What is Worldcoin (WLD)? A Beginner’s Guide
Discover everything you need to know about Worldcoin, a new cryptocurrency that offers free WLD tokens in exchange for an iris scan. Learn all about its features and concerns.
On July 24, OpenAI CEO Sam Altman and Tools for Humanity CEO Alex Blania launched Worldcoin, a new cryptocurrency. The Worldcoin project, which has been in the making for nearly three years, is rather controversial as it encourages adoption by asking new users to scan their eyeballs in exchange for “free” WLD coins, causing concerns about user privacy and how the collected retina data could end up being used.
In this beginner’s guide to Worldcoin, we’ll discuss who Sam Altman is, what Worldcoin is, its tokenomics, how it works, and its future.
Before we dive in, note that you can safely buy and manage WLD using Trust Wallet, in addition to millions of other assets.
Who is Sam Altman?
Sam Altman is the CEO of OpenAI. OpenAI is an AI and research company popularly known for creating and launching ChatGPT in November 2022. ChatGPT is a powerful natural language-based AI bot that engages in human-like conversation and can also carry out various tasks like content creation and coding using prompts.
Altman has had several contributions to the tech industry even before his breakthrough with his firm, OpenAI, and the launch of ChatGPT. His interest in computers and programming stems back to primary school, where he was gifted his first computer.
After high school, Altman got accepted into Stanford University, one of the most prestigious learning institutions in the world, to study Computer Science. However, he dropped out after two years. His dropping out has been likened to that of Bill Gates and Mark Zuckerberg who dropped out of Harvard and became influential CEOs in the tech industry.
After dropping out of Stanford, Altman created his first venture, a smartphone app known as Loopt. Loopt helped people to share their live location with others selectively. The venture raised over $30 million for its launch and was later sold for $44 million in 2012. In 2014, Altman became the President of Y Combinator, a global start-up accelerator firm.
Other notable professional achievements Altman has had include founding Hydrazine Capital, a venture capital fund that got him a mention in the Forbes 30 Under 30 list for venture capitals.
He also ran Reddit for eight days amid a leadership shake-up. In 2015, Altman founded OpenAI in collaboration with other tech luminaries, including Elon Musk. His tenure at OpenAI has seen the company cease being a non-profit and is currently valued at over $29 billion, all thanks to ChatGPT’s launch.
Worldcoin’s (WLD) recent launch shows Altman’s commitment to artificial intelligence. His motivation for the Worldcoin project is based on his belief that the project will substantially influence the revamping of the economy in the wakening of generative AI.
Altman believes in a future where artificial intelligence will significantly improve human capabilities, giving rise to life-changing economic implications.
What is Worldcoin and how does it work?
Worldcoin is an open-source protocol that was created to give everyone access to the global financial economy.
The cryptocurrency was created to boost economic opportunity, empower universal democratic processes, scale a dependable solution for differentiating between humans and AI online while safeguarding privacy, and showcase a possible path to an AI-funded universal basic income (UBI) program.
Worldcoin utilizes three major tools that work hand-in-hand to achieve its goals. These tools include:
World ID - a privacy-preserving digital identity tool created to solve identity-based challenges. Simply put, the World ID feature helps eliminate any identity-based biases and prove that an individual is who they say they are based on their unique identity.
Worldcoin (WLD) token - a cryptocurrency that is universally and freely distributed to people simply for their existence. WLD will also be used as a utility token and for future governance.
World App - a self-custodial app that allows payment, transfers, and purchases universally using WLD, traditional currencies, stablecoins, and other digital assets.
Worldcoin’s World ID feature plays a significant role in exhibiting humankind in an online world filled with growingly advanced AI. This is why its creators consider it a ‘digital passport’ as using the iris scanning technology helps to prove that the holder is a real human being and not an AI bot.
How does Worldcoin work?
There are three steps to follow to use or get WLD. First, download the World App. The app is available for both Android and iOS users and is operated by Tools for Humanity (TFH). TFH is a global tech company founded to boost the transition towards a more just economic system.
Besides spearheading the early development of Worldcoin and operating the World App, TFH is also involved in developing tools and support required for the Worldcoin protocol.
After downloading the app, set up your account to access a digital wallet linked to WLD. You can also use the digital wallet for other digital currencies such as BTC, ETH, stablecoins, and traditional currencies. Next, you will need to sign up for World ID. Please note that you can still use the World App without signing up for World ID. However, if you want to receive free WLD, you must sign up for World ID.
To sign up for World ID, you’ll need to visit a Worldcoin Operator and verify your unique identity using an Orb. An Orb is a round, smooth, and shiny tool the size of a bowling ball. To verify your identity, you’ll need to stare into a black circle in the Orb which will scan your iris - a process known as iris scanning technology - to ascertain and record your identity.
Iris scanning technology utilizes near-infrared and visible light to take a high-contrast picture of an individual’s iris. It’s a type of biometric technology similar to fingerprinting or face recognition.
The Orb utilizes a system of infrared cameras, AI-powered neural networks, and sensors to scan people’s iris and verify that they are indeed human. Using an individual’s iris biometrics, the Orb can verify a person’s unique features and generate a digital World ID that can be utilized pseudonymously without revealing the person’s identity to access various everyday applications.
Lastly, you will be able to receive your WLD tokens alongside other digital currencies. Using their World ID, people can use the World App to learn about other cryptocurrencies and receive airdrops of other crypto assets.
OpenAI and Tools for Humanity launched Worldcoin on July 24, 2023. The project already had two million users who had joined during its beta period. Worldcoin currently plans on scaling up its ‘orbing’ operations to 35 cities across 20 countries.
Worldcoin’s orbing operations refer to providing the Orb to different qualified Worldcoin Operators. The qualified Worldcoin Operators will earn money whenever they sign people up using the Orb. People who sign up in specific countries will also receive the WLD token as a reward. It’s important to note that Worldcoin is not operational in all countries, including the US.
After its launch, popular exchanges like Binance enabled public trading for the WLD token. This resulted in a spike in its price from a starting price of $0.15 to $2.49 and then eventually to $5.29. With a total supply of 10 billion tokens, WLD’s price at the time of writing was $2.25 on CoinMarketCap.
From its design, all Orb-verified people with World IDs will be entitled to recurring claims of free WLD tokens. This specific move can make WLD the most widely distributed cryptocurrency. The WLD token has a locked maximum supply of 10 billion tokens for 15 years from its launch date and is enforced by a smart contract. Once the 15 years are up, the governance will decide whether to incorporate an annual inflation rate to sustain the protocol long-term. Should there be any additionally minted tokens after this period, the governance will determine their allocation.
Currently, the 10 billion WLD tokens have been allocated to various stakeholders. 75% of the 10 billion WLD tokens are allocated to the Worldcoin community, with another 9.8% allocated to the initial development team. The Tools for Humanity investors have been allocated 13.5% of the tokens while another 1.7% to a TFH reserve.
As a utility token, WLD features governance properties that empower its holders to have a say over the token’s future. Besides the one-token-one-vote mechanism typical of governance tokens, WLD, thanks to the World ID feature, will ensure a one-person-one-vote mechanism. Moreover, combining the two mechanisms can offer new ways of governance. These can be championed by The Worldcoin Foundation, a non-profit organization established to grow and support the Worldcoin community until it achieves autonomy.
Already, The Worldcoin Foundation plans to solicit proposals from its community and work with them to establish how WLD and World ID should relate in Worldcoin’s governance structure.
In addition, WLD’s community is expected to determine its utility besides governance. For instance, its holders can use the token to pay for various activities in the World App or another crypto wallet like Trust Wallet.
Is Worldcoin affiliated with ChatGPT and OpenAI?
Currently, the only affiliation that Worldcoin has to ChatGPT and OpenAI is that Altman founded both projects. Whether there’ll be any interrelation in the future beyond having a common founder is unclear.
However, some AI enthusiasts believe that Worldcoin could potentially influence ChatGPT since ChatGPT and other AI-generative chatbots can produce human-like language. Over time, it might be hard to distinguish between AI bots and real people online. Thus, the use of World IDs that can be stored on the blockchain to preserve their privacy can come in handy to help distinguish between AI and people. In addition, World ID could also provide people access to apps such as ChatGPT or other social apps.
In addition, Altman believes that Worldcoin can help address how the economy will potentially be reshaped or revamped by generative AI.
According to Altman, Worldcoin’s World ID can be used to scale UBI to billions of people and give marginalized and poor communities access to financial empowerment, thus combating income inequality.
Since only human beings can have World IDs, the government could use iris technology when deploying UBI and reducing fraud. Altman believes that this is a major vision for Worldcoin and World ID. However, there are skeptics concerned about the logistics feasibility and safety of this.
Ethereum Founder Vitalik Buterin's Opinions on Worldcoin
The launch of Worldcoin hasn’t been short of criticism.
One person who’s come out to share his concerns about the crypto projects is Ethereum’s Co-Founder, Vitalik Buterin. According to Buterin, the project faces issues with accessibility, centralization, privacy, and security.
On accessibility, Buterin wrote that World IDs wouldn’t be readily and reliably accessible to people unless Altman and his team plan to produce so many Orbs. As discussed earlier, to get a World ID, a person must visit a Worldcoin Operator with an Orb and scan their eyes. However, the Orbs are currently limited in number, and not everyone in the world will be able to easily access one. This could further affect Worldcoin’s scalability.
Buterin’s concern about centralization is that the Orb is a hardware device created by humans. Therefore, there is no way of verifying that no backdoors exist. Given that The Worldcoin Foundation is responsible for supporting Worldcoin until it becomes independent, there’s no way to ascertain that they can’t insert a backdoor into the system. Thus, despite it having a software layer, there’s no way to verify that the software cannot create multiple fake human identities.
Regarding privacy, the Ethereum Co-Founder believes that scanning people’s iris’ could potentially reveal more information than was initially intended. For example, someone can scan someone else’s iris and run it against the Worldcoin iris registry to determine if the person is in the system. If any other personal data is associated with the iris scan, it could be misused.
On security, Buterin shared that people’s phones could be hacked or authoritarian regimes could force them to scan their irises which still presents a burden for people to have the perfect ‘proof-of-personhood.’
While Buterin recognizes the efforts made by Altman and Blania, he also acknowledges that it might be hard to achieve a perfect solution to overcoming identity issues.
In his critique of Worldcoin, Buterin mentioned three identity-verification approaches that all have their advantages and disadvantages. The three approaches involve general-hardware biometric, social-graph-based, and specialized-hardware biometric solutions like Worldcoin. He also stated that Worldcoin could collaborate with other proof-of-personhood projects that rank high on accessibility, decentralization, and privacy.
Risks and Challenges for Worldcoin
While Worldcoin has made efforts to ensure people can prove their real human identities, it still has a long way to go. The project already has some notable risks and challenges.
One such roadblock is accessibility. Currently, Worldcoin only has 1,500 Orbs it intends to make available in 35 cities in 20 countries. Considering the world has over seven billion people, 1,500 Orbs will not be enough to serve the global population. And even if Altman and his team were able to produce the needed number of Orbs, there is the possibility that certain governments could ban the use of Orbs just like we’ve witnessed countries ban cryptocurrencies over the last few years.
In addition, the project has existed for the last three years. In this period, it has managed to sign up two million users, which begs the question, how many more years and Orbs will it require to get everyone signed up?
Moreover, when it comes to privacy, the technology could potentially capture additional data, including a person’s ethnicity, medical condition, and sexual orientation, among others. Such personal data could end up being misused if it ends up in the wrong hands or even lead to victimization. Governments could also use such data to coerce their citizens.
There’s also the issue of centralization. Currently, there’s no way to determine that there are no backdoors in the Orbs to manipulate the sign-ups. However, Worldcoin stated that it plans to conduct regular audits on its Orbs to guarantee they are built the right way.
Additionally, Buterin warned that creating a perfect proof-of-personhood solution may not be easy. Instead, he acknowledged that creating such a robust system will require time - years, even - to develop a reliable and effective solution.
Since Worldcoin is a new crypto project, we are yet to witness its full potential. However, some believe that it could impact various fields, such as AI, technology, and the world economy. In AI, Worldcoin can help to identify humans from AI-generated bots and grant the required access. Moreover, it can significantly impact UBI programs globally, boosting financial inclusion for marginalized communities.
For now, however, it’s hard to say what kind of future Worldcoin will see. The project faces various roadblocks that can hinder its adoption and scalability unless the team rectifies some of the current concerns.
Remember, if you want to buy WLD, do your own research, and use a secure wallet like Trust Wallet to help you buy and manage your digital assets.
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Note: Any cited numbers, figures, or illustrations are reported at the time of writing, and are subject to change.