERC-20 token on the Ethereum Mainnet.
Its value saw a notable increase after being listed on major cryptocurrency exchanges like Binance. The initial supply cap was 10 billion WLD, with a circulating supply of over 141.53 million.
However, in November 2023, the price of WLD would drop in reaction to Sam Altman’s ousting. To this day, the reasons for Altman’s dismissal remain shrouded in mystery. This decision would ultimately be reversed, and the price of WLD would recover.
In February 2024, Worldcoin (WLD) experienced a strong surge, increasing its valuation to over $1.1 billion. This growth was linked to the launch of OpenAI’s Sora, another AI project by CEO Sam Altman, and a bullish trend in cryptocurrency and AI markets.
WLD Price Increase: coinmarketcap
The WLD token price peaked at $8.6. Additionally, this period also saw remarkable user sign-up growth, adding 600,000 new users in a week, propelled by the project’s unique iris scanning requirement via orb devices, totaling over 3.5 million sign-ups.
This bullish trend can also be attributed to NVIDIA’s earnings report, which exceeded second-quarter forecasts. As a result, the price of many AI-related tokens, including WLD, rose. But this news would soon be short-lived.
On Friday, March 1, 2024, the market reacted to Elon Musk’s announcement of suing OpenAI and Sam Altman for breach of contract.
Musk, former co-chairman with Sam Altman, also contributed to the company’s founding. He cited his rationale that OpenAI was losing its core values of benefiting humanity rather than individuals.
WLD would ultimately experience a 6.5% decline from its peak the same day. However, it would eventually recover, reach higher lows, and maintain resistance at just under $8.
WLD Distribution and Usage
Worldcoin token distribution spans several categories. Approximately 75% of tokens will be allocated to the Worldcoin community, servicing ecosystem funds and network operations managed by the Worldcoin Foundation, with a gradual shift towards decentralized governance.
The initial development team, Tools for Humanity (TFH), and other contributors will receive 9.8% for their foundational contributions.
Additionally, 13.5% of the distribution is reserved for TFH investors who supported the project’s pre-launch phase, aiding in the development of critical components such as the biometric imaging device (Orb), the initial protocol version, and the global application.
The Worldcoin token is designed as a utility token with governance properties, empowering users by assigning them a role in the protocol’s future.
The initial supply of 10 billion WLD is intended to correspond to the global population – with allocations for early investors, the Worldcoin community, and project development.
Beyond conventional governance mechanisms of “one token, one vote,” the introduction of World ID paves the way for “one person, one vote” mechanisms and new voting systems. These two mechanisms combine in many ways to enable new governance modes.
Ultimately, WLD distribution follows an aggressive acquisition schedule, emphasizing the role of the Worldcoin community in defining token utility. While WLD can be used for various purposes within the Worldcoin ecosystem, its success depends on user adoption and real-world applications.
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WLD Wallets
Worldcoin users interact with the WLD token through the Worldcoin application and its supported wallets, facilitating transactions, claims, and interactions within the Worldcoin network.
A Worldcoin (WLD) wallet can be either software-based or a hardware device designed to securely store your private keys, enabling seamless participation in the Worldcoin (WLD) network for token sending and receiving. For optimal security, encrypted hardware wallets like those designed by Ledger or Trezor are favored choices for protecting your Worldcoin (WLD) holdings.
Worldcoin (WLD) is also compatible with various renowned wallet options, including Trust Wallet, Ambire Wallet, Atomic Wallet, Binance Chain Wallet, Coinomi, etc.
What Does the Future Hold for Worldcoin?
Worldcoin marks a significant milestone in the realm of digital identity and cryptocurrencies. Its innovative approach to iris-based digital identifications and the opportunity for users to earn tokens have garnered attention, debate, and investments.
However, while the project’s vision aligns with broader goals of blockchain technology, it also raises significant concerns regarding data privacy, centralization, and regulatory challenges.
Worldcoin’s ultimate success will ultimately depend on a delicate balance between fulfilling its mission and navigating the ever-changing landscape of cryptographic regulations, privacy rights, and user adoption.
