In today’s Finshots, we offer an extremely simplistic explanation on why everyone’s talking about Worldcoin.

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The Story

Imagine this — you walk into a room and see a shiny, chrome, metallic spherical ball placed on a table. The instructions are clear.

  1. Allow the sphere to scan your iris. Each person’s iris is unique. Just like your fingerprints are one of a kind.
  2. It’ll create a unique identification number for you. And then delete the nuances of what makes your iris unique. It’ll simply store the identification number. Or at least that’s what the sphere promises.
  3. In return for your trouble, you’ll be rewarded with money.

Does this sound like something out of an episode of Netflix’s Black Mirror?

Well, it isn’t. This is reality. And this sphere or ‘Orb’ is Sam Altman’s creation and promise. Yup, the same man who’s behind OpenAI’s revolutionary ChatGPT.

And the ‘Orb’ is everywhere as you read this — over 2 million people have signed up across 35 major cities including Berlin, Paris, Tokyo, and Nairobi. Even Bengaluru. People have been queuing up at the Mantri Mall here to get their irises scanned.

What’s really going on here, you ask?

Well, this folks is Worldcoin. Sure, it looks and sounds quite dystopian. But, it does have a very audacious and commendable goal — help people who lose jobs to AI.

Basically, Altman seems to be a tiny bit worried that his own exploits with OpenAI will lead to the destruction of existing jobs. He doesn’t want people’s incomes to disappear. He worries that the folks running AI will make money. The others won’t. Wealth and income inequality will grow by leaps and bounds. And no one wants that, right?

So maybe some form of universal basic income or UBI can fix that. Think of UBI as free money with no strings attached. You get paid for just living. For existing on the face of the earth. In this case, the tradeoff is giving someone else your iris. Not literally, of course.

But wait…why does Worldcoin even want to scan irises?

See, AI and robots are getting smarter by the minute. They can fool us into believing they’re human. Heck, GPT-4 even tricked a human to help it solve a CAPTCHA. You know, those ‘click boxes with trees’ kind of thing. It’s meant to weed out bots, but, AI found a workaround. So who knows what tricks they’ll soon have up their sleeve to convince us they’re human too?

So if you’re setting up a project for UBI, it seems like the number one priority is “Don’t pay money to robots!”. And that means getting humans to actually prove they’re human first. Or what they call ‘proof of humanity’ or ‘proof of person’.

Hmmm. We humans having to actually prove that we’re human does sound quite dystopian already.

Anyway, the next question then is what do humans have that robots can’t mimic? At least not yet. And remember we also need it to be unique to each human to ensure no problems with duplicate identities….

The answer to that is — fingerprints or irises.

So like the Aadhaar card uses our fingerprints for biometric verification, Worldcoin decided to rely on irises. Because they simply believe that modifying fingerprints is easy. A cut or two can derail the entire identification process. Also, as you get older, or depending on the hard labour you do, the ridges and valleys of the fingerprint can wear off. On the other hand, they claim that the structure of the iris is much more stable and hard to modify.

Well, let’s believe that for now.

So yeah, scan your iris and get a unique ID.

And who knows, if the project catches on, this could be a universal authentication method. In a way, maybe like how a Google authentication lets you sign in to different websites? Just that since this ID has already established who’s human, it might be able to clamp down on fake social media accounts and even negate chatbots and prevent scams.

But wait…what about the money and universal basic income? How does Worldcoin have so much money to dole out willy-nilly?

Okay, there’s one thing that we didn’t mention. Worldcoin isn’t actually giving out real money. Instead, you get a cryptocurrency. It has its own token called WLD. And when people signup, they get 25 tokens. Also, the website says after signup, ‘eligible verified users’ can claim “1 free WLD token per week”.

Now you can imagine that this is quite an easy thing to do for the company. Cryptocurrencies are basically something that’s magically whipped out of thin air. So Worldcoin can simply keep creating tokens over and over again. Sure, they’ve placed an upper limit of 10 billion tokens for now. But that can always change.

Now the thing is people still need WLD tokens to be valuable. That’s the only way they can work as ‘income’. And by now you know that cryptocurrencies don’t have any intrinsic value. It derives its value from the scarcity of tokens. And not to forget the story the creator of the token tells people. The more compelling the story, the higher the probability that people will want their hands on it. So if people believe Altman’s ambition can actually turn it into a digital World ID for all sorts of purposes, then that could drive its price higher.

Or if they believe the roadblocks are greater, then that could prove to be a problem for the token’s value.

For starters, there’s the privacy issue.

We’re basically trusting a private entity with our uniquely identifiable data. And sure Worldcoin says that it deletes everything immediately. That it just keeps an ID. And that even this ID is securely stored on the blockchain. But should people believe this blindly?

After all, the folks at the MIT Technology Review did a scathing breakdown of its numerous issues last year — including its deceptive marketing techniques to get people to get their iris scanned. Also, Techcrunch reported that the accounts of those ‘Orb’ operators had been hacked recently. We don’t know what data can be accessed on the Orb. Also, there are some experts who’ve posed another question — the Orb which scans irises is a physical device. It might be quite easy to tamper with if someone so desires. They might be able to create pathways to access data before its deleted. And then use it for their own gains. Might be possible, no?

But the bigger threat to Worldcoin’s ambitions are governments themselves.

Kenya has already stopped Worldcoin in its tracks. And Germany and France are investigating it. Everyone’s concerned about data privacy.

They might even be concerned about this whole UBI gimmick. That’s basically government territory. They’re the ones responsible for social welfare. Not some private organization that’s collecting biometric data of their citizens and operates in a regulatory grey area. Not to forget that countries like India don’t like cryptocurrencies in the least bit.

Why would governments encourage another Silicon Valley-type tech company that’s a bit of a privacy gamble as well as a cryptocurrency bet?

So yeah, Worldcoin's proposition might be alluring — “Every human is eligible for a share of WLD simply for being human." But maybe think about it for a second before you go rushing to sign away your iris.

Until then…

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