What is Worldcoin and How Does It Work?
Worldcoin is a unique cryptocurrency project that has been making waves in the crypto world. Worldcoin uses biometric data, specifically iris scans, unlike traditional cryptocurrencies, to distribute its tokens. It distinguishes itself from other cryptocurrencies through its unique distribution method and mission to create a more equitable financial system.
The goal is to create a universally accessible digital currency that ensures everyone receives their fair share. In this blog, we will delve into the details of Worldcoin, its workings, and why it is attracting so much attention.
What Is Worldcoin?
Worldcoin is an Ethereum-based open-source global currency designed to give everyone access to the global economy. The concept behind Worldcoin started with a question: "What if there were a way to freely distribute shares of a new digital token to every person on the planet?" This question led to the creation of Worldcoin.
The project was launched by Sam Altman, the former president of the Silicon Valley accelerator Y Combinator, and Alex Blania, a physicist. The idea behind Worldcoin is to distribute a new, collectively owned global currency fairly to as many people as possible. The catch? To receive your share of Worldcoin, you must agree to an iris scan using a specially designed device called the "chrome orb."
The project aims to use technology to achieve global wealth redistribution by building the world's largest identity and financial public utility. This concept has been likened to a form of universal basic income.
Key Components of Worldcoin
Worldcoin comprises several tools that work together to achieve its mission:
- World ID: A privacy-preserving digital identity designed to prove an individual's unique personhood.
- Worldcoin Token (WLD): The first token to be globally and freely distributed to people for both utility and future governance, just for being unique.
- World App: A fully self-custodial app that enables payment, purchases, and transfers globally using the Worldcoin token, digital assets, stablecoins, and traditional currencies.
Who is behind Worldcoin?
Worldcoin is the brainchild of Sam Altman and Alex Blania. Altman, a well-known figure in the tech industry and the co-founder and CEO of OpenAI, previously headed the startup accelerator Y Combinator.
Two key organizations currently support Worldcoin:
- The Worldcoin Foundation: A non-profit organization set up to support and grow the Worldcoin community until it becomes self-sufficient. It aims to cultivate a community of developers, make grants, and establish ways for the user community to participate in the protocol's governance.
- Tools for Humanity (TFH): A global technology company established to accelerate the transition towards a more just economic system. It led the initial development of the Worldcoin protocol and continues to build tools and support the Worldcoin protocol, in addition to operating the World App.
Tools used by Worldcoin
The primary tool used by Worldcoin is the "Chrome Orb," a high-tech device equipped with advanced cameras and sensors. This orb scans users' irises and high-resolution images of their body, face, and eyes. It then creates a digital World ID that can be used pseudonymously without revealing the user's identity.
How Does Worldcoin Work?
Worldcoin works by biometrically confirming that an individual is human. This is done using the Chrome Orb, which scans participants' irises and other biometric data points.
The biometric information is used to generate an "IrisHash," a code that is stored locally on the orb. The orb then uses a proprietary algorithm to cryptographically confirm that they are human and unique in Worldcoin's database.
This process is meant to prevent double-dipping and ensure that each person gets their fair share of Worldcoin tokens—and no more. By biometrically confirming an individual's humanity, Worldcoin also aims to solve the problem of Sybil attacks, which occur when one entity in a network creates and controls multiple fake accounts.
The Working Mechanism of Worldcoin
Worldcoin works in three steps:
- Download the World App: This allows users to set up their Worldcoin account and access a digital wallet connected to Worldcoin, Bitcoin, Ethereum, and other digital and traditional currencies.
- Sign up for World ID: To receive a free share of Worldcoin Tokens and other digital currencies, a person must sign up for World ID by visiting a Worldcoin Operator and verifying their unique personhood at an Orb.
- Receive your share of Worldcoin and other digital currencies: Once an individual has verified their unique personhood, they can use their World ID within the World App to learn about digital currencies and receive free airdrops of Bitcoin, Ethereum, and more.
Criticism of Worldcoin
Despite its innovative approach, Worldcoin has faced criticism over its handling of biometric data. Critics argue that the project's personal data collection methods, such as iris scans, could be misused or mishandled, leading to privacy breaches and potentially violating privacy rights and data protection regulations.
Critics have also questioned the company's approach to fairness, given that 20% of the coins have already been allocated to Worldcoin's full-time employees and investors. There are also concerns about the company's marketing practices, with allegations of deceptive tactics used to recruit new users and the lack of information about how their data is being used.
Worldcoin's vision of a fairly distributed global currency is ambitious; its promise of a fairly distributed global currency is undoubtedly appealing. Its unique identity verification and token distribution approach sets it apart from other digital currencies. But, the project's use of biometric data raises serious privacy concerns. Particularly in developing nations, the company's methods of achieving its vision have raised questions about practices and the broader implications of its work.
As Worldcoin grows, monitoring how these issues are addressed and whether it can truly revolutionize the cryptocurrency and global economic landscape will be important.