MC Explained| What is Sam Altman’s Worldcoin crypto project? How is it going to work?

OpenAI CEO and Worldcoin Co-founder Sam Altman

OpenAI chief Sam Altman has probably become the biggest newsmaker of the global technology industry in 2023 -- the latest being the launch of Worldcoin project on July 24, an AI to crypto network, built on the concept of ‘proof of personhood’ or verifying an individual’s digital identity.

The Worldcoin project is owned by a technology company called Tools for Humanity (TFH), founded by Altman, Alex Blania and Max Novendstern in 2019.

This announcement came at a time when crypto investors are riding high on Ripple’s recent partial victory in a court case against the US Securities and Exchange Commission (SEC) and investment firm Blackrock launching its Blackrock Bitcoin ETF, showing signs of the world starting to move over crypto exchange FTX’s collapse and aftershock.

Meanwhile, Twitter co-founder and a Bitcoin enthusiast, Jack Dorsey, took digs at Altman’s new project. “Visit the Orb or the Orb will visit you...” and ‘“Worldcoin is an attempt at global scale alignment..." cute’, he wrote on Twitter.

Here is all you need to know about Altman’s new AI + Crypto project.

What is Worldcoin crypto project?

The Worldcoin project ecosystem involves three key elements: World ID, Worldcoin token (WLD) and World App. World ID is a personalised biometric digital identity of the user, which the company claims is privacy preserving.

The Worldcoin token is a crypto token or a digital currency which will be initially distributed among users for free as they sign up, defining that they are unique humans, and the currency can be used for transactions and payments through a World-ID compatible app called World App. World App is a digital wallet, too.

This is happening through the Worldcoin protocol which completed its migration to OP Mainnet, a stable and scalable L2 blockchain built by Ethereum developers.

The company believes that “the Worldcoin protocol is intended to be the world’s largest, most inclusive identity and financial public utility and to be owned by everyone.”

Alex Blania, co-founder of Worldcoin project and CEO of TFH, said, “In the age of AI, the need for proof of personhood is no longer a topic of serious debate; instead, the critical question is whether or not the proof of personhood solutions we have can be privacy-first, decentralised and maximally inclusive.”

How does it work? Where can you find the ‘orb’?

The identity verification and profile creation will be done through a spherical hardware device called ‘Orb’, which creates a unique biometric identity of the user through eyeball scanning, which will be proof that the user is a real human and not a bot.

Worldcoin’s flagship device Orb and its services will be rolled out in 35 cities across 20 countries in the coming months. As of now, the services will be immediately available in Dubai, Hong Kong, London, Los Angeles, Mexico City, Miami, New York, Paris, San Francisco, São Paulo, Seoul, Singapore and Tokyo.

Users can also schedule an Orb visit through Worldcoin's website or check out the locations listed country-wise, where they can find an orb device to sign up. As per the website, there are currently 18 locations with the device in India, most prominently across Delhi-NCR and Bengaluru.

According to the company, the Worldcoin protocol’s decentralised identity and financial network was designed to unlock and equitably distribute the potentially massive economic implications of AI. If successful, the project will increase economic opportunity, enable global democratic processes and eventually provide a potential foundation for AI-funded universal basic income (UBI).

“It basically simplifies the KYC verification of the wallet, also confirming that you own it. There’s a similar offering in the Ethereum chain called ‘Soulbound tokens’. These too are mapped to the users, but there’s nobody who have developed an eye scan tapped on smart contract. Altman has found a sweet spot here,” Sidharth Sogani, founder and CEO of crypto research firm CREBACO Global, told Moneycontrol.

When did it start and how many users are there so far?

Though TFH started in 2019, the Worldcoin project went into beta testing phase around 18 months back. According to Altman, the beta phase saw 2 million sign-ups. Many of the users, during this limited testing, were offered free WLD tokens.

Worldcoin’s parent, TFH, found backers in Andreessen Horowitz’s crypto arm a16z, Bain Capital Crypto, Blockchain Capital and Distributed Global. FTX’s Sam Bankman-Fried and LinkedIn co-founder Reid Hoffman too were some its early investors. Worldcoin had last raised $115 million in a Series C round in May 2023.

Prior to this, in March 2022, it had raised $100 million at a valuation of $3 billion.

What were some of the criticisms levelled during beta testing?

The Worldcoin protocol too had its fair share of controversies questioning its credibility and security claims.

According to a TechCrunch report from May 2023, hackers were able to install password-stealing malware on the devices of Worldcoin Orb operators and got full access to the operator’s dashboard.

In another instance, according to an MIT Technology Review report from April 2022, Worldcoin got its first half a million test users by signing up and creating biometric profiles of unsuspecting poor people living in villages of certain developing countries, in exchange for money.

How credible is the token? What will this mean for users?

Currently, the project caps the total supply of WLD tokens to 10 million for the next 15 years. The company already holds about 20 percent of all its tokens. At the time of its global launch, only a maximum of 143 million tokens was made available in circulation.

“Assuming Altman has 2 million users on its network, coupling with its ChatGPT utility…he is leveraging his existing widely used technology, mapping it with his own utility tokens, that improves the acceptability of WLD tokens for other goods and services too,” Sogani said.