What is Worldcoin?

Worldcoin, the massive vision of OpenAI CEO Sam Altman, has finally been introduced after years of challenging development. The idea which has now become a goal originated in the mind of the amazing "ChatGPT" inventor in 2019. 

Consider a society in which every human being is entitled to a portion of digital money merely for existing. A society in which online identities are safeguarded by cutting-edge privacy safeguards and global democratic procedures are made possible.

This idea is at the heart of Worldcoin, a game-changing project launched to create a worldwide inclusive identification and financial network controlled by the vast majority of humanity.

This digital ID startup intends to address one of the most important concerns posed by recent breakthroughs in artificial intelligence: differentiating between human-created and algorithm-generated information. 

How Does WorldCoin Work?

An eye-scanning "orb" at the heart of this new concept offers individuals a unique digital identity, certifying their legitimacy as genuine humans, not bots.

The Worldcoin project includes not just cutting-edge eye-scanning technology, but also the Worldcoin cryptocurrency. To use this money, users must first prove their identity using eye-scanning.

The platform's companion app enables users to make frictionless payments, move funds, and discover a world of other digital assets. Following a very successful test period with over 2 million users, Worldcoin is now expanding its eye-scanning operations to 35 locations across 20 nations.

During the beta period, qualified participants received the Worldcoin cryptocurrency token, which is currently tradable. Several significant exchanges, including the world's largest crypto exchange Binance, have either listed or announced plans to offer the coin. Alex Blania, the co-founder, emphasised that in the age of AI, the necessity to confirm a person's authenticity is no longer debatable.

Worldcoin's purpose is to provide a privacy-first, decentralised, all-encompassing answer to this critical issue. This is represented in the Twitter:

“Building the world’s largest identity and financial public utility, giving ownership to everyone.”

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The Vision of Worldcoin

Worldcoin was born with a grand vision – to create a globally-inclusive identity and financial network that would be owned and accessible to the majority of humanity. At the heart of this vision lies the idea of democratizing access to financial resources and empowering individuals with their digital identity.

The project envisions a future where economic opportunities are not restricted by geographical boundaries, and every person has a fair chance to participate in the global digital economy. To achieve this, Worldcoin introduces the concept of "proof of personhood," a novel approach to establish a person's uniqueness and humanness without compromising their privacy.

Understanding "Proof of Personhood"

Proof of personhood is one of the fundamental pillars of the Worldcoin project. It is the cornerstone on which the entire network is built, and its successful implementation could pave the way for significant advancements in various domains.

The idea behind proof of personhood is to create a mechanism that can reliably distinguish between real humans and AI-powered bots or algorithms. In today's digital world, this has become an increasingly challenging problem. With the rapid development of artificial intelligence, distinguishing between humans and machines has become a pressing concern, particularly in online interactions, voting systems, and resource distribution.

Worldcoin recognizes that traditional methods of identity verification are no longer sufficient in an AI-dominated landscape. As AI models become more powerful and adept at mimicking human behaviour, a more robust and privacy-preserving solution is needed.

The Proof of Personhood Mechanism

The successful implementation of World ID's proof of personhood mechanism relies on several crucial building blocks:

Deduplication: Ensuring that every individual can only verify their humanness once is essential for maintaining the integrity of the network. Deduplication prevents fraudulent actors from registering multiple times.

Authentication: Authenticated ownership of proof of personhood credentials is crucial for ensuring that only legitimate users can access and use the credentials. This layer of authentication is vital to maintaining the privacy and security of individual users.

Recovery: In case of lost or compromised credentials, a robust recovery mechanism is required to allow users to regain possession of their World ID. This ensures that users can retain control over their identity and prevent unauthorized access.

Source: WorldCoin

Together, these building blocks create a comprehensive proof of personhood mechanism that upholds the integrity and security of the Worldcoin network.

World ID: Privacy-Preserving Digital Identity

World ID is the privacy-preserving digital identity network at the core of Worldcoin. It is designed to enable users to verify their humanness online while preserving their privacy through the use of zero-knowledge proofs. The unique aspect of World ID lies in its utilization of a custom biometric device called the Orb.

The Orb is a cutting-edge biometric verification device that employs multispectral sensors to verify an individual's humanness and uniqueness. This is done in a way that ensures the individual's real-world identity remains concealed. The Orb operates on the principle of zero-knowledge proofs, allowing individuals to prove they are human without revealing any sensitive information about themselves.

The use of the Orb addresses the challenge of reliable proof of personhood, offering a secure and privacy-focused approach to identity verification. By leveraging custom biometric hardware, World ID aspires to become a global standard for proving personhood online, making it an essential component of the Worldcoin network.

World ID ensures privacy by locally checking humanness, and avoiding image storage. Zero-knowledge proofs reveal minimal data. The device aims for decentralized control of issuance.

Deduplication: It uses iris biometrics to ensure one unique proof per person globally.

Authentication options: Face ID-like method on user's device, Iris authentication requires returning to Orb for heightened security.

Recovery: Backup or reissuance at Orb available. No recovery for other credentials for security.

Revocation: The Worldcoin Foundation can deny a list of specific World IDs to counter potential fraud.

Expiry: World IDs may have set expiry for security and re-verification.

What is the World App?

World App serves as the first frontend to World ID and plays a vital role in guiding individuals through the verification process. As the gateway to the Worldcoin network, World App provides a frictionless experience for users looking to obtain their World ID credentials.

Through World App, users can interact with the Orb and have their credentials verified. It also implements cryptographic protocols to ensure the secure sharing of credentials with third parties in a privacy-preserving manner.

World App's design embodies the principles of user empowerment and accessibility. Its intuitive interface and seamless functionality are intended to encourage mass adoption, allowing more people to participate in the global financial and identity network.

What is WorldCoin Token WLD?

At the core of the Worldcoin ecosystem lies the WLD token, a key component in aligning incentives and driving the growth of the network. The WLD token is issued to all network participants, facilitating the expansion of the Worldcoin project and overcoming the "cold start problem" often encountered in the early stages of decentralized networks.

One of the remarkable aspects of the WLD token is its distribution. The majority of tokens are allocated to individual human beings, making WLD potentially the most widely distributed digital currency. This distribution strategy reflects Worldcoin's commitment to creating an inclusive and equitable financial ecosystem.

For the first 15 years after launch, the supply cap is set at 10 billion WLD (regulated by the WLD smart contract). After 15 years, governance may opt to implement an inflation rate of up to 1.5% per year if it believes it necessary for the protocol's long-term viability. Governance will also decide how to distribute any newly generated tokens. The WLD smart contract enforces the 1.5% annual inflation cap. The inflation rate is set to 0% by default until altered via governance.

The Future of Worldcoin: Potential Applications

Worldcoin's potential applications are vast and far-reaching. As the network grows and gains adoption, its impact can be felt across multiple domains, transforming the way people interact with finance, identity, and governance.

Finance

At the forefront of Worldcoin's applications is the potential to revolutionize global finance. With the issuance of digital currency that transcends geographical borders, sending money across the world could become near-instantaneous and borderless. Financial transactions could become accessible to everyone, irrespective of their location or traditional banking access.

One significant example of the potential of Worldcoin in finance is the COVID relief fund for India. In a demonstration of what is possible, over $400 million was raised in a short period through global contributions to support the country during the pandemic. This exemplifies how Worldcoin's financial infrastructure could connect people globally, enabling them to support each other in times of need.

Moreover, digital money offers increased safety compared to physical cash, which is susceptible to theft and forgery. In crises, such as the Ukrainian refugee crisis, where instant cross-border financial transactions were essential, digital money proved to be a valuable asset. It allows individuals to have direct control over their assets without relying on third parties.

Identity

Worldcoin's World ID tackles one of the most pressing issues of the digital era – the presence of bots, spam messages, and robocalls. With the rise of powerful AI models, these challenges have become increasingly difficult to address through traditional methods.

By providing a reliable and privacy-preserving solution for proof of personhood, World ID can significantly reduce noise and fraudulent activity in the digital world. By including a "verified human" property in every interaction, many malicious activities can be filtered out, making the digital realm safer and more trustworthy.

Governance

World ID opens up new possibilities for global democratic governance mechanisms, both in the web3 space and the internet as a whole. Traditional token-based governance systems, where one token equals one vote, can be exclusive and favour those with more economic power.

With World ID, a Sybil-resistant proof of personhood, more inclusive and democratic governance models become feasible. By including everyone in the decision-making processes of web3 and beyond, Worldcoin can contribute to fairer and more equitable governance.

The intersection of Finance and Identity

One of the intriguing intersections of finance and identity lies in incentive alignment. Traditional mechanisms like coupons, loyalty programs, and referral programs often fall victim to fraudulent activities, resulting in a loss of value for both consumers and companies.

World ID's frictionless and fraud-resistant digital identity can revolutionize these value-sharing programs, ensuring that incentives are aligned and benefit both parties. This could usher in a new era of companies partially owned by their users, fostering greater transparency and accountability.

Additionally, Worldcoin's proof of personhood protocol has the potential to optimize the distribution of scarce resources, such as subsidies and social welfare programs. In developing economies, where resource captures through fake identities is a prevalent challenge, decentralized proof of personhood could prevent fraud and ensure equitable distribution of resources.

Moreover, as AI becomes more influential in generating economic value, the need for a universal basic income (UBI) may become more pronounced. World ID's ability to guarantee that each registers only once could play a vital role in implementing a fair and AI-funded UBI system.

Decentralized Worldcoin Protocol

To achieve its vision, Worldcoin relies on a decentralized protocol that removes single points of failure, promotes trustlessness, and encourages independent participation. The protocol is designed to be permissionless, allowing anyone to issue and use credentials without central approval.

A crucial aspect of the Worldcoin protocol is its support for custom wallets. This flexibility allows users to choose their preferred wallet, promoting interoperability and providing individuals with greater control over their financial assets and identity.

Role of the Orb

The Orb serves as a vital component in the proof of personhood process within Worldcoin. It is a biometric verification device equipped with multispectral sensors, designed to ensure the uniqueness and humanness of individuals.

The decentralized issuance and custody of the Orb present several challenges, chief among them being the need to maintain high credential integrity. Different mechanisms are employed across all participants, from hardware manufacturers to individual Orb operators to users, to prevent actions that undermine the integrity of the credential.

The usage of "The Orb," a gadget that scans users' irises to ensure each individual has only one Worldcoin ID, successfully identifying humans from bots, is what makes Worldcoin distinctive.

The present version of the Orb, which is open-sourced, is the result of three years of R&D, including one year of small-scale field testing and one year of transition to large-scale manufacturing. Feedback for design enhancements is welcomed and encouraged. The rest of this part will take you through a deconstruction of the Orb, complete with engineering anecdotes.

Source: WorldCoin

Tokenomics of Worldcoin

The WLD token plays a central role in incentivizing network growth and aligning participants' interests with the project's mission. The majority of WLD tokens are allocated to individual human beings, reflecting Worldcoin's commitment to equitable distribution.

At launch, the maximum circulating supply of WLD is set at 143 million tokens. The token operates as an ERC-20 token on the Ethereum Mainnet, with the potential to bridge back to Ethereum through the Optimism network if needed.

Tools For Humanity, the company behind Worldcoin, raised $115 million in a Series C investment round led by Blockchain Capital and a16z, with a total WLD token issue of 10 billion.

The Worldcoin community receives 75% of the token allocation, the development team receives 9.8%, and Tools for Humanity investors receive 13.5%.

The WLD token is now worth $1.88 per token, with a fully diluted valuation (FDV) of $18.8 billion. On 2023-07-24 at 09:00 (UTC), WLD spot trading pairs will be accessible on Binance, the world's largest crypto exchange. Let's see how the tokenomics distribution works with WorldCoin.

 

Concerns, Prospects and Criticism

Despite its accomplishments, Worldcoin has faced criticism for its usage of biometric data for identity verification, as well as privacy issues. The project's potential expansion is hampered by the project's exclusion of the US market owing to regulatory uncertainties. 

Sam Altman is upbeat, intending to lure 2 billion users to the network while increasing Orb operators and producing additional orbs.

Worldcoin has been chastised for its handling of biometric data. Former US intelligence contractor Edward Snowden commented in reaction to Altman's tweet announcing the initiative in 2021, "Don't catalogue eyeballs."

During the project's testing, MIT Technology Review voiced concerns about Worldcoin's approach to gathering biometric data from underdeveloped countries like as Indonesia, Kenya, and Colombia.

According to the study, the corporation engaged in "deceptive marketing practises, collected more personal data than it acknowledged, and failed to obtain meaningful informed consent" from users.

People in China have been buying iris scans on the black market to gain access to the Worldcoin beta network, which provides KYC verifications for the World App, according to a Gizmodo investigation.

Worldcoin claims that once its systems are optimised, it would anonymize and erase users' biometric data to protect their privacy. Despite having recorded and stored thousands of iris scans to train its algorithms, the corporation has yet to specify a data deletion deadline.

Worldcoin's vision of a globally-inclusive identity and financial network offers tremendous potential for the future. By combining privacy-preserving proof of personhood with a scalable digital currency, Worldcoin can pave the way for greater economic opportunity, democratic governance, and protection against AI-powered threats. With World ID and WLD at its core, Worldcoin is set to revolutionize the way humanity interacts online and empower individuals worldwide with ownership over their digital identities and finances.

Bottom Line

Worldcoin's innovative approach to addressing pressing global challenges has the potential to shape a more inclusive and equitable world. As the project progresses and its network expands, the impact of Worldcoin's vision on global financial inclusion, online interactions, and governance could be profound, transcending geographical and cultural boundaries.

As Worldcoin continues to grow, its potential applications may extend beyond what is currently envisioned. With its focus on user empowerment, privacy preservation, and global accessibility, Worldcoin is poised to be at the forefront of the next wave of blockchain innovations. The project's success lies not only in its technological advancements but also in the positive impact it can have on the lives of billions of individuals around the world.

The recent achievements of Worldcoin, from receiving significant funding to releasing its WLD token on the Optimism Mainnet, herald a new era in the cryptocurrency market. Worldcoin is well-positioned to address major difficulties posed by AI developments, thanks to its pioneering Orb technology and unwavering dedication to identity verification. 

However, as the initiative seeks to realise its ambitious aim, considerations about biometric data usage and regulatory impediments must be carefully considered. Worldcoin's journey promises to be an exciting and revolutionary chapter in the expanding realm of decentralised digital identities and cryptocurrencies as it proceeds forward.

Also Read: Worldcoin (WLD) Price Prediction; Will it hit $1?

WorldCoin FAQs

What is the purpose of WorldCoin?

Worldcoin is a decentralised open-source protocol that is supported by a global community of developers, economists, and engineers that are dedicated to increasing participation in and access to the global digital economy. It is meant to become a public network that everyone owns.

Is WorldCoin safe?

The Worldcoin project has had its fair share of detractors from its initial beginning several years ago. The use of biometric data—eye scans—to authenticate users' identities is a major source of worry, particularly the privacy dangers associated with collecting, keeping, and exploiting such data.

How do you earn from WorldCoin?

You earn money as a Worldcoin Operator for each person you sign up with an Orb. You'll need to establish a team, find out where to operate your operations, and get people enthusiastic about starting their crypto adventure if you want to be successful. 

Who created WorldCoin?

WorldCoin was launched in 2019 by OpenAI CEO Sam Altman, Max Novendstern, and Alex Blania, and is supported by venture capital firm Andreessen Horowitz.

Is WorldCoin a good investment?

Looking at its price and the backing one could say that the project is reliable and good to invest in. However, do your research before investing in any crypto projects as crypto market is subjected to market risks.