What is Worldcoin and how does Worldcoin work? Everything you need to know
Worldcoin is a digital currency that aims to provide universal basic income (UBI) to all individuals worldwide. It operates on a blockchain platform and distributes coins through a unique scanning process that verifies identity without compromising privacy.
What is Worldcoin?
Worldcoin is a digital identification platform designed to authenticate individuals as genuine humans rather than bots or AI algorithms. Founded by Altman, known for creating ChatGPT, the company, Tools for Humanity, aims to address issues exacerbated by the AI gold rush. Worldcoin utilizes cryptographic and blockchain technologies, offering a digital passport system and supporting the WLD crypto token and a payments platform.
How does Worldcoin work?
Think of Worldcoin as a three-part system: It relies on three interconnected components for its operation.
World ID
At the core of the platform is World ID, designed to allow users to verify their humanity online while safeguarding their privacy. This "proof of personhood" is established through iris scanning using the Orb device.
Each person's iris pattern is unique, much like fingerprints. The Orb captures the iris pattern and generates a distinct identification code called an IrisCode, which is not linked to personal data. This prevents individuals from acquiring multiple World IDs. Once the Orb scans the iris and saves an anonymous IrisCode, it issues the World ID and permanently deletes the iris image. Users don't need to undergo iris scanning each time they verify their identity.
World IDs are stored on the Worldcoin blockchain, and users utilize a secure app for identification. Worldcoin Orbs are currently available in numerous cities worldwide.
World App
The World App serves as the repository for users' World IDs, preserving privacy while granting access to various decentralized finance applications. Apart from storing the World ID, the app functions as a cryptocurrency wallet, supporting Bitcoin, Ethereum, USDC, and potentially more cryptocurrencies in the future.
WLD cryptocurrency token
Upon creating a World ID and downloading the World App, users gain access to the WLD cryptocurrency token. WLD was initially distributed to beta program participants, and a significant quantity was airdropped to users during the platform's official launch. WLD is listed on crypto exchanges like KuCoin and Binance.
According to the Worldcoin white paper, a total of 10 billion WLD will be issued over 15 years. Currently, 143 million WLD are in circulation, with 43 million allocated to verified World App users and 100 million sent to market makers to facilitate trading.
Criticisms of Worldcoin
Critics have raised several concerns about Worldcoin, citing its ambitious objectives and questionable practices.
Following its launch, Ethereum founder Vitalik Buterin voiced apprehensions about Worldcoin, suggesting that the platform's iris scans might collect more data than disclosed, or that someone could misuse iris scanning to verify if another person has a World ID.
An MIT Technology Review article from April 2022 accused Worldcoin of using deceptive marketing, collecting more personal data than disclosed, and failing to obtain informed consent.
Worldcoin responded to MIT Technology Review's criticisms with a 25-page rebuttal, emphasizing that it does not exploit or sell personal user data. The company stated that it is only interested in verifying a user's uniqueness, not their identity.
Critics have also criticized Worldcoin for heavily promoting its platform in developing countries, with a substantial number of new users coming from Asia and Africa. This has raised concerns about potential exploitation.
Moreover, in an early funding round in October 2021, Worldcoin received investment from Sam Bankman-Fried, the founder of the failed crypto exchange FTX, which has also drawn scrutiny.
