WTF Is... Worldcoin

TLDR: Worldcoin is a cryptocurrency project founded by OpenAI CEO Sam Altman and Alex Blania. It aims to provide a solution to distinguish AI from humans and, in the long run, demonstrate a viable route toward AI-financed universal basic income (UBI). Users are onboarded to Worldcoin and receive their World ID by having their irises scanned by Worldcoin’s Orb device, and this process is incentivized with a claim for $WLD tokens. The $WLD token was launched on July 24th, 2023 and was quickly met with scrutiny regarding ethical practices, privacy, accessibility, centralization and security.

Controversy is nothing new in Web3, and Worldcoin is no exception. Many within the cryptocurrency community have raised legitimate questions regarding the recruitment of Worldcoin's initial beta users and the ethical concerns associated with retaining individuals' biometric data.

Yet, Worldcoin is trying to solve an interesting problem: How do we prove humanhood in a future driven by artificial intelligence (AI)?

Before diving into these questions and controversies, let's take a closer look at what Worldcoin actually is.

What is Worldcoin?

Worldcoin is a cryptocurrency project founded by OpenAI CEO Sam Altman and Alex Blania. It aims to boost economic opportunities, differentiate between AI and humans, make global democratic processes smoother and eventually create a workable path to fund a universal basic income (UBI) through AI. The company’s vision is lofty — and some argue borderline unethical — but Worldcoin’s mission speaks to a few real-life conundrums that we all can likely relate to. 

Setting the stage: What problems are Worldcoin attempting to solve?

As AI automation and globalization accelerate the pace of our economy, Worldcoin claims it is attempting to set up the infrastructure necessary to prove personhood and ensure people — not robots or corporations — benefit economically from our collective increased productivity. It segments its mission into a few key categories: decentralized identity (DID), global financial access, personhood verification and financial incentives through the project's native token, $WLD.

Decentralized identity

Approximately 850 million people around the world do not have official identification (ID). Think about the challenges that emerge when someone can't verify who they are. Lacking access to essential documents like a birth certificate, passport, driver's license, or national ID can seriously limit a person's ability to use various services and opportunities in today's digital world. Worldcoin aims to tackle this problem head-on.

The company’s solution, World ID, aims to tackle identity-related issues, including the verification of an individual's distinct identity. Practically speaking, this translates to surfing the web without the need to log in to numerous distinct accounts, where your scattered data is stored unpredictably on servers owned by third parties.

Global financial access

The Worldcoin app is a self-custodial wallet with the vision of providing digital identity and global financial access to everyone. The wallet enables transactions using the $WLD token, digital assets, stablecoins and traditional currencies.

As time progresses, there are plans for the Worldcoin wallet to undergo further advancements to transform into a comprehensive toolkit that empowers individuals in the Age of AI. This evolution will enable the implementation of proof of personhood (PoP), foster fair distribution of digital currencies on a global scale and ultimately pave the way toward the realization of AI-funded Universal Basic Income (UBI).

Personhood verification

We may have never thought we’d live in a world in which a human being’s personhood could be questioned. But with the rise of AI learning models that increasingly spam the internet with impressive-sounding content, the personhood dilemma is reaching a boiling point.

Enter the controversial Worldcoin Orb and the gathering of biometric data. The Orb is a specialized biometric imaging device initially created by Tools for Humanity (TFH) for Worldcoin. To verify they are human and not an AI bot, individuals are required to physically visit one of these Orbs. The Orb also checks that they are a unique user and do not match anyone that has previously verified.  

According to information available on their website, Worldcoin has registered over 2 million users in its beta phase. It is also planning to expand its reach by deploying additional Orbs in 35 cities across 20 countries, spanning five continents this year. Does this method of onboarding draw its inspiration from science fiction, or does it offer a glimpse into what the future might hold?

Financial incentives through Worldcoin Token ($WLD)

The highly awaited $WLD token was launched on July 24th, 2023 to mixed reviews and is available for trading on several centralized exchanges (CEX) including OKX and Binance. The distribution of the $WLD token, as outlined in its whitepaper, extends to all eligible Worldcoin participants and serves as an incentive to reward those who download the Worldcoin app and have their irises scanned by the Worldcoin Orb. In theory, this incentivization aligns Worldcoin users' motivations with the network's growth and development (meaning, as the community grows, so might the dominance of $WLD). However, there are no assurances about the token's future value or whether it will hold any value at all.

Mixed reviews: The scrutiny around Worldcoin’s launch

The crypto community has expressed reservations with reported connections to Sam Bankman-Fried and Three Arrows Capital, and the location of the Worldcoin Foundation, which describes itself as a “steward of the Worldcoin protocol”, incorporated in the Cayman Islands only adds to the uncertainty surrounding its intentions. In a blog post, Vitalik Buterin, co-founder of Ethereum, shared his apprehensions regarding potential abuses of the system. He raised concerns about various aspects, such as privacy, accessibility, centralization, and security.

The decision of Worldcoin to direct a substantial portion of its onboarding efforts toward lower-income communities has come under scrutiny and raised questions. Moreover, the tokenomics of the project remain somewhat unclear, leaving many wanting more answers. France has expressed concerns about the legality of biometric data collection, while data regulators in both Britain and Kenya are closely examining the launch to ensure Worldcoin's compliance with regulations. Yet, despite these criticisms, Worldcoin seems focused on forging ahead with Silicon Valley’s quintessential “move fast and break things” approach.

And so, it remains uncertain whether Worldcoin is a privacy nightmare or a groundbreaking approach toward establishing a more inclusive financial system. It’s still too early to make a definitive judgement, but one thing is for sure: This project will receive a lot of attention as it continues to develop.

In the meantime, the most relevant question among Web3 community members today is  — would you trust Worldcoin with your eyeballs?

This article and all the information in it does not constitute financial advice. If you don’t want to invest money or time in Web3, you don’t have to. As always: Do your own research.

Ann Herring is the community lead at BFF, drawing on her hospitality background to bring a people-first perspective to her role. With a passion for simplifying the complexities of Web3, her transition into this field was an organic evolution, driven by her commitment to foster an inclusive and nurturing environment.

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