Worldcoin and its impact on the crypto industry
By Vikram Subburaj
All the crypto world turned its discerning gaze on Open AI founder Sam Altman’s Worldcoin (token WLD) as he unveiled the ‘world’s largest identity and financial network’ in July. Today, we analyse the concept, its advantages and some concerns that go with it.
Introduction to Worldcoin
The underlying concept of Worldcoin chimes with the philosophy of ‘technology for altruism’ wherein the project aims to create a digital network for everyone to claim some kind of stake and, importantly, join the digital economy.
The process involves the use of a unique device called the ‘Orb,’ operated by Worldcoin volunteers known as ‘Orb operators.’ Using the Orb, individuals’ biometric data, specifically their iris patterns, are scanned to generate a secure and verifiable World ID through the World app. The Worldcoin blog says the iris data is deleted once the ‘unique iris code’ is generated, unless otherwise opted by the users.
The timing of the Worldcoin project can only be termed impeccable. The Worldcoin craft has landed bang on target and at the right place when the AI is rapidly achieving human capabilities. Worldcoin fundamentally aims to distinguish humans from AI-enabled bots and futuristic applications with the iris codes and IDs.
Use cases in the Indian context
Worldcoin holds a lot of potential globally, and in particular, India. The project plans to achieve universal basic income (UBI) to everyone irrespective of their income, place, or age; enable better governance; and facilitate uncollateralised lending. These are among the objectives of the Indian government as well. One of Worldcoin’s blogs, in fact, says that India has proven the effectiveness of the biometric system by implementing Aadhaar that ‘deduplicates enrolments in social welfare programmes.’
The iris scans aim to create ‘proof of personhood’ (PoP). The company said PoP could enable the equitable distribution of subsidies and resources (without the middlemen). The company says this could be crucial in developing economies to prevent resource capture — defined as the use of fake identities to amass more than one’s fair share of resources.
Another aspect that is being pointed out is that the weary Indian customer, already juggling with passwords and physical licensing processes, will quickly take to the biometric integration of Worldcoin as it saves them a lot of hassle by eliminating the need for complex passwords or even private keys.
Privacy and regulatory concerns plague its immediate adoption
Altman’s Worldcoin project does not come free of challenges. It has been under the scanner since late last year due to concerns over its processing of sensitive biometrics and potential privacy leaks. Some sections have also been sceptical of data access and misuse by governments and the risk of eroding internet anonymity.
Kenya, a key market for the platform, has already suspended its operations to ensure enough diligence is applied before it can restart. Britain’s data regulator (Information Commissioner Office) has said it will examine Worldcoin. Key crypto influencers like Ethereum founder Vitalik Buterin and crypto inquirer ZachXBT have also raised concerns over privacy and the project’s tokenomics.
The eye-scanning Orb already has people queuing up in places like Bengaluru in exchange for WLD digital tokens. Token value worth nearly $50 each is transferred on successful completion of the exercise.
Impact on the ecosystem
In the present scenario, any new and ambitious crypto project will energise the whole system and drive players towards improving products and services.
However, the success (or failure) of the project will depend on it scaling the ambitious technology and trust challenges that it faces. Also, the implications of regulator action in various countries are yet to be seen. User interest and quick adoption are positive signs to count on till then.
Worldcoin is giving us a roadmap for private data collection that is stored in the blockchain – governments can potentially use such a structure to enable mass adoption of their digital strategies. Such initiatives will benefit the end-user eventually.
The author is CEO, Giottus, a crypto platform
