Worldcoin – the initiator of a global economy or a threat to privacy?

The traditional financial system has been the main facilitator of financial services and products for centuries now. However, its shortcomings and limitations have long been known and discussed. We’re dealing with high fees and commissions, limited access to financial services leading to a high number of unbanked and underbanked individuals, slow processing times due to regulatory constraints, bureaucratic barriers to entry, insufficient innovation, the concentration of power in the hands of a few central entities which perpetuates financial inequalities, and so on.

Given the high degree of complexity implied, finding effective solutions to address all these issues has proven to be mission impossible so far. The salvation might come from the digital front, more precisely from the decentralized finance (DeFi) space, where Worldcoin, a relatively new and highly promising blockchain-based project, is making waves, promising to become a real game-changer.

The world envisioned by Worldcoin is one where people from all parts of the globe can enjoy fair financial opportunities and participate in a unified economy enabled by an innovative combination of blockchain and biometric technologies and the universal distribution of its native crypto, WLD. Although the project is still in its early days, the promise it brings has already pushed the Worldcoin price up in the crypto charts, offering us a glimpse into what the venture might be able to achieve in the future. At the same time, Worldcoin has also sparked some heated debates centered around privacy concerns.

Revolutionizing Digital Identities

Worldcoin is the brainchild of a company called Tools for Humanity (TFH), founded by Sam Altman, the CEO of the world-renowned artificial intelligence research company OpenAI, Max Novendstern, and Alex Blania in 2019.

With cyber threats becoming ubiquitous and increasingly sophisticated, there’s a growing need for accurate and reliable identity verification solutions, and Worldcoin emerges as a pioneering initiative in this respect. Its creators developed a blockchain-based open-source protocol that leverages biometric data to create foolproof digital identities that can help differentiate humans from bots and AI instances, which hackers and malicious entities often use to run scams and other fraudulent activities.

It all starts with a simple scan of the face and eyes taken by a sphere-shaped metal device known as an orb. These gadgets can be found in Orb centers in 35 locations across the world, where those who are interested can book an appointment and have their eyeballs scanned. The unique structure of each person’s iris is captured by these custom-made imaging devices to ensure the user is human and not a bot. The recorded biometrics get converted into a one-of-a-kind iris code that assigns a World ID to every user, after which they get deleted. The World ID serves as a digital passport that provides proof of humanness, and if it becomes mainstream, it can be used to authenticate online across different websites and platforms.

As iris scans contain more data than other biometric features, they’re much more difficult to counterfeit or duplicate, offering a more secure method of identification and reducing the risk of fraud significantly. According to their statistics, over 6.9 million people from all over the world have agreed to have their irises scanned by Worldcoin’s orbs, and the company has plans to expand its Orb centers in more locations to speed up the process and get as many users on board as possible.

Paving the Path to a Decentralized Global Economy

While the creation of an advanced biometric-enabled identity verification method is a pretty bold and impressive endeavor by itself, for Worldcoin, it was just a means to an end, as their ultimate goal was to facilitate the free allocation of a universal digital currency to every human on the planet.

For that, they required a reliable way to determine the uniqueness and personhood of each individual that signs up on their platform, which then enabled them to provide human applicants with a certain amount of the platforms’ native crypto, WLD. Therefore, apart from generating digital IDs, iris scans aid in the distribution of a crypto token that can be earned by anyone for simply being human.

Unlike other digital currencies, WLD doesn’t require an initial investment as the main purpose is to encourage the wider adoption of the crypto to improve economic opportunities while also offering protection from the threats posed by AI technology.

The project has not yet been launched in the US due to unclear regulations around the use of digital currencies. However, Altman hopes that in the future, regulatory challenges will be addressed and that the WLD token could one day become a digital form of universal basic income (UBI), promoting widespread financial access and ensuring equitable participation in digital economies for everyone. If Altman’s vision becomes reality, Worldcoin may be able to reduce financial barriers through the delivery of a universal digital currency that supports financial inclusion.

Controversies Over Privacy Risks

Although Worldcoin’s intentions are noble and the process of obtaining a World ID and the associated WLD tokens seems simple and, most importantly, safe, the project has faced backlash due to privacy concerns. The company claims that all the images captured by the orbs are deleted after serving their conde-generating purpose unless the applicant specifically requests otherwise. They also state that no additional data is collected, and all the information on the platform is securely encrypted.

Despite these reassurances, the possibility of iris scans ending up on the black market and providing unauthorized access to users’ Worldcoin accounts represents a serious problem that cannot be ignored. Several countries have banned or suspended the project temporarily, while others are scrutinizing their procedures to ensure they don’t go against local privacy laws.

Therefore, although Worldcoin’s objective of creating a fairer economy that levels the playing field for participants is promising and exciting, there are many hurdles that developers need to overcome to bring their vision to fruition.