KEYTAKEAWAYS
- Worldcoin uses iris recognition to build the largest identity and financial network.
- Delayed token launch and intense pressure on operators are major challenges.
- Privacy concerns arise from biometric data collection and potential regulatory issues.
CONTENT
Worldcoin (WLD) aims to create a global identity and financial network using biometric data. However, it faces regulatory, privacy, and operational challenges. Learn more about its journey and controversies.
WHAT IS WORLDCOIN (WLD)?
Worldcoin is a cryptocurrency project founded by OpenAI CEO Sam Altman in 2020. Worldcoin is essentially an “underlying identity protocol” that uses biometric data from users’ iris scans to verify identities. Users who successfully complete the iris scan receive a Worldcoin token airdrop. This project aims to provide the infrastructure for a future where AI technology is increasingly powerful, helping people differentiate between “humans” and “AI robots” online.
Worldcoin‘s vision is to build the world’s largest and most equitable digital identity and currency system by scanning the irises of everyone on the planet to verify identities. So far, millions of people have had their irises scanned. According to Worldcoin‘s official website, its mission is as follows:
Worldcoin is building the world’s largest identity and financial network for all. We aim to make this project a public utility for humanity, distributing ownership to everyone. Regardless of nationality or background, we strive to allow everyone to benefit from global economic growth and help society transition to a more diverse, inclusive, and prosperous future economy.
Worldcoin has been around for over two years, but until this year, many people had not heard of the project. So, what caused Worldcoin to suddenly become popular?
The answer is clear: the recent hype around the AI chatbot ChatGPT.
In November 2022, ChatGPT, developed by OpenAI, was launched, sparking an AI frenzy. A massive influx of users flocked to ChatGPT, making it the fastest-growing consumer application in history and elevating OpenAI, the developer behind it, to unicorn status, with a valuation exceeding $20 billion.
Following the success of ChatGPT and OpenAI, OpenAI CEO Sam Altman became a media darling, much like Tesla founder Elon Musk. Consequently, the cryptocurrency startup project he founded, Worldcoin, also garnered public attention.
- Worldcoin Launches Native Token “WLD”
In addition to the Worldcoin project, Worldcoin has launched its native cryptocurrency, WLD, distributing it to over 2 million people worldwide, most of whom are from countries in the southern hemisphere. This token began trading on Binance, the world’s largest cryptocurrency exchange, on July 24.
Worldcoin (WLD) is an ERC-20 token on the Ethereum mainnet. Individuals can receive their user grants on the Optimism mainnet. Therefore, most WLD transactions are likely to occur on the Optimism network. If needed, the tokens can be bridged back to Ethereum through Optimism.
>>> More to Read : Optimism (OP): Ethereum’s Layer-2 Scaling Solution
HOW DOES WORLDCOIN OPERATE?
- Worldcoin Operators
Worldcoin recruits legally registered local businesses as operators. Services are not provided to residents of countries with legal restrictions, ensuring compliance due to the sensitivity of collecting biometric data. Iris recognition is chosen for its uniqueness, fraud prevention, and better performance over facial recognition and DNA testing. Operators undergo a review and training process and are given an Orb device to educate and scan local users. They earn token rewards for each registration.
- Worldcoin and Ethereum
Worldcoin is tightly integrated with the Ethereum ecosystem, using Ethereum’s optimistic rollup for scalability and maintaining account anonymity and transaction transparency. The SDK supports cross-chain interactions with the Ethereum mainnet, other Layer 2 solutions like Optimism and Arbitrum, and non-EVM compatible chains such as Solana and Polkadot. Worldcoin tokens are issued as ERC-20 tokens on Ethereum, preparing for a significant user base increase.
- The Team Behind Worldcoin
Worldcoin is backed by the Worldcoin Foundation, a non-profit supporting the community, and Tools for Humanity, a tech company focused on developing Worldcoin and promoting a fairer economic system.
>>> More to Read : What Is Ethereum?
WORLDCOIN SCANNER : ORB
The most notable aspect of the Worldcoin project is the Orb, an iris scanner.
- Purpose of the Orb
Before diving into the Orb, it’s essential to understand its purpose. Worldcoin has three primary missions: creating a global identity ID, a global currency, and a wallet to hold both the ID and currency. These missions correspond to three components: World ID, Worldcoin, and World App.
- World ID: A digital identity system that verifies a person as a real human while protecting privacy.
- Worldcoin: The first cryptocurrency distributed for free to all humans, usable for future transactions or governance voting.
- World App: A wallet for Worldcoin that supports global payments, purchases, and transfers, including conversion between Worldcoin, fiat, and other cryptocurrencies.
Worldcoin set an ambitious goal in 2021 to achieve one billion users by 2023.
- Solving the Challenge of Fair Distribution
In the crypto world, people can create numerous accounts, often using disposable accounts to exploit token distributions. Worldcoin aims to ensure that the benefits of technological and economic progress are shared fairly among all individuals without requiring KYC (identity verification).
To address this challenge, Worldcoin developed the Orb.
- Functionality of the Orb
The Orb is a spherical hardware device that scans users’ irises. The scan data is cryptographically encrypted and converted into a unique digital code (IrisHash). This code verifies whether a user has already registered for a Worldcoin wallet and identity. The use of iris scanning, which is difficult to replicate or forge, ensures the uniqueness and authenticity of each individual.
Just interacted with the orb of @worldcoin at @toaberlin – really easy experience that can democratize user identification and then offer benefits both IRL and in virtual worlds and Metaverse platform like The Sandbox – can’t wait to see how it will be used even more 👍 pic.twitter.com/HHBHikmhLB
— Sebastien 🏞 (@borgetsebastien) June 5, 2024
WORLDCOIN (WLD) CONTROVERSY
- Worldcoin’s Delayed Token Launch
Worldcoin recruited operators globally, targeting developing countries with low incomes. From the second half of 2021, teams used Orb devices to scan irises on the streets, offering small gifts and token vouchers promising future redemption. However, the token has not yet launched (announced for 2023), raising doubts about the vouchers’ legitimacy. Some accuse Worldcoin of exploiting the poor’s biometric data for profit.
- Operators Under Immense Pressure, Some Resort to Strikes
Operators face significant pressure and backlash. They are third-party partners compensated by the number of registrations. With only 30 initial Orb devices, failing to register 500 users in two weeks results in losing the device and qualification. Constant changes in reward structure and logistical issues add to the strain, leading some operators to strike.
- Concerns About Orb’s Data Collection Methods
Worldcoin claims not to store original iris images, but it has built an iris database for users who did not opt-out to optimize algorithms. Promises to delete data after optimization lack specific timelines, causing privacy advocates’ concerns. They warn of potential backdoors and misuse of biometric data. Additionally, uploading encrypted data to a borderless blockchain may violate privacy laws in many countries.
FAQ
- What is Worldcoin (WLD)?
Worldcoin (WLD) is a pioneering project aimed at creating the world’s largest identity and financial network. At its core is World ID, a global identity network that protects privacy.
- What is Worldcoin (WLD) Risks and Challenges ?
(1) Regulatory Hurdles: Facing regulatory compliance challenges, especially in the United States.
(2) Data Privacy Concerns: The use of biometric data raises privacy issues.
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