Scan Your Eyeballs for $50!
Is Worldcoin a panacea for authentication or a harbinger of dystopia?
Sam Altman, the CEO of OpenAI, has been in the headlines a lot over the last few years thanks to his success in Silicon Valley. The tech billionaire certainly has some eccentric ideas, and although he purports to be very conscious and aware of the risks associated with AI, robotics, data, and the confluence of these sectors working together, one can’t but help feel that he takes a somewhat cavalier attitude regarding the risks to wider society. In addition to his business ventures, Altman has been readily preparing for the apocalypse, which he believes could well be triggered by AI (his largest business interest).
“I have guns, gold, potassium iodide, antibiotics, batteries, water, gas masks from the Israeli Defense Force, and a big patch of land in Big Sur I can fly to.” — Sam Altman
Now that Worldcoin has launched, he is in the news once more.
Worldcoin (WLD) is by far the most controversial crypto project to have launched this year, given that it requires users of the currency to scan their eyeballs with strange metallic orbs.
The authentication problem Worldcoin is trying to solve
As we move into a more digitalised world, it makes sense that 20th century forms of identification may become obsoleted. Physical forms of identification such as driving licenses and passports can be tampered with, and centralised bodies for managing these can be corrupted and infiltrated.
Vitalik has written extensively on his blog about the importance of being able to prove that people are who they say they are. AML/KYC regulations are a keen interest of governments, and in the future in may become increasingly important to demonstrate what he calls “proof of personhood”.
Another of Altman’s concerns about AI is that it will lead to an extreme concentration of wealth, and that Universal Basic Income (UBI) may be the best way to remedy this. As such, the long term goal for Worldcoin is to ensure that UBI can be processed and sent directly to all verified humans on the platform. It isn’t yet clear who would fund this UBI and whether it could even work in practice.
Of course, there are interesting avenues to explore in terms of governance if the project were to succeed, and there are many reasons to think that establishing authentication of personhood in this way could help to ameliorate risks such as voter fraud.
Worldcoin has now onboarded 2m people (4m eyes)
Those who choose to scan their eyes with big metal orbs are entitled to claim $50 worth of WLD, unless they are in the United States.
Thus far, the team at Worldcoin have been extremely successful at onboarding new users, and crossed the 2m mark within half the time that it took them to collate the first million users.
The team at Worldcoin hope to make WLD the most widely distributed cryptocurrency in the world, and enticing people with freemiums at $50 a pop is their modus operandi.
The hand-picked bunch of “orb operators” that oversee the process are also incentivised to sign on as many people as possible, earning commissions of $1-$5 for each person that looks into the orb.
The tokenomics have raised more eyebrows
There are many who take the view that Worldcoin doesn’t solve all of the aforementioned problems, and also isn’t necessarily a harbinger of dystopia.
After WLD finally launched as an ERC20 token on Ethereum, the team decided to release the project’s tokenomics. This isn’t a typical order of events, and it certainly isn’t typical for white papers and tokenomics to be geo-fenced, as was reported by Coindesk.
Those who are interested in speculating on the venture may find themselves short-changed: rather than a decentralised utopia for a new financial age, Worldcoin’s current distribution appears more akin to the likes of MAPS, OXY and FTT. With only 1.4% of the total supply circulating, there is currently a fully diluted market cap of over $20 billion, an extraordinary feat for a brand new project that nobody uses and with questionable future utility.
The above screenshot from the Worldcoin website may be confusing for some who read it: surely a “public utility” cannot be so centralised? All smart contracts are to be controlled by a 4/6 multi sig, which completely flies in the face of their “decentralised” mission statement. The extent of their decentralisation thus appears to relate solely to their use of Ethereum, Optimism, and the “commitment” to decentralise governance in the future.
As demonstrated in the picture below, 75% of the initial 10 billion WLD will be designated for “the community”. This can come in the form of those who claim by using the orbs, as well as ecosystem incentives for LP provision etc. 13.5% will be reserved for early investors from Tools For Humanity (just like all public utilities hmm?), 9.8% is to be allocated for the initial development team and an additional 1.7% is reserved to address TFH’s future needs.
Queuing up for hours in Nairobi for $50 may seem like a good idea, but far less so when you discover that community incentives will be released over the course of 15 years. This isn’t a gradual process: with the circulating supply increasing from 140 million to over a billion within the first year.
Once these 15 years have elapsed, Worldcoin state that WLD can “begin” to inflate at a rate of 1.5% per year.
It is even less exciting when you come to realise that after three years, the TFH investors, their 1.7% reserve, and the initial development team will have completed their vesting schedules after only three years.
Kenya suspends Worldcoin
Thus far, Worldcoin has established locations where individuals can scan their eyes in 35 different cities across 20 different countries including London, Paris and New York.
One of the most popular locations for scanning irises has been in Nairobi, where over 350,000 people have already signed up. By all means, Kenya appeared to be one of the keenest countries to participate, but the Kenyan government has now stepped in to prevent any more users from being signed up to the platform.
The Kenyan government cited concerns regarding the ethics of paying for biometric data, the way in which the data would be stored, and the Ministry of the Interior has since stopped Worldcoin from onboarding new users in the country. For some reason, management at Worldcoin issued a statement that they had stopped onboarding new users thanks to “crowd control concerns”, which is patently untrue — everyone knows the real reason is because the government has put a halt to it.
How will the data be stored?
One of the most important questions for a company such as this is the question of how they are storing their data. This is extremely important, given that the specificity of the biometric data being stored within the hands of a private company could be used to expand surveillance powers or to target particular demographics.
Although it was once the case that all information was sent to TFH by default, participants now have the option to “opt out” (if you believe them — the software isn’t open sourced).
A German watchdog is currently investigating Worldcoin since the company is attempting to “process sensitive data at a very large scale”.
France’s watchdog has started to make similar noises, by stating that the legality of Worldcoin’s data collection processes “seems questionable.”
According to the Worldcoin website:
“Your biometric data is first processed locally on the Orb and then permanently deleted. The only data that remains is your iris code. This iris code is a set of numbers generated by the Orb and is not linked to your wallet or any of your personal information.”
It also stresses that one doesn’t necessarily need to scan their irises to participate in the Worldcoin platform, but that without doing so they won’t receive a World ID or their free share of WLD.
Do we need a DDID?
A Decentralised Digital ID (DDID) is certainly preferable to one that in centralised databases, which have developed an unusual knack for being repeatedly hacked and leaked. There is no way to overstate this: centralised databases are hacked all the time. Forcing people to use such databases is therefore akin to forcing them to expose themselves to any and all hackers that may have an interest in one’s bank details, medical history, browser history, etc. In July alone, over 100m records (names, usernames, gender, email addresses and IP addresses) were leaked from the platform Tigo, the TIAA suffered a hack in which 2.6m records (names and social security numbers) were leaked and 34 million Indonesians had their passport data leaked (full names, genders, passport numbers, dates of issue, expiry dates, dates of birth) — this info can now be purchased on the deep web for just $10k.
The problem of authentication is a very real one, but it isn’t obvious to me that proving someone’s humanity by financing disingenuous third parties is the way to achieve it.
There are plenty of alternatives that can be used for digital identification that don’t require concentrating power in a small number of hands. Whilst not so holistic as to be able to prove one’s humanity, ENS serves the world of Web3 well in terms of establishing an identity for those who want to do so. There is a cost to do this, which disenfranchises bots, and individuals have full custody.
Some will make the case that there is no need for these forms of identification at all. Before 1915, for example, there was no requirement whatsoever for British citizens to own a passport in order to travel abroad. The psyche of the zeitgeist has now evolved significantly to the point where people can hardly imagine a world in which they aren’t constantly labeled and logged, such that the debate is now focused on how to implement these measures rather than why.
Unfortunately, most people just don’t give a shit about privacy, autonomy, or self-sovereignty, and couldn’t give a jot about how easy it is to corral and manipulate their offspring. Everything from face ID, CCTV, tracking software, psychologically mapping individuals based on online interactions, to the likes of 23andMe makes it nearly impossible for the modern day individual to keep their data safe and private thanks to the plethora of data that is stored ineffectively. It may be too late for society to row back enough on this even if it wanted to, and it doesn’t seem to want to: countries such as Iceland pride themselves on having already established comprehensive DNA databases for their citizens.
The most ludicrous of the proclamations made by the team at Worldcoin is that “In the long-run, the WLD token may also be treated as a global store of value”. This is obviously laughable. I don’t make a lot of predictions but given the tokenomics (and particularly the vesting schedules) I find it extremely improbable that Worldcoin achieves its proclaimed mission. Of course, it might achieve its actual mission; a cash grab now seems completely inevitable.
Interesting reading on this: What do I think about biometric proof of personhood?
Excellent food for thought
Another amazing article, McNeill!
You never fail when it comes to clarity and quality.
Please keep posting!