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What is Worldcoin?

What is Worldcoin?

More than three years ago, the founders of Worldcoin & Sam Altman set out on a journey with the ambitious goal of creating a new identity and financial network accessible to everyone. Today marks the commencement of the project’s rollout. If successful, the team firmly believes that Worldcoin could bring about transformative changes, significantly increasing economic opportunity for individuals. Moreover, it aims to offer a reliable solution for distinguishing between humans and AI online, all while ensuring data privacy. The founders envision Worldcoin playing a crucial role in enabling global democratic processes and even presenting a potential pathway to a future where Universal Basic Income is funded by AI.

How It All Started 

In early 2020, Blania collaborated with Worldcoin co-founders Sam Altman, OpenAI’s founder and the former president of the renowned Silicon Valley incubator Y Combinator, and Max Novendstern, who had previously worked at the financial-technology company Wave. Their underlying question was a straightforward one, as Blania explains: What if every person on the planet received an equal share of a new cryptocurrency?

Their hypothesis revolved around the network effects that could potentially make this coin more practical and efficient compared to previous cryptocurrencies. They believed that the more people who held the cryptocurrency, the smoother the process of sending and receiving payments would become. Moreover, they saw the opportunity to extend financial inclusion to millions worldwide who lack access to traditional banking systems. As a result, if the value of the coins were to increase over time, similar to Bitcoin and Ethereum, it could have the potential to redistribute global wealth.

However, the founders’ ambitions reached even further. They envisioned Worldcoin as a global distribution network for Universal Basic Income (UBI), a progressive approach to social welfare where every citizen receives regular cash payments to meet their basic needs. UBI has gained popularity in Silicon Valley as a potential solution to counter the job-disrupting impact of automation. This concept has been tested in various locations, including California, Finland, and Kenya. Altman expressed to Wired that, in the future, the Worldcoin cryptocurrency could be utilised to fairly distribute the substantial profits generated by advanced artificial intelligence systems, which aligns with their vision for the project.

Use Cases and Concerns Around Worldcoin

According to Worldcoin CEO Alex Blania, the company’s technology has the potential to address a complex challenge on the internet—preventing fake identities from distorting online activities while safeguarding people’s privacy. The technology’s applications extend to combating fake profiles on social media, exploring the distribution of a global universal basic income (UBI), and empowering new avenues for digital democracy.

Despite its innovative approach centred around biometrics, Worldcoin is encountering significant resistance. Concerns surrounding privacy, security, and transparency have arisen due to the nature of the technology and uncertainties about its future use. Doubts also linger about the company’s ability to achieve its ambitious objectives.

Up to this point, Worldcoin has managed to onboard more than 700,000 users across 25 countries, including Chile, France, and Kenya. The project is set for a full-scale launch in 2023, with hopes of rapid user base expansion. As this critical year unfolds, many will closely observe Worldcoin’s progress. It remains to be seen whether the company can successfully redefine digital identity or face a fate similar to several hyped cryptocurrencies that have faltered in the past.

Worldcoin’s Founders Pave the Way for Global Universal Basic Income Distribution

In order to achieve a fair and equitable distribution of coins, Worldcoin faced the challenge of devising a sign-up process that ensured each person could register only once. To protect user privacy and avoid the risks associated with linking the cryptocurrency to government IDs, the team opted for a biometric iris scan approach, capable of scaling to billions of users. Acknowledging the sensitivity of biometric data, the team prioritised privacy and devised a protocol called Proof-of-Personhood (PoP), a sophisticated blend of custom hardware, machine learning, cryptography, and blockchain technology. This protocol enables the assignment of a unique digital identity to each individual while maintaining complete anonymity.

Central to this approach is the “Orb,” a device equipped with a custom optical system to capture high-definition iris scans. To sign up for Worldcoin, users download the company’s app on their smartphones, generating a pair of cryptographic keys—a public key for sharing and a private key kept hidden on the user’s device. The Orb reads a QR code generated from the public key before scanning the user’s irises. Worldcoin has made significant efforts to make Orbs resistant to fraudulent sign-ups using altered or fake iris data.

The iris scan is transformed into a hash—a series of numbers—using a one-way function, rendering it nearly impossible to recreate the original image even if the hash is compromised. The Orb sends the iris hash and the user’s public key hash to Worldcoin’s servers in a signed message. The system checks whether the iris hash is already present in the database; if not, it adds the user to the list. The public-key hash is then added to the company’s blockchain registry.

To claim the user’s free Worldcoins, a cryptographic technique called a zero-knowledge proof (ZKP) comes into play. This ZKP enables the user to prove knowledge of a secret (the private key) without revealing it. The app’s wallet uses an open-source protocol to generate a ZKP, demonstrating that the holder’s private key is linked to a public-key hash on the blockchain without revealing which one. As a result, Worldcoin remains unaware of the specific public key associated with each wallet address. Once the linkage is verified by the company’s servers, the tokens are sent to the user’s wallet. The ZKP also includes a unique set of numbers, known as a nullifier, which indicates whether the user has attempted to claim their coins before, without disclosing their identity.

Concluding 

Moreover, Microsoft’s Weyl points out that Worldcoin’s reliance on the “creepy all-seeing eye” of the Orb could lead to problematic associations. According to Weyl, projects like Worldcoin may evoke a sense of a dystopian future rather than one that is hopeful and inclusive.

Ultimately, the accomplishment of Worldcoin’s ambitious goals in 2023 may hinge on the narrative it presents. The company advocates for financial inclusion and wealth distribution, while critics raise valid concerns about privacy and transparency. The world’s response to Worldcoin’s vision and approach remains uncertain, and whether it will be embraced on a global scale is yet to be seen.