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What is Worldcoin, and what can it do?

28 Jul, 2023

Worldcoin (WLD), the crypto project co-created by OpenAI CEO Sam Altman and his US-German company Tools For Humanity, is the latest trending token in the cryptocurrency community after the coin price made double-digit gains in less than 24 hours, going from zero to over $2 and currently trading for around $2.30. The momentum behind this new cryptocurrency is in part due to its unique selling point, which has excited investors and early adopters but also disturbed some rivals in the crypto space.

A digital passport to combat AI fraud

The core concept behind the project is that of the World ID, described by the company as a kind of 'digital passport' that the holder can use to prove that they are a real human instead of an AI bot. To get this proof, a World ID customer needs to undergo an in-person iris scan using a device called an Orb, a silvery sphere that records the biometric data, verifies that the user is a real human, and then assigns them a World ID. Users of a World ID gain access to a gas-free crypto wallet via the company's World App, which stores the relevant financial data about the user, including transactions and KYC data, locally on their device.

One use of such a digital passport could be to prove one's identity to all kinds of websites and online services without the need to use a password or give user credentials to a website. This could reduce or even eliminate certain cyberattacks, such as phishing or having one's data exposed and sold because a company's databases were breached by hackers.

Controversy in the crypto community

Technology enthusiasts will quickly pinpoint the excitement and controversy surrounding Worldcoin. On the one hand, the threat of AI impersonation and fraudulent content is a real threat to the integrity of the internet, especially as large language models become increasingly adept at generating human-seeming text and images. The Worldcoin project and token represent a real use case. On the other hand, biometric records and in-person registration appear to run counter to the ideals of anonymity and decentralisation that inspired the original cryptocurrency movement.

Jack Dorsey of Twitter and Square fame has criticised the project's ambitions by stating that no entity should have such control over the global financial system. Ethereum co-founder Vitalik Buterin, however, appeared to be more cautiously optimistic, supporting digital proof-of-personhood solutions like Worldcoin and similar projects as essential in solving "anti-spam and anti-concentration-of-power problems". Referring specifically to Worldcoin, he wrote on his blog that if the project continues to decentralise as promised, it would reduce "dependence on centralised authorities and reveal the minimal information possible".

The project developers behind Worldcoin have addressed privacy concerns by clarifying that the project does not store user data. Instead, it generates a zero-knowledge proof to verify that the user is human without revealing the data used to create the proof.

After completing a beta phase with 2 million users, Worldcoin is scaling up its operations post-launch and planning to set up its Orbs in 35 cities across 20 countries. But where does the coin come in? Well, Tools For Humanity is offering the WLD crypto token as an incentive for new users who sign up for the World ID via the iris scan. Right now, Worldcoin may not have an economy based around it, but it is a hot commodity thanks to the fantastic gains it has made in dollar value in just a few days after its launch.

Crypto and AI collide

Project co-founder Alex Bania has explained the choice of blockchain technology as a basis for World IDs because the decentralised ledger technology controls privacy and cannot be taken over or shut down by any one entity.

Speaking to the press, Sam Altman also outlined how he saw Worldcoin as the foundation of a new economy that is being transformed by AI. "People will be supercharged by AI, which will have massive economic implications," he told Reuters. "AI will do more and more of the work that people now do." Given this premise, Altman references the concept of a universal basic income (UBI), in which people receive a guaranteed income, no strings attached, to survive in a world in which much of the productive work has been automated. A system like the World ID and Worldcoin could ensure that only real humans receive this income and prevent fraud by AI tools.

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The success of projects like Worldcoin goes to show that cryptocurrency is moving into the mainstream as existing financial systems and investors see the value of digital assets and blockchain. But you don't have to be a big bank to profit from cryptocurrency prices; the best of the crypto market is accessible directly from your smartphone.

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