What is Worldcoin (WLD)? A Deep Dive into the Universal Basic Income and Digital Identity Project

What is Worldcoin (WLD)?

The world of cryptocurrency has long since moved beyond being a domain solely focused on financial transactions. Today, blockchain technology and crypto assets form the foundation of ambitious projects that aim to revolutionize everything from digital identity to financial inclusion, and even global economic models. Of these, perhaps one of the most audacious and controversial is Worldcoin (WLD).

Worldcoin, developed by Tools for Humanity, a company co-founded by OpenAI’s Sam Altman, is an ambitious project that merges the concepts of digital identity and Universal Basic Income (UBI). Worldcoin’s objective is to create a unique digital identity for every person and distribute WLD, its native cryptocurrency, to them via this identity.

The Core Philosophy of Worldcoin: Identity and Equality

The fundamental philosophy behind Worldcoin is to financially empower people and enable them to establish a genuine identity in the digital world, especially in a future where artificial intelligence and automation are advancing at a rapid pace. The project advocates for humanity to be considered a shared asset, and for everyone to benefit fairly from the economic advantages that this shared status brings. This vision has two main components:

1. World ID: A Unique Digital Identity: Worldcoin aims to create an identity system that allows each person to exist only once in the digital realm. This identity is verified through a “proof of personhood” called World ID, which is created using the user’s biometric data (an iris scan). This prevents individuals from creating multiple accounts and abusing the system, addressing the significant issue of “singularity” in a digital world rife with bots and fake accounts.
2. WLD: Cryptocurrency for Universal Basic Income: The second pillar of the project is the WLD token. Worldcoin aims to provide a form of UBI by regularly distributing WLD tokens to everyone who creates a World ID. This has the potential to offer a basic financial safety net to people in a future where widespread automation and AI could lead to increased job displacement. The project’s founders believe that the wealth generated by AI should be shared by all of humanity.

How Worldcoin Works: The Orb and the Verification Process

The Worldcoin verification process is one of the project’s most distinctive and controversial aspects. It is carried out using a specialized hardware device called the Orb.

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• What is the Orb?: The Orb is a spherical biometric scanning device equipped with a high-resolution camera system. This device scans the user’s iris to generate a unique digital identity.
• The Verification Process: When a user wants to create their World ID, they visit an Orb operator to have their iris scanned. This scan generates a unique code (hash) from the user’s iris. It’s important to note that the Worldcoin project claims it does not store the user’s original iris image or personal data. Instead, it stores only the irreversibly generated hash code that verifies the user’s identity.
• Privacy and Security: Worldcoin states that it uses advanced cryptographic techniques, such as zero-knowledge proofs, to make this process transparent and secure. However, the collection and processing of biometric data remain one of the most criticized and debated aspects of the project. The aggregation of biometric data from millions of people globally poses significant potential security and privacy risks.

WLD Tokenomics and Use Cases

WLD is the native cryptocurrency of the Worldcoin ecosystem and operates as an ERC-20 token on the Polygon and Optimism networks.

• Distribution Model: WLD tokens are distributed for free to users who verify their World ID. This indicates that the token is not a primary source of revenue for the project but rather a distribution mechanism.
• Token Usage: WLD could be used for various purposes within the ecosystem. Theoretically, WLD holders will have the right to vote on the future of the protocol. Furthermore, WLD could function as a means of payment for digital services, tipping, or access to future decentralized applications (dApps). The project’s vision is for WLD to become a global universal basic income and value transfer instrument.

Worldcoin’s Potential and Risks

Worldcoin is a project that holds both immense potential and serious risks.

Potential Benefits:

• Financial Inclusion: It could provide access to financial systems for billions of people worldwide who are currently unbanked.
• Fraud Prevention: World ID could help prevent fraud in digital services (social media, e-commerce, voting systems) where bots and fake accounts are prevalent.
• A New Economic Model: It offers an innovative approach to solving the issue of job displacement in the age of AI, testing the feasibility of UBI on a global scale.
• Decentralized Identity: Storing identity data on the blockchain rather than with a central authority could give users more control over their identity.

Potential Risks and Controversial Aspects:

• Privacy Concerns: The collection and processing of biometric data is one of the biggest concerns. In the event of a data breach, this data is irreversible, posing severe risks.
• Centralization Criticism: The manufacturing and distribution of Orb devices have led to criticism that the project is not entirely decentralized. Furthermore, Tools for Humanity, the company behind Worldcoin, could have a major influence on the project’s direction.
• Financial Inequality: It is uncertain whether the project will work fairly and if the token distribution will truly be egalitarian. Given the volatility of WLD tokens, they may be difficult to use as a reliable form of UBI.
• User Adoption: It remains a question mark how willing millions of people globally will be to entrust their identities to a crypto project. Data security awareness may be low, especially in developing countries, making it even harder for users to protect their sensitive data.

The Future of Worldcoin

Worldcoin (WLD) is one of the most audacious and controversial projects in the cryptocurrency world. On one hand, it has the potential to offer innovative solutions to digital identity and financial inclusion problems, while on the other, it brings with it serious concerns about biometric data collection and centralization.

The project’s success will depend not only on the robustness of its technological infrastructure but also on its ability to earn the trust of users globally and address the concerns of regulatory authorities. Worldcoin is an experiment with a high degree of both risk and potential, aiming to shape the future of humanity in the age of AI. Following this experiment closely is vital to understanding where the crypto world is heading.