Worldcoin: Everything to Know

By  Beluga Research August 9, 2023

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Summary

  • Worldcoin aims to use crypto to establish universal access to the global economy regardless of country or background
  • It was co-founded by OpenAI CEO Sam Altman and launched in July 2023, as a project aimed at creating a global financial and identity network
  • Worldcoin is built around three core components: World ID, a privacy-preserving digital identity system) Worldcoin a token awarded to uses and the World App mobile wallet
  • Worldcoin offers reward tokens to new users after obtaining their digital ID from their iris (iris hash) using the worldcoin orb iris scanner

Overview

Worldcoin aims to use crypto to establish universal access to the global economy regardless of country or background. It uses an innovative iris-scanning biometric imaging device called The Orb to scan users' iris patterns in their eyes and create a World ID identification code called an "IrisCode." Iris patterns are unique to each person, much like fingerprints. This World ID is a digital identity system running on the Ethereum blockchain that validates you as a unique human individual while preserving your privacy. World ID verification then serves as a passport for accessing online services, allowing you to sign into various platforms without sharing other personal data.

A Brief History

Sam Altman is the Chief Executive Officer of OpenAI. He co-founded Worldcoin with Max Novendstern and Alex Blania in 2019. The project was financially backed by Andreessen Horowitz, a prominent venture capital firm.

The company raised its first $25 million in October 2021. Within six months, they raised a further $100 million. The raised funds increased the company's overall token value to $3 billion, although only 10% of the total tokens have been released.

In 2022, MIT Tech Review published an article pointing out Worldcoin's questionable business methods in low-income nations, basically accusing them of bribery - your personal biometric information for "free" money in the form of WLD tokens. Among other things, the report said that Worldcoin exploits people with low incomes in order to expand its network.

In May 2023, the company added $115 million for bot detection, research and development. The funds are intended to continue to grow the Worldcoin project, its application and reach.

In 2023, according to a TechCrunch post, hackers accessed the personal devices of many Worldcoin Orb operators and obtained login details and passwords of these Worldcoin operators. However, Worldcoin claimed that the hack did not affect any personal user data and that the operator app could not even access user data.

What is Worldcoin?

Worldcoin is a revolutionary blend of AI, biometrics, and blockchain technology with a mission to address critical global challenges of identity verification and financial inclusivity. It operates as an open-source protocol designed to grant universal access to the global economy, with a decentralized approach that intends to empower its community of users to make decisions and oversee the system.

To achieve its vision, Worldcoin is developing a set of interconnected tools::

  • World ID - a privacy-preserving digital identity designed to help solve many important, identity-based challenges including proving an individual's unique personhood, from a one time iris scan and assignment of an unique World ID
  • Worldcoin Token - the first token to be globally and freely distributed to people, for both utility and future governance, just for being a unique individual
  • World App - a fully self custodial app that enables payment, purchases and transfers globally using the Worldcoin token, digital assets, stablecoins and traditional currencies

Worldcoin's World ID, with its unique digital identity, plays a crucial role in proving humanness in an increasingly AI-populated online world. It combats bots and fake virtual identities by offering trustworthy online human authentication through the Orb iris scan, proof of personhood and unique World ID assignment.

Getting Started

  • Download the World App. Downloading the World App allows a person to set up their Worldcoin account and access a digital wallet connected to Worldcoin, Bitcoin, Ethereum and other digital and traditional currencies including stablecoins. World App is operated by Tools for Humanity, a contributor to the Worldcoin system.
  • Sign up for World ID . It's possible to use the World App without signing up for World ID. In order to receive a free share of Worldcoin Tokens and other digital currencies, however, a person must sign up for World ID by visiting a Worldcoin Operator in person and verify their unique personhood at an Orb. This process may evolve in the future to include other verification signals.The Orb uses iris biometrics to establish an individual's unique personhood, then creates a digital World ID that can be used pseudonymously in a wide variety of everyday applications without revealing the user's identity.
  • Receive your free share of Worldcoin and other digital currencies . Once an individual has verified their unique personhood, they can use their World ID within the World App to learn about digital currencies and claim their air drop of free Worldcoin Tokens.

Unique Aspects

Cutting-edge high-resolution iris scanning technology is at the core of this audacious Worldcoin project, confirming the distinct human identity of registrants while eliminating bots and repeat registrations.

To participate, individuals physically visit approved locations encountering the impressive Orb—a silver, soccer-ball-sized image-scanning sphere with a high-resolution camera and a unique algorithm. The Orb accurately records and analyzes iris patterns under various lighting conditions, remaining unaffected by aging or physical changes, which the company argues makes it a trustworthy choice for robust identity verification.

Worldcoin's scanners generate cryptographic hashes for anonymous information transmission. The Worldcoin network employs cutting-edge zero-knowledge proofs to assess uniqueness. If unique, users receive a secure World ID proof-of-personhood (PoP) credential on a decentralized blockchain, enabling access to financial services and online activities.

Worldcoin stands out with its one-time iris identification and permanent recognition of each unique human, eliminating the need for constant rescanning or creating new IDs, like with repeated fingerprint logins and face recognition requirements. This seamless approach revolutionizes digital platform interactions while ensuring secure, hassle-free identity verification.

Also distinctive to Worldcoin is the intention to create a global initiative towards UBI (Universal Basic Income). The goal is simple and modest: to create a system that will, eventually, freely distribute tokens to all eight billion people on the planet, as a form of universal basic income.

Advantages

  • Potential innovative solutions: If Worldcoin is ultimately successful it solves the challenge of confirming online digital identity and creates a cryptocurrency to be distributed as a form of "universal basic income" (UBI).
  • Versatility. There are various methods to use Worldcoin's cryptocurrency. Online purchases, trading on crypto exchanges, and other features. Users can also purchase Worldcoins even before they receive an iris scan and their unique World ID.
  • Very high security. Worldcoin offers customers a safe and trusted platform for making online payments by using the well established Ethereum platform. The system uses its creative encryption technology to protect transactions. In addition, the network of Worldcoin miners regularly scans the blockchain to spot and stop any shady activity.
  • Quick transactions. Worldcoin is built to perform transactions quickly and easily. This feature makes it perfect for anyone who needs to move money rapidly, such as business owners who want to accept client payments instantly.
  • Cheap transaction fees . Worldcoin's cheap transaction fee is one of its major benefits. This feature makes it a great choice for investors seeking an easy means of making payments and transfers online. This can greatly benefit people making large purchases as well.

Disadvantages

  • Unclear Worldcoin value proposition: it's uncertain how the Worldcoin token can be expected to have any value for recipients once it circulates. It is extremely difficult to imagine how what amounts to an Ethereum-based meme coin with no apparent tokenomic model is going to be exchangeable for essentials like food and shelter over the long term.
  • Questionable practices: MIT Technology review and others' grave concerns about alleged deception, preying on low economic populations with deceptive marketing practices, collecting more personal data than it acknowledged and failing to obtain meaningful informed consent. Also claims that Worldcoin's fundamental model is already incentivizing privacy harms.
  • World ID trust: users are putting their trust in a third party in the handling of their private biometric information.
  • Little or no adoption . Many retailers and other enterprises have not accepted Worldcoin. This lack of adoption means that the number of locations where users can spend their money is limited, making it hard to use the currency for normal transactions. Also, because Worldcoin has not gained much traction, its value may fluctuate more than other cryptocurrencies.
  • Absence of regulations . Worldcoin (being a cryptocurrency) as with other cryptocurrencies is not subject to consistent regulation by any institution of higher power. Users are, therefore, not protected from fraud or other dangers related to cryptocurrency investments.
  • Limited customer help . Because Worldcoin is still young, there is not much in the way of customer help. This issue implies that users may have problems or trouble if they need help in knowing how the system works or solving any technical problems they may experience.
  • Volatility . Like most crypto, Worldcoin's value fluctuates a lot. As a result, the investment value is subject to major short-term fluctuations. Due to this volatility, it may be difficult for investors to know exactly when and how much to invest to get the highest returns.