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IF Insights: Worldcoin, ‘proof of personhood’ and the privacy debate

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American tech magnate and Open AI CEO Sam Altman has now introduced the cryptocurrency project Worldcoin.

At the heart of Worldcoin, lies the entity called ‘World ID’, which is basically a “digital passport” designed to establish the authenticity of its holder as a genuine human, rather than an AI bot.

To obtain a World ID, individuals must undergo an in-person iris scan using a unique silver ball-lookalike device called the ‘orb.’ The device will conduct an iris scan to verify the person’s human identity, before generating his/her exclusive World ID.

Some 143 million Worldcoins were released during the launch event. Out of these, 100 million were given to market makers as a loan, and the rest were distributed to investors who had verified their identity using the Orb technology.

The ‘World ID’ will be giving the Worldcoin holders the “proof of personhood” in the crypto market. Worldcoin has a limit of 10 billion tokens that will ever be created, as per the reports.

However, Worldcoin is now facing potential scrutiny from Britain’s data regulator.

Entering The ‘Worldcoin’ Universe

While Worldcoin launched with two million users from its trial phase, the crypto project scaled up eyeball-scanning operations in 20 countries, including at sites in London. The brain behind Worldcoin is an organisation known as ‘Tools for Humanity’.

Early adopters in select countries will be rewarded with Worldcoin’s cryptocurrency token, WLD, the price of which has experienced remarkable growth, since the former’s inception.

On July 24, the WLD token, while trading on the world’s largest cryptocurrency exchange, Binance, peaked at USD 5.29, before settling to USD 2.49. WLD’s cumulative trading volume reached the USD 25.1 million mark.

Tools for Humanity’s Co-founder and CEO Alex Blania told Reuters that these World IDs will be the ‘effective differentiator’ between real individuals and AI bots in the crypto world.

Sam Altman sees Worldcoin’s features as the basis for a secure and reliable identity verification system, apart from creating a future where AI will be harnessed to create a more equitable and inclusive society.

While Sam Altman is entitled to have a positive opinion about the ‘World ID’, the ‘Worldcoin Project’ is also raising concerns.

What’s The Deal?

Crypto coin Ethereum co-founder Vitalik Buterin, while discussing the technicalities of the ‘proof of personhood’ blockchain protocols, spoke about the privacy and security concerns around the Orb and other issues with its WLD tokens.

Buterin’s essay, shared from his Twitter handle, outlined major risks with Worldcoin’s approach to ‘proof of personhood’.

“At the very least, if someone else scans your iris, they can check it against the database to determine whether or not you have a World ID. Potentially, iris scans might reveal more information,” the Ethereum co-founder stated.

Buterin also said that the Orb does not give its users a way to verify whether the tool is built properly.

“Hence, even if the software layer is perfect and fully decentralized, the Worldcoin Foundation still has the ability to insert a backdoor into the system, letting it create arbitrarily many fake human identities,” he remarked further.

Buterin also spoke about Worldcoin’s vulnerability to scenarios like ‘mobile device hacks’ or ‘social engineering schemes.’

“Users could be coerced into scanning their irises while showing a public key that belongs to someone else, and there is the possibility of 3D-printing ‘fake people’ that can pass the iris scan and get World IDs,” he stated further.

“If even one group does this, they can generate an unlimited number of identities,” the legendary computer programmer remarked, while raising the risks around the possible World ID sales in exchange for money.

Buterin also talked about countries forcing citizens to get verified while showing a QR code belonging to the governments.

Freedom of the Press Foundation President and whistleblower Edward Snowden too criticized Worldcoin, stating that the project simply just stores a global database of people’s iris scans, disregarding the “potential consequences”.

‘Tools for Humanity’ has already built up a database of hundreds of thousands of iris scans in almost two dozen countries. However, BuzzFeed came up with a report, where it claimed to interview a number of Worldcoin ‘orb’ operators, apart from accessing confidential company presentations, Orb operator contracts, internal marketing materials and over 100 screenshots of discussions between Orb operators and Worldcoin executives.

The materials contained evidence that “hundreds of outraged messages” have been sent to Orb operators from people “demanding the money they were promised.”

Two operators were also quoted by the report as claiming that the “system could be gamed” by executing more than one signup per person. One even stated that they had “repeatedly scanned around 20 of their friends one night to boost their sign-ups.”

A 2022 study from MIT Technology Review also discussed that the company representatives were “using deceptive marketing practices” in collecting more personal data than it was willing to admit and “failed to obtain meaningful informed consent” as per Europe’s global privacy framework GDPR.

Chinese blockchain outlet Blockbeat also reported about fraudsters offering iris scans from Know Your Customer (KYC) merchants in Cambodia for less than USD 30. Another Techcrunch article claimed that hackers were able to install password-collecting malware onto the biometric devices of WorldCoin operators.

The Final Verdict

Worldcoin claims that its Orb devices create a hash of the irises which checks it against a central database to ensure there are no human duplicates, while keeping users’ privacy and data security its top priority. Images taken by the orb also get deleted once the “iris code” is created, the venture stated, apart from pointing out that the business was fully compliant with GDPR regulations.

However, we have pioneers like Vitalik Buterin and Edward Snowden pointing out red flags around the ‘World ID’ system, which can’t be dismissed as wild imaginations. How the Tools for Humanity leadership deals with these concern areas will decide its business prospects in the coming days.

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