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Lesson 33: What is Worldcoin
Lesson Intro:
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33. What is Worldcoin
TL;DR
- Co-founded by OpenAI CEO Sam Altman, Worldcoin aims to build a decentralized proof-of-personhood solution.
- Proof-of-personhood is based on the idea that because AI is going to create an abundance of creations but also high volumes of spam, the need to prove that someone is a unique real person becomes increasingly critical.
- Worldcoin’s native cryptocurrency, Worldcoin (WLD), was officially launched on July 24, 2023.
- Users visit a special hardware called the Orb to have their iris scanned to be verified as a unique real human by Worldcoin. Users are then eligible to receive the WLD token.
- While Worldcoin’s vision excites many people, others are more concerned about the potential risks of its operations.
Who Founded Worldcoin?
The original idea of Worldcoin came from co-founders Sam Altman and Alex Blania. Sam Altman is the most high-profile co-founder and is also the current CEO of OpenAI, the artificial intelligence research lab that launched ChatGPT at the end of 2022. Altman was previously the president of Y Combinator and was briefly the CEO of Reddit. Blania was formerly an AI researcher.
Worldcoin has raised venture funding worth over $100 million from investors including Andreessen Horowitz and Khosla Ventures in multiple financings starting from 2021. Worldcoin’s native cryptocurrency, Worldcoin (WLD), was officially launched on July 24, 2023.
What Is Worldcoin?
As a cryptocurrency that was created based on the co-founders’ AI experiences, Worldcoin’s objective has a strong focus on AI. Self-described as a digital identity protocol aiming to support humanity in the age of AI, Worldcoin aims to build a decentralized proof-of-personhood solution.
Proof-of-personhood is based on the idea that because AI is going to create an abundance of creations but also high volumes of spam, the need to prove that someone is a unique real person — instead of a bot or another real person — becomes increasingly critical.
Worldcoin plans to distribute a special piece of hardware called the Orb around the world for anyone to scan their iris and get an ID via an app. Worldcoin says it uses privacy-preserving technology and plans to decentralize the governance of the protocol over time.
Why Is Worldcoin Important?
Worldcoin and many earlier proof-of-personhood protocols try to solve a few pressing issues in the real world. They include the following:
- Centralized proof-of-personhood systems
Many identification systems are reliant on centralized governments and are controlled by centralized entities. These centralized entities face a myriad of challenges including data privacy and sometimes limited accessibility.
- Spamming and AI-generated content
As AI becomes more capable of creating digital content that’s increasingly indistinguishable from human creations, it’s necessary to have a way to tell if certain content is created by a real human or AI. Having a proof-of-personhood solution can make it easier to resolve bot-generated spam, a problem that troubles many platforms and users.
How Does Worldcoin Work?
There are several key components of Worldcoin; a World ID, WLD tokens, the World App. A World ID is an ID that’s issued to one real person and used as proof of his or her personhood. A Worldcoin token is issued to the network’s participants. Both are accessed through the World App that users can download on their phones.
The way Worldcoin works is that users generate a private and public key with their World App. Users go to an Orb located nearby to have their iris scanned by the device to be verified as a real and unique human. This means that the iris scan must be of a real human and cannot be the same as another verified human.
Once verified, users will have an Orb-verified World ID. Around two million Orb-verified World IDs have been created as of July 2023 and the project aims to increase the number of Orbs to 1,500 over the next few months in more than 35 cities around the world. Worldcoin Users in some countries can already receive Worldcoin tokens, or WLD.
What Does Worldcoin (WLD)’s Tokenomics Look Like?
Worldcoin (WLD) is an ERC-20 token on the Ethereum Mainnet and eligible users are to receive their tokens on the Optimism Mainnet.
The initial token supply of WLD will be capped at 10 billion tokens for 15 years. After that point, the governance of the network can decide to implement an inflation rate of up to 1.5% and set up allocation mechanisms for the newly-minted tokens.
The initial token allocation of the 10 billion tokens looks like this:
- 75% of the tokens will be allocated to users, the ecosystem fund, and network operations, with a majority of these tokens allocated to users.
- Nearly 10% will be allocated to the founding team, 13.5% will be allocated to investors, and 1.7% will be used for reserves.
Before the launch of WLD, all 7.5 billion tokens allocated to users will be minted but the vast majority of those tokens will gradually unlock over 15 years. According to the token unlock schedule, the maximum circulating supply of WLD tokens at launch is 143 million, of which 43 million are allocated to verified users and 100 million are loaned to non-US market makers.
Worldcoin states that its tokenomics is designed to give the vast majority of the tokens to new and existing users over many years to come to create a proof-of-personhood network with as many people as possible. As more new users join the network, the circulating supply of WLD will continuously expand.
Who Is in Charge of Worldcoin?
Worldcoin’s goal of building a decentralized proof-of-personhood solution means that its governance should ultimately be decentralized. The initial development of the protocol, however, was developed by a team of developers at a Delaware corporation headquartered in San Francisco, California called Tools for Humanity (TFH). With a German subsidiary, TFH conducted multi-year beta testing of the protocol and developed the Orb and the World App.
A non-profit organization called the Worldcoin Foundation was set up in 2022 to scale the network as a public utility and build it toward decentralized governance. The Worldcoin Foundation is currently governed by a board with three directors alongside additional advisors and uses a 4-of-6 multi-signature wallet to take any action related to Worldcoin’s smart contracts. Ultimately, the Worldcoin protocol aims to be governed by its community with the foundation playing a limited role.
What Are the Limitations and Risks of Worldcoin and WLD Token?
Worldcoin has ambitious goals but it also has limitations and risks that you should be aware of if you intend to participate in its protocols or invest in its tokens. Some of the major challenges are as follows:
- Orb security
The security of the Orb is potentially a major risk, as no hardware systems can be 100% secure. The Orb is subject to a wide range of vulnerabilities, including fraud, accuracy, and potential data leaks or theft. Interacting with sensitive biometrics data, the Orb could produce devastating consequences in any potential security incidents.
- Token price volatility
The WLD token prices could experience significant volatility, similar to other cryptocurrencies. Investors should exercise caution and conduct thorough research before investing in the token.
- Risks of manipulation
Potential fraudsters could manipulate and use other people’s World IDs. Despite Worldcoin’s efforts to prevent anyone from accessing more than their own World ID, there are still ways for people to find loopholes to acquire multiple World IDs.
- Personal data privacy concerns
Some users are concerned about the safety of their sensitive biometric data. Even though Worldcoin doesn’t store full iris scan data and only stores the hashes of the scan, there are still many risks relating to scanning one’s eyeballs and sharing that personal data. Worldcoin may also implement facial recognition, which adds to this risk of data privacy.
- Centralization and open source
While large parts of the Worldcoin protocol are open source, some other parts such as the firmware of the Orb are not yet open source. Many operations of Worldcoin are centralized right now, including the data centers that store the hashes of iris scans and the Orb’s production and distribution. Even though decentralization is the long-term objective of Worldcoin, it’s subject to how well it can be implemented in the future.
- Regulatory uncertainty
Aiming to build a global protocol, Worldcoin is likely to encounter regulatory uncertainty and compliance issues as it navigates complicated and diverse local jurisdictions around the world. Local regulations could also change which could impact its operations significantly.
Closing Thoughts
Worldcoin is an ambitious project that’s trying to achieve aggressive goals. It sees its World ID as a tool that could ensure some form of universal basic income (UBI) can be equitably distributed to everyone around the world in the age of abundance driven by AI. While such visions excite many people, others are more concerned about the potential risks and challenges of its operations, particularly the iris scan and the collection and storage of biometric data.
As always, be cautious and do your own research when you invest in any crypto project and its tokens. The WLD token’s value will largely depend on how users react to the Worldcoin idea and if any practical applications and vibrate ecosystems can be built around it.
Critical Thinking Questions
- How might the implementation of Worldcoin’s proof-of-personhood system address issues of data privacy and security, and what potential risks could arise from this technology?
- Considering the potential for AI to generate high volumes of content, how important is it to distinguish between human-generated and AI-generated content, and what methods could be employed to ensure this distinction is effective?
- What are the ethical implications of using biometric data, such as iris scans, for identification purposes? How can Worldcoin balance the benefits of this technology with the concerns surrounding personal privacy?
- In what ways could the decentralized governance model proposed by Worldcoin influence the management and regulation of the cryptocurrency, and how might this impact the broader financial ecosystem?
- How do the potential benefits of Worldcoin’s universal basic income (UBI) vision compare with the challenges and limitations associated with its implementation, particularly in diverse and varied local jurisdictions?
Advocacy Initiative:
We encourage participants to begin memorializing the ways they are using time in prison to prepare for success upon release. I encourage participants to create a personal profile by:
- Writing a simple biography
- Writing a daily journal to show all that you’re learning
- Writing book reports that memorialize the books you read
- Writing a release plan to show the ways you’re preparing for success upon release
These strategies helped me immensely once I got out. By using my time wisely inside, I was able to raise capital, build businesses, and succeed in ways that few people would think are possible for someone who served multiple decades in prison. Anyone can do the same—if they prepare first.
If you’d like to follow in the same footsteps, I encourage you to begin building your personal profile. Get started by sending an email message to our team at:
Prison Professors Talent
[email protected]
32565 Golden Lantern, B-1026
Dana Point, CA 92629
Our interns will accept your email invite. You may then send the interns a message such as:
Dear Interns,
My name is xxx, and I am in prison. I would like to begin showing the strategies I am using to prepare for success upon release. Please send me a Release Plan Workbook, and any other books that will help me prepare for the job market. After receiving those workbooks, I will begin building my profile to show others how I am using my time inside to prepare for success outside.
Glossary
- Abundance (noun) – A very large quantity of something.
- Allocation (noun) – The process of distributing something.
- Ambitious (adjective) – Having or showing a strong desire and determination to succeed.
- Biometric (adjective) – Relating to the measurement and analysis of unique physical or behavioral characteristics, especially for verifying personal identity.
- Centralization (noun) – The concentration of control of an activity or organization under a single authority.
- Cryptocurrency (noun) – A digital or virtual currency that uses cryptography for security.
- Decentralized (adjective) – Distributing the administrative powers or functions of (a central authority) over a less concentrated area.
- Governance (noun) – The action or manner of governing.
- Hash (noun) – A fixed-length string or number generated from a variable-length piece of data, typically used in cryptography.
- Indistinguishable (adjective) – Not able to be identified as different or distinct.
- Iris (noun) – The colored part of the eye that controls the size of the pupil and thus the amount of light reaching the retina.
- Manipulation (noun) – The action of manipulating something in a skillful manner.
- Optics (noun) – The scientific study of sight and the behavior of light, or properties of transmission and deflection of other forms of radiation.
- Protocol (noun) – A system of rules that explain the correct conduct and procedures to be followed in formal situations.
- Regulatory (adjective) – Relating to or making regulations.
- Spam (noun) – Irrelevant or inappropriate messages sent on the Internet to a large number of recipients.
- Tokenomics (noun) – The study of the economics of cryptocurrencies, especially the supply and demand of tokens.
- Unique (adjective) – Being the only one of its kind; unlike anything else.
- Verification (noun) – The process of establishing the truth, accuracy, or validity of something.
- Vulnerability (noun) – The quality or state of being exposed to the possibility of being attacked or harmed, either physically or emotionally.
