Users Seek Unverified KYC Verifications as Worldcoin Gains Popularity Despite Restrictions Challenging Blockchain-Based Identification System
As Worldcoin, a cryptocurrency initiative started by OpenAI CEO Sam Altman, finds pace in China, there has been an increase in demand for know-your-customer (KYC) verifications on the black market.
Worldcoin wants to create a global blockchain-based identity system that uses iris scans, but because of strict internet rules, its cryptocurrency wallet, World App, is still inaccessible in mainland China.
However, Chinese users have turned to other methods of obtaining the programme, which has caused a black market for Worldcoin credentials to develop.
Worldcoin-related searches have significantly increased on social media platforms in China.
The Worldcoin hashtag on Weibo, China's version of Twitter, grew from zero to around 20,000 mentions in May, peaking on May 21.
Similar to this, WeChat searches, a well-known social networking platform, increased by 225% on May 18 compared to the day before.
Sam Altman, the creator of Worldcoin, testified before the US Congress on May 16; this most likely led to the increased interest in the project.
On Chinese social media and e-commerce platforms, a black market has developed in response to the rising demand. For the World App, sellers offer KYC verifications while also offering wallet and ID services.
According to social media posts, these credentials are frequently drawn from underdeveloped nations like Kenya and Cambodia. While acknowledging hundreds of these incidents, Worldcoin guarantees that no critical data has been compromised.
To stop fraud, the organisation has put in place threat and awareness monitoring systems.
Not only Worldcoin but also other cryptocurrency exchanges and services within China's internet ecosystem have black marketplaces for credentials. The presence of black markets is a result of merchants continually finding ways to get over limitations on cryptocurrency transactions in mainland China.
One of the core objectives of Worldcoin—to create a blockchain-based, iris recognition-based worldwide identity system—is challenged by the growth of the black market. Users must visit a local Worldcoin agent to have their irises scanned by a futuristic metal orb, ensuring anonymity and storing the data locally, in order to register on the World App.
The internet could be revolutionised by this "privacy-first, self-custodial, decentralised" identifying system.
However, the World App's wallet functions are where it is most commonly used right now.
Worldcoin endeavours to attract users by offering free tokens to those who sign up. In a recent announcement, the company unveiled its partnership with decentralized email service Dmail, promising free non-fungible tokens (NFTs) for signees. Nevertheless, the emergence of a black market undermines Worldcoin's objectives and raises concerns about the integrity of its identification method.
Chinese crypto website Blockbeats initially reported the existence of the black market, revealing that fake iris scans could be obtained for as little as $20.
On Taobao, China's e-commerce platform similar to Amazon, listings for Worldcoin access have surfaced. CoinDesk's review of these listings revealed various options, ranging from a simple app download for RMB 9.9 ($1.41) to full KYC certification for RMB 499.
As Worldcoin gains popularity in China, the emergence of a black market for its credentials threatens the vision of establishing a blockchain-based identification system. Despite restrictions and inaccessibility, users seek alternative means to acquire the World App, leading to fraudulent activities and the compromise of the project's fundamentals.
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