Worldcoin 101: History, Controversy, and What Those Silver Balls Are

Iris-Scanning Orbs, Sam Altman, and Eth Layer 2s

Crypto offers us a never-ending stream of new projects, new tokens, and new personalities that dominate the hype cycle. It’s enough to tire out even the most passionate citizens of web3. But gleaming chrome iris-scanning orbs? That still gets our attention.

The shiny spheres that have been dominating our feeds are the product of Worldcoin, an ambitious new venture from Sam Altman (the man behind ChatGPT). Worldcoin claims goals as lofty as “universal access to the global economy” and “welcoming every person on the planet … to benefit in the age of AI.” Let’s take a look at Worldcoin’s history, tech, roadmap, controversies, and finally figure out what those silver balls actually do!

History and Team

Worldcoin was created by Tools for Humanity, a San Francisco-based start-up founded in 2019 by Sam Altman, Alex Blania, and Max Novendstern.

Sam Altman is the best known of the trio, with a prominent public profile as CEO of OpenAI, creators of ChatGPT. Not only did he lead ChatGPT to be the fastest ever app to reach 100 million users, Altman’s illustrious resume includes stints heading Y Combinator, Reddit, and Loopt. Alex Blania, CEO, joined Tools for Humanity fresh out of a physics masters program at Caltech. Max Novendstern recently left the company to start Mana, an AI venture capital fund.

In 2022, Andreessen Horowitz led a $10ew projects, new tokens, and new personalities that dominate the hype cycle. It’s enough to tire out even the most passionate citizens of web3. But gleaming chrome iris-scanning orbs? That still gets our attention. The shiny spheres that have been dominating our feeds are the product of Worldcoin, an ambitious new venture from Sam Altman (the man behind ChatGPT). Worldcoin claims goals as lofty as “universal access to the global economy” and “welcoming every person on the planet … to benefit in the age of AI.” Let’s take a look at Worldcoin’s history, tech, roadmap, controversies, and finally figure out what those silver balls actually do! History and Team Worldcoin was created by Tools for Humanity, a San Francisco-based start-up founded in 2019 by Sam Altman, Alex Blania, and Max Novendstern. Sam Altman is the best known of the trio, with a prominent public profile as CEO of OpenAI, creators of ChatGPT. Not only did he lead ChatGPT to be the fastest ever app to reach 100 million users, Altman’s illustrious resume includes stints heading Y Combinator, Reddit, and Loopt. Alex Blania, CEO, joined Tools for Humanity fresh out of a physics masters program at Caltech. Max Novendstern recently left the company to start Mana, an AI venture capital fund.0 million investment round, catapulting WorldCoin to an astonishing $3 billion valuation. On July 24, 2023, WorldCoin launched out of beta with operations in 20 countries.

Technology

Worldcoin’s technology stack spans three interconnected products: World ID, World App, and the WLD token.  

World ID

World ID has generated most of the attention, largely because of its striking hardware: a gleaming chrome orb used to scan irises (the colored part of our eyeballs.)

World ID uses iris scans to generate proof-of-identity for each user. The biometric information is used to create an “IrisHash,” which is stored on the orb. To prevent duplicates. Worldcoin uses a zero-knowledge proof to check if the IrisHash already exists in their database.

The user then continues registration with email, phone number, or QR code to create a World App wallet. World ID can be used to authenticate users across web platforms, mobile apps, and decentralized applications.

As of July 2023, 2 million people had been “orb-verified” with a World ID. Most of those people are located in the developing world, for reasons we’ll cover later.

World App

World App is Worldcoin’s native wallet, and proprietary to World ID and Worldcoin. It can be used for World ID-verified log-in, transactions, and other typical crypto wallet use cases. Note that you’ll need to find an Orb and get scanned in order to use World App.

WLD

WLD is the native token for Worldcoin. It is implemented as an ERC-20 token on Ethereum. The token's initial supply was 143 million and is capped at 10 billion, with a controlled inflation rate of 1.5% after 15 years of existence. Notably, 20% of these tokens have already been allocated, with 10% designated for WorldCoin's full-time employees and another 13.5% for investors like Andreessen Horowitz.

People are compensated in WLD for having their irises scanned. Approximately $25 worth of WLD is granted per scan, reflecting the project's novel approach to incentivizing participation.

Use Cases

Worldcoin anticipates a number of novel use cases for its combination of biometric identity verification and crypto:

Social Networks: Mitigating bot activity, enhancing community moderation, and ensuring content attribution.

Voting: Enabling DAO governance, facilitating government elections, online polls, and census efforts.

Financial Services: Facilitating undercollateralized lending, combating card fraud, and streamlining compliance measures.

Customer Incentives: Revolutionizing loyalty programs, coupons, referrals, and free trials.

Marketplaces: Bolstering reputation systems, combating fake reviews, thwarting fraudulent transactions, and preventing scalping.

Money Distribution: Redefining government welfare programs, aiding non-profit initiatives, supporting scholarships, and executing crypto airdrops and UBI (universal basic income) initiatives.

Controversy

For all the fanfare and attention Worldcoin's launch has attracted, its operations have also attracted a fair bit of controversy and regulatory scrutiny.

Many have criticized Worldcoin’s methods for amassing World ID scans, which involves paying users to be scanned, particularly in developing parts of the world. New users earn $15 worth of Worldcoin for the scan, plus $5 more when they log in to their Worldcoin wallets. Some more recent users have received $25 in total. Some have said this is too low for the amount of data received, and that participants are not adequately made aware of what they are participating in and how their data will be used.

Numerous countries have narrowed their eyes on Worldcoin. Kenya forced them to suspend operations, citing concerns about data privacy and unfair business practices, as did Turkey and Sudan. Data watchdogs in Germany have investigated Worldcoin since 2022, as well. Worldcoin has even preemptively made its products unavailable in the United States and China out of concern.

In May 2023, it was reported that malware had been installed on Worldcoin’s Orbs which compromised their security. Hackers were able to access operator passwords and post them on the dark web. The issue was eventually resolved, and a spokesperson said that no sensitive personal user information was accessed or compromised due to the Orb’s encryption of biometric data.

Worldcoin is still brand new, so the next few months are sure to be fascinating. We’ll keep you updated on everything, so follow Pontem on Telegram, Twitter, and Discord!

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