Worldcoin: New Trend on the Scale of the Crypto Field
Fabricated virtual profiles and scams are not a novel concept. It has resulted in negative consequences, as these identities contribute to the dissemination of conspiracy theories, misleading conversations, and various societal problems. Sam Altman, co-founder and CEO of OpenAI, the parent company of ChatGPT, is well aware of these issues. With his extensive insight into emerging trends, he has a better understanding of what lies ahead. In this article, let's explore the possibilities of Worldcoin and its positive and negative impact on humans.
Sam Altman - The Birth of Worldcoin Idea
In 2019, while departing from Y Combinator to take on the role of OpenAI's CEO, Sam Altman commenced interviews to assemble a new project he had envisioned. The initial founder to join his team was Max Novendstern, a former investment associate at Bridgewater Associates who had prior experience at a money transfer startup named Wave. The second founder Altman enlisted was Alex Blania, who had been studying theoretical physics at the California Institute of Technology and the Max Planck Society.
Introducing the idea to investors, they were enthusiastic about collaborating with Altman and eagerly provided funding for his envisioned project. Companies like Andreessen Horowitz, Variant, Khosla Ventures, Coinbase, and Tiger Global collectively contributed $125.5 million to support Worldcoin. However, the public was more cautious. In June 2021, when Bloomberg reported that Altman was working on Worldcoin, many expressed doubts about its proposition to grant one share of its new digital currency to individuals who consented to an iris scan.
On July 24, 2023, Worldcoin, which has raised $250 million altogether, was launched to the public.
Worldcoin is promising, but no ideal
Over three years ago, Altman came up with the idea for a new company aimed at establishing proof of personhood as its primary objective. Worldcoin embarked on a three-part mission: to develop a global identification system, create a global currency, and build an app that facilitates payments, purchases, and transfers using its proprietary token, as well as other digital assets and traditional currencies. The scope of the mission is both ambitious and technically intricate, but the potential it holds is vast. Even though the project is not as brilliant as it looks.
First of all, for over three years, Worldcoin has been in development and has been discreetly enlisting individuals from various countries, including India, offering them 25 Worldcoin tokens upon onboarding. However, the journey hasn't been without challenges. The project faced criticism for alleged exploitative practices, particularly in impoverished nations. Despite the obstacles, between May 2021 and July 2023, over 2 million individuals verified their World IDs at an Orb across more than 30 different countries, as reported by the startup.
Second of all, despite regulatory restrictions preventing U.S. citizens from accessing the Worldcoin token, the startup has not been deterred from promoting appointments for eye scanning in prominent American cities such as Miami, New York City, and San Francisco.
Third of all, currently, the Worldcoin orbs are present in various locations, ranging from universities in Kenya to shopping malls in Lisbon, as mentioned by Alex Blanca. These orbs can capture a high-definition iris scan in just 60 seconds. However, the adoption of this technology is still limited and has not reached its desired level. Indeed, why?
To address this issue, Worldcoin has devised plans to incentivize users to undergo iris scans. For instance, in places like Lisbon, where less than 5% of residents have had their irises scanned, users may be offered incentives such as coupons, access to specific loans, or even access to single-player games. These rewards aim to encourage more users to participate in the iris scanning process.
Lastly, the launch of Worldcoin on the stock exchanges caused an unprecedented volume of trading for a new coin. The token's trading volume reached over $145 billion on its first day of trading, as reported by CoinMarketCap, causing its price to surge from $1.70 to an intra-day peak of $3.48. Such hype has led to comments on some legends of the crypto world, which happens rarely nowadays, one of them is Vitalik Buterin. In his blog, stated that "I definitely do not envy the people attempting the task (the act of scanning iris), and it will likely take years to find a formula that works,". Vitalik also mentioned 4 key problems: privacy, accessibility, government banning and safety.
The lightning strikes twice or what problems Worldcoin faces?
Worldcoin, Sam Altman's initiative aimed at monopolizing the verification of human identity. However, it has already drawn the attention of European data protection authorities.
The U.K.'s ICO is investigating Worldcoin's U.K. launch and stressed the need for a Data Protection Impact Assessment (DPIA) for sensitive biometric data. France's CNIL is concerned about Worldcoin's legality and is actively investigating. The investigation was passed to Bavarian DPA, the lead data supervisor for EU operations. Kenya, an initial launch country, shows high adoption rates, but a potential ban is looming. Seems like Sam Altman stepped on the rake again, as it was with the Chat GPT ban in Italy. And it is not going to be easy at all.
If Worldcoin achieves its goals, it could amass one of the most extensive databases of human biometrics. However, this accumulation comes with security risks if the information is not adequately protected. The data could potentially be utilized to verify the authenticity of individuals online and on the blockchain, which is a challenging problem to address.
On the flip side, if the startup fails to gain widespread adoption, it could result in substantial financial losses for investors. Moreover, individuals who signed up may be exposed to the risk of their personal information being sold to other parties, which has reportedly already been occurring.