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What is WorldCoin and How does it work?
By Laxmikant Khanvilkar
Sam Altman, the man behind OpenAI’s revolutionary Artificial Intelligence product Chat GPT, has floated the idea of Worldcoin which promotes minimum income or a mean to universal basic income, i.e., a guaranteed set income for those who sign up, regardless of their other incomes, and create a novel global financial network.
Another important agenda behind the Worldcoin is to usher in netizens’ “proof of personhood.”
Tools for Humanity, the San Francisco and Berlin-based non-governmental organization (NGO) founded in 2019 by Sam Altman, Max Novendstern, and Alex Blania, have developed the Worldcoin – an iris biometric cryptocurrency project. It is also backed by the virtual capital Andreessen Horowitz.
Within one week of the launch i.e. July 24th, 2003, the project has claimed to sign up over 2 million users worldwide.
Worldcoin scans iris by using sphere or ‘Orb’ to generate World ID. The reason for insisting on iris is, by being unique, it will essentially help protect individual identity.
There are several cryptocurrencies already in existence. Let’s understand the differentiating factors between Worldcoin and other cryptocurrencies.
The single largest differentiating factor we have already discussed is: the iris scanning or the use of biometrics. However, this has not gone down well with certain countries such as France, Germany, and Kenya.
The need to scan irises:
Artificial Intelligence based tools have emerged as a threat since it can manipulate technology. For instance GPT-4 tricked a human to help it solve a CAPTCHA.
As we know the Worldcoin protocol is intended to be the world’s largest identity and financial public network, open to everyone regardless of their country, background, or economic status. Its basic aim is to support humans and not to pay money to robots. With the help of fingerprints or iris, the project can establish that the receiver of benefits is a human and not a machine.
The project with three aspects:
A World ID or a digital identity for “proving an individual’s unique personhood,” a Worldcoin token (WLD) that is its cryptocurrency, and a World App that enables “payment, purchases and transfers globally using digital assets and traditional currencies.” It says that creating a World ID (through the orb scanning) is not essential for accessing the app or tokens. But it provides certain incentives for doing so.
The data collections and privacy concerns:
As per WorldCoin website, the images collected by the Orb are “promptly deleted unless explicitly requested by the person signing up”. It adds that in its place, a message containing a numerical representation of the most important features of the image captured remains, to create a unique individual code.
Germany, Kenya, other regulators have raised concerns over Worldcoin collecting personal information. Britain’s data regulator has said it will make enquiries into the project. France’s privacy watchdog also said that the legality of the project’s biometric data collection “seems questionable”.
However, Worldcoin has maintained that it is “designed to protect individual privacy and has built a robust privacy program” and is committed to ensuring it meets regulatory requirements.
Worldcoin: Tokenomics
The token (WLD) is intended to be a larger effort to drive a more unified and equitable global economy driven by the internet economy. The token will be a Layer 2 Ethereum-based cryptocurrency that leverages the security of the Ethereum blockchain while having its own economy.
In October 2021, the project raised an initial $25 million. Within six months, an additional $100 million was raised pushing the token’s value up to $3 billion.
Using a distribution mechanism for its cryptocurrency like Universal Basic Income (UBI), Worldcoin attempts to incentivize users to join its network by getting their iris scanned using Worldcoin’s orb-shaped iris scanner.
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