What is Worldcoin and what does it mean for our privacy?

Ricardo Macieira, regional manager, Europe stands to simulate the iris scan near the biometric imaging device, the Orb of the identity and financial public utility Worldcoin, to create a World ID digital passport, being able to trade in cryptocurrency issued, in Berlin, Germany
explainer

Ricardo Macieira, regional manager, Europe stands to simulate the iris scan near the biometric imaging device, the Orb of the identity and financial public utility Worldcoin, to create a World ID digital passport, being able to trade in cryptocurrency issued, in Berlin, Germany August 1, 2023. REUTERS/Annegret Hilse

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OpenAI chief executive Sam Altman on Monday launched Worldcoin, a cryptocurrency project that distributes a crypto token, the WLD, to people "just for being a unique individual".

By issuing crypto tokens in return for biometric data, the project aims to work both as a global universal basic income and an authentication system to distinguish between humans and robots.

Since the project's beta phase, it has gained 2 million users. With the launch, Worldcoin is expanding its "orbing" operations to 35 cities in 20 countries.

Those who register in specific countries will receive the WLD cryptocurrency token from Worldcoin as an incentive.

As crypto winter shows signs of thawing, "Worldcoin is an attempt at global scale alignment, the journey will be challenging and the outcome is uncertain," Sam Altman and co-founder Alex Blania said in a roll-out announcement.

But it has drawn criticism from tech experts over perceived privacy risks.

Here's what you need to know about Worldcoin:

What is Worldcoin?

As a digital currency, Worldcoin will function differently to market leaders bitcoin or ethereum by offering people a token of the future currency without requiring that they invest any funds.

Co-founders Altman and Alex Blania want the currency to act as a form of universal basic income that would allow more equitable access to the global economy.

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To receive a token, people who sign up to Worldcoin must have their irises scanned through an orb-shaped device – a way of ensuring that anyone who signs up is human and only signs up once.

"Worldcoin is mostly trying to innovate on the authentication side," said Jeremy Clark from the Canada-based Concordia Institute for Information Systems Engineering.

Anyone can use cryptocurrencies such as bitcoin, Clark explained, signing up with as many identities as they want, but Worldcoin is "trying to get one and only one (address) to basically everyone on the planet."

According to the Worldcoin website, the only data the orb stores is an "IrisHash", a set of numbers generated to identify the individual. The orb does not store any biometric data.

"Images collected by the Orb are promptly deleted unless explicitly requested by the person signing up," a Worldcoin spokesperson told Context in emailed comments.

Once the individual receives their unique IrisHash and their crypto wallet, they receive a "World ID", or digital passport.

From Afghanistan to Britain, biometrics and digital IDs are increasingly used to allow people to vote and access basic services like healthcare and food banks.

Worldcoin has done orb testing in countries including Sudan, Chile and Indonesia, and says its World App will be available in more than 80 countries.

How has the project been received?

Altman and OpenAI, the startup behind ChatGPT, have been in the spotlight since late last year, with interest in artificial intelligence growing by leaps and bounds.

Worldcoin has attracted investment from some of Silicon Valley's biggest venture capital firms, including Andreessen Horowitz and Blockchain Capital.

After initially criticising the project, Blockchain Capital's Spencer Bogart said it offers "the most compelling solution" to sybil attacks – where a hacker creates multiple identities to take over an online network.

The company's website describes Worldcoin as an ethereum-based "new, collectively owned global currency that will be distributed fairly to as many people as possible".

But tech experts say that the currency is no different from other crypto coins in its volatility.

"There's nothing to say that any company is going to accept this for payment or that you can do anything with it," said Peter Howson, a crypto expert from Britain's Northumbria University.

What does it mean for users' privacy?

Worldcoin has drawn criticism over its handling of biometric data.

In response to Altman's tweet introducing the project in 2021, former U.S. intelligence contractor Edward Snowden tweeted, "Don't catalogue eyeballs".

An investigation by MIT Technology Review raised concerns over Worldcoin's method of collecting biometric data from developing countries, such as Indonesia, Kenya and Colombia during the testing of the project.

The investigation found that the company used "deceptive marketing practices, collected more personal data than it acknowledged, and failed to obtain meaningful informed consent" from users.

Molly White, a crypto researcher who runs the website Web3 is Going Just Great, told Context that testing is "emblematic of a practice in the tech industry to experiment on communities that don't have as much agency and might be more easily coerced into engaging in the project."

For Howson, "it's a considerable amount of data the prospective user has to give up ... When that (data) goes missing, it causes problems forever."

According to a Gizmodo report, people in China have been buying iris scans on the black market to access the Worldcoin beta network, which provides KYC verifications for the World App.

To ensure users' privacy, Worldcoin says that once its systems are optimised, it will anonymize and destroy users' biometric data.

Even though it has recorded and stored thousands of iris scans to train its algorithms, the company has yet to provide a deadline for deleting data.

"The only personal data that leaves the Orb is a message containing a numerical representation of the most important features of the image, the iris code, to validate uniqueness," said the Worldcoin spokesperson.

This article was updated on Monday July 24, 2023 at 11:19 GMT to reflect the launch of Worldcoin.

(Reporting by Axelle Rescourio and Beatrice Tridimas. Editing by Zoe Tabary)


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Tags

  • Consumer protection
  • Digital IDs
  • Cryptocurrency
  • AI
  • Digital Divides
  • Economic inclusion

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