- Worldcoin was supposed to be a secret until its launch, but the cover was blown when the project raised over US$25 million in June 2021.
- The creators believe that AI will lead to a massive accumulation of wealth that can only be mitigated through UBI
- The moment you send or receive crypto to and from the World app using an exchange you have completed KYC on, it becomes very easy for Worldcoin to identify your details
Worldcoin has surpassed over 2.1 million sign-ups around the world, 10 days after its launch. The project is riding on the creation of a decentralized digital ID in exchange for cryptocurrency. There has been a mammoth of concerns and opinions about Worldcoin. Additionally, speculation around whether WLD is the next big thing, or another pump and dump is so high, attracting the attention of several governments across the globe.
This article looks at the origin of Worldcoin, how it works, the dangers around it, and whether it is risky to invest in the possibilities that the project promises.
The first time Worldcoin went viral
The creators of the project started working on it in late 2019. However, Worldcoin captured global attention in October 2021. At that time, the key agenda around the innovation was the creation of universal basic income using a device called the Orb. Sam Altman’s involvement in the project was the reason why the project attracted so much attention. At that time Sam was cruising on the success of his innovation, Y combinator, a project that housed over 3, 000 companies at that time.
Worldcoin was supposed to be a secret until its launch, but the cover was blown when the project raised over US$25 million in June 2021. It has since raised an additional US$215 million from crypto Venture Capitals.
How Worldcoin came to be
Worldcoin was founded by Sam Altman, Max Novenstern, and Alex Blania. Sam came up with the idea of the project in 2019. He brought Max, a philosopher, and Alex, a physicist to help him bring the project to realization. They went ahead to incorporate an American software company, Tools for Humanity, and the baby was born. However, the official website notes Sam and Alex as co-founders, as Max stepped away from the project in January 2021.
The project intends to monitor and slow down the effects of AI innovations. The creators believe that AI will lead to a massive accumulation of wealth that can only be mitigated through UBI. However, the success of UBI requires a global digital ID to differentiate between humans and human-like AI.
In March this year, Worldcoin revealed its digital ID dubbed World ID along with a software developer kit to leverage it. They further launched a crypto wallet called the world app. The crypto coin, WLD, was their last piece to the puzzle ahead of the launch on July 24.
Read: What is crypto tokenomics: An evaluation guide to crypto investors
How does Worldcoin work
The process begins with the Orb, the device used by Worldcoin to scan the eye and generate a World ID. Alex Blania stated that the device is secure and they used over US$50 million to create the high technology. There are 360 Orbs across the World but the company gives no information on how they work.
The orb operators were handpicked by Worldcoin through an application process on their website. These operators are paid handsomely per person scanned, giving them an incentive to scan as many eyes as possible.
Worldcoin is focused on scanning the iris because it is unique to every human and almost impossible to fake or duplicate.
Is the Iris scanning a big threat to security and privacy
For the most part, the Iris scan is the major take point home why most people perceive the Worldcoin project as suspicious.
However, on a previous Worldcoin website, they had explained how the Iris scan works
Looking into the Orb
According to the website, biometric data does not stay in the Orb. Instead, it is first processed locally on the Orb and then permanently deleted, leaving behind the iris code only. This iris code is a set of numbers that the Orb generates and is not linked to your wallet or any of your personal information. The scan does not give out personal information. All it does is stop you from being able to sign up again.
Since users do not need to provide personal information like name, email address, physical address, or phone number, they can easily sign up without Worldcoin ever knowing anything about them.
The downside, however, is that it is not yet possible to verify whether data is permanently deleted once local processing is complete.
The connection between the Iris scan and the World app
Before scanning the Iris, users must have the World app. The app is used to create and scan the QR code which the orb associates with users’ Iris. This information is then uploaded as a hash to Ethereum’s Optimism.
The fact that the World ID is connected to the user’s wallet address on the World app threatens privacy. In context, the moment you send or receive crypto to and from the World app using an exchange you have completed KYC on, it becomes very easy for Worldcoin to identify your details.
WLD Tokenomics
The tokenomics behind the Worldcoin token have been difficult to find. The tokenomics section of the white paper is blocked in many countries. Some of the information gathered includes:
WLD is an ERC20 token on both Ethereum and Optimism. It has an initial supply of 10 billion. The creators expect the tokens to be distributed as one WLD per person. The remaining 2.5 million tokens are set apart for Worldcoin management and early investors.
However, tokenomics note that this supply could change in the future. Currently, there are only about 100 million WLD tokens in circulation, which means a lot is yet to happen in the space.
Worldcoin Risks
The website has also highlighted some of the risks associated with the project. They reveal the conditions under which the project could fail. Firstly, Worldcoin warns that because the project aims to be decentralized, success may not be a guarantee.
Secondly, the project warns that it will fail if it can’t sell enough WLD tokens to fund ecosystem development. Thirdly, Worldcoin warns that the project will fail if it does not get enough adoption. Furthermore, Wordcoin warns that regulations could kill the project, for example, through a determination that the verification mechanism is unlawful under data protection regulations.
Worldcoin warns that crypto regulations could also kill the project, and a failure of hardware (the orb) is a death sentence to the project.
Web3Africa will keep track of the developments of the Worldcoin ecosystem to keep you up to date our avid readers!
