Coinspeaker
Everything You Need to Know About Worldcoin: World ID for Every Human
Worldcoin is an ambitious project that aims to provide a unique digital identity – World ID – for each person on Earth by differentiating humans from AI bots.
Worldcoin uses iris scanning technology to generate World IDs that are serving as proof of personality. The project seeks to address economic inequality through its unique World ID function, which will serve as a “proof of person”, according to its co-founder Sam Altman.
After years of development and amid high expectations, the project is facing regulatory and crypto community scrutiny due to its implications and security concerns. In this guide, we will delve into its history, operation, criticisms, and the potential use cases the project aims to apply in the future.
What Is Worldcoin?
Worldcoin is a blockchain-based protocol centred around World ID, a network of digital identities that preserves privacy. The Worldcoin project has its own cryptographic token called WLD and a wallet called World App.
The goal of Worldcoin is to enable universal access to finance and identity. The long-term vision of Worldcoin is to provide a verified digital identity for everyone globally, something that had not been possible before. By providing a verified digital identity, Worldcoin aims to tackle economic inequality by enabling equitable participation in the global digital economy.
Launching Worldcoin
Worldcoin was co-founded by Sam Altman, the CEO of the AI research company Anthropic, along with Alex Blania and Max Novendstern. The company behind Worldcoin is called Tools For Humanity.
Worldcoin was in development for several years before its official launch in July 2023. During the beta phase before the launch, Worldcoin had already registered 2 million users through iris scanning using their Orb devices.
Sam Altman believes that while AI will empower personal activities, it will have significant economic implications. Altman cited Universal Basic Income (UBI) as an example, the idea that every person should receive a basic income each month regardless of their employment situation. As AI “does more and more of the work currently done by people”, Altman believes that UBI can help combat income inequality.
How Does Worldcoin Work?
Worldcoin revolves around World ID, a global identity network that preserves privacy. Through World ID, individuals can prove that they are real and unique humans on any platform integrated with the protocol.
The general principle is to use iris scans based on specialized hardware (the Orb device) to generate unique identifiers called World IDs. When a person registers through the Orb, it scans their iris and generates a numeric code called an IrisHash, which uniquely represents the characteristics of that person’s iris.
The IrisHash is compared against a database on the blockchain to verify that the person has not registered before. If they are new, a World ID linked to that IrisHash is generated.
World ID
World ID is a verified digital identity that proves users are unique humans. To interact with the Worldcoin protocol, people must download the World App, through which they can generate a World ID and receive rewards in WLD tokens, after a few steps.
To obtain a verified World ID, participants must visit a physical imaging device called Orb, which scans the person’s iris to issue a unique identity. The scanned images are deleted after generating an iris hash or code. This way, a World ID is created anonymously, without revealing the user’s identity.
“By default, the Orb promptly deletes iris images after the creation of the iris code. Individuals have the option to opt-in to back up their images when verifying their World ID. This shares their iris images with Worldcoin to train the project’s iris detection and segmentation models and similar algorithms,” according to the Worldcoin website.
Each World ID is added to the Worldcoin blockchain. Most Orbs are operated by a network of local independent companies called Orb Operators.
WLD Token
WLD is the native ERC-20 token of Worldcoin, initially launched on the Ethereum (ETH) blockchain. However, before its official launch in July 2023, Worldcoin migrated its protocol (including WLD) to its own blockchain. WLD was created primarily to incentivize the adoption and usage of the network.
During the beta phase before the official launch, WLD was massively distributed to the first users who registered and scanned their irises as an incentive for early adoption of the project.
The total supply of WLD is limited to 10 billion tokens, which will be gradually distributed over a 15-year period. As of August 2023, around 143 million WLD tokens are in circulation.
Users can obtain free WLD rewards by registering on the World App and scanning their eyes to generate a World ID. WLD tokens can also be purchased on cryptocurrency exchanges like Binance, KuCoin, and Huobi. However, as of August 2023, WLD is not yet available for purchase in the United States.
Potential Use Cases of Worldcoin
As mentioned above, Worldcoin aims to increase global equal opportunities through a decentralized financial infrastructure and digital identity. This will enable instant and secure worldwide transactions, connecting people economically on the internet.
Furthermore, it provides a solution to demonstrate authenticity online, protecting users from AI bots, and enhancing democratic governance. It also advocates for equitable resource distribution through identity verification, benefiting developing economies and facilitating the implementation of universal basic income, as proposed by its co-founder Sam Altman.
Using World ID could be used to build a truly democratic voting system. Besides, it could enhance the use of social media networks and mitigate the abuse problems on platforms.
Criticism of Worldcoin
Worldcoin has faced criticism regarding how it collects and manages users’ biometric data.
Privacy advocates like Vitalik Buterin and Edward Snowden have publicly expressed their scepticism about the concept of scanning human eyes as a requirement to receive cryptocurrencies. Other experts have questioned whether Worldcoin offers enough real utility beyond speculation with its WLD token.
A 2022 MIT investigation raised doubts about Worldcoin’s marketing practices in developing countries during the beta tests, alleging a lack of adequate informed consent. Worldcoin has firmly denied these accusations on its website.
In addition, multiple governments have initiated investigations into Worldcoin due to privacy concerns:
- Germany: The federal data protection agency has been investigating Worldcoin since late 2022 for “large-scale processing of sensitive biometric data”.
- France: On July 28, 2023, the privacy regulatory authority CNIL stated that the legality of Worldcoin’s collection of biometric data seems “questionable”.
- United Kingdom: The ICO data protection agency is investigating the project for potential violations of user security.
- Kenya: On August 2, 2023, the Kenyan Ministry of Interior suspended local activities of the project while government agencies assess potential risks it may pose to public security.
Worldcoin claims that biometric data is promptly deleted after generating digital IDs and that advanced cryptographic techniques are used to preserve privacy. However, these explanations have not completely convinced critics and regulators.
The Future of Worldcoin
The success of Worldcoin largely depends on whether the project can overcome regulatory obstacles, address all privacy concerns, and develop real-world use cases beyond WLD rewards for users who register on the World App.
With 2 million registrations in 20 countries as of August 2023, the project has shown it could surpass the expectations of the crypto industry, especially if it achieves the massive adoption they promote on social networks.
Everything You Need to Know About Worldcoin: World ID for Every Human
