The debut of Worldcoin has generated a new debate about the future of decentralized identification, artificial intelligence, and whether iris scanning is the only way ahead.
After three years of development, the contentious digital ID crypto project Worldcoin debuted on July 24.
Sam Altman, the CEO of OpenAI, the firm behind the popular artificial intelligence (AI)-based chatbot ChatGPT, co-founded the project.
Worldcoin made news shortly after its June 2021 launch, promising to develop a futuristic digital identity system by scanning people’s eyes.
According to Worldcoin, as AI technology progresses, it will become increasingly impossible to distinguish between humans and bots online. To distinguish humans from AI, it developed a digital ID system based on “proof of personhood.” This digital ID will be created by scanning a person’s iris and assigning them a “World ID.”
According to the company, all biometric data will be maintained on a decentralized blockchain, and the initiative will not save any personal information. It provides a zero-knowledge proof to validate the user’s identity without revealing the data necessary to generate the proof.
Despite the lingering controversy around its introduction, Worldcoin obtained $115 million in investment in May and amassed over 2 million signups before its formal public launch.
Worldcoin ecosystem
Worldcoin combines World ID and the Worldcoin (WLD) token – two critical ecosystem components.
The former is a privacy-focused digital identity that supports people in confirming their identity and uniqueness online while safeguarding their anonymity. To obtain a World ID, individuals must undergo biometric verification using a “Orb.” Individuals are issued a unique World ID and, if legal, WLD tokens after completing this authentication.
The World App, which works as a wallet and provides decentralized banking services, is also part of the digital ID ecosystem. The app also stores the user’s unique World ID, which is generated through an iris scan. According to the business, the software can authenticate users on any third-party application.
Using an Orb, users can scan their iris at authorized sites. A user receives 25 WLD tokens after scanning their irish. Several major cryptocurrency exchanges, including Binance, Bybit, OKX, Gate.io, and Huobi, have already listed the coin.
“Crypto natives will struggle to get behind a project whose core values are the antithesis of everything they stand for, while ‘nocoiners’ would require significant education on the project’s benefits if they are expected to support the project.”
According to Nick Dazé, CEO of Heirloom, a Web3 platform that verifies credentials and personhood, Worldcoin is highly exciting, however the execution is lacking:
“The project is dangerous unless the creator of this identity is given complete ownership and control over the identity in an immutable manner.” When data is decentralized, advanced hacks may be discouraged since the benefit for the hacker is more difficult to explain. A big ‘honey trap’ with thousands or millions of IDs, on the other hand, is an excellent target for expensive, professional, possibly state-sponsored hacking operations.”
Criticism over data privacy
Privacy activists, cybersecurity experts, and cryptocurrency aficionados have all criticized the proposal. Vitalik Buterin, co-founder of Ethereum, was among the first to react to the launch, citing concerns about the technique utilized to generate World IDs. Buterin stated that someone could scan another person’s iris to see if they had a World ID.
According to MIT Technology Review, Worldcoin engaged in “deceptive marketing practices, collected more personal data than it acknowledged, and failed to obtain meaningful informed consent.” They also stated that a significant portion of its initial signups came from poorer countries in Asia and Africa, where data and privacy rules are less stringent.
“From the beginning, Worldcoin was intended to protect individual privacy.” The project has adopted a privacy-centric design and established a strong privacy program, including a thorough data protection impact assessment and prompt responses to individual requests to erase their personal data.
Where is Worldcoin launching?
New signups for the project began on July 24 and it has now been officially launched in 35 locations across 20 countries. Although the project received more than 2 million signups, early reports suggested that the response to its introduction was underwhelming.
In the first few days, Hong Kong had the biggest number of signups among 20 nations, making up roughly half of all signups. However, the three locations in Hong Kong received an average of roughly 200 signups, bringing the total on the first day to about 1000 signups—a rather low amount when compared to the pre-release signups.
WLD is not being introduced by Worldcoin in the US, and according to its terms of service, it is “not intended to be available for use, purchase, or access” by citizens of the US.
“In addition to the United States, the initiative might run into regulatory issues with the European Union. The EU has some of the harshest data protection standards in the world, notwithstanding the company’s assertions that it complies with the General Data Protection Regulation. The creation of a biometric database is fundamental to Worldcoin’s functioning. As a result, they will probably have trouble following these laws. Because of their impending data protection bill, even nations like India, where Worldcoin has already begun operating, would be interested in looking into Worldcoin, Sheikh claimed.
The United Kingdom’s data regulatory authority announced that it is looking into Worldcoin, and the French privacy watchdog has expressed concern about the project’s data collecting practices.
It will be vital for regulators to stay up with the changes and develop flexible frameworks to safeguard user privacy and security as AI and the purported answers to the problems it has generated emerge.
