Worldcoin (WLD) is one of the most highly discussed cryptocurrencies in 2024. There were several reasons for attention, including an investigation by Hong Kong authorities and reaching 1 million active users. Learn more about Worldcoin and the pitfalls its investors may face.
What is Worldcoin
Worldcoin is an identity protocol. The project was founded in 2019. The worldcoin protocol itself was launched in July 2023.
Developers are creating a biometric database that includes scans of the iris. Every “cast” is unique. It can be used for quick verification of an identity. The system simply compares the scan of the eye shell with the “cast” that was previously loaded into the database.
The platform assigns a unique identifier—World ID—to the person who has passed the biometrics test. In December 2023, the company presented its improved version, World ID 2.0.
Important! Worldcoin does not collect names, dates of birth, or other sensitive information. The company only collects “casts” of the eye shell.
Tools for Humanity is responsible for the development of the Worldcoin protocol and its tools. It was created by the CEO of the company that revealed the ChatGPT chatbot, OpenAI, Sam Altman, and developer Alex Blania, the CEO of Tools for Humanity. The Worldcoin developers plan to hand management of the project to the decentralised organisation, the Worldcoin Foundation.
The protocol code for the project and its hardware are publicly available. You can check them out on GitHub.
How the Worldcoin system works
A universal identifier allows you to verify your identity without having to disclose personal information every time. The project team used the principles of a zero-knowledge protocol. It is providing the third party with proof of identity verification without sharing sensitive data.
Imagine that you pass face control at a club, and guards put a neon stamp on your wrist. Beforehand, the guard checked your documents and purse in order to make sure that you were not a threat and that your identity was real. In this case, other guards, seeing the stamp, will know that you have already passed the check and that you can move forward safely. The Worldcoin universal identification system uses a similar principle. The developers call this approach Proof-of-Personhood (PoP).
Let's say you already have a World ID. Now, you can forget about long verification procedures; everything you need to create an online account is to show your ID. That is how the platform can receive evidence of your verification and trust you. All digital ID owners, in their turn, are going to be protected from data leaks because they can now avoid providing third parties with their personal data.
World ID also helps confirm identity in a number of other cases, including:
- participating in voting;
- writing reviews;
- applying for grants, benefits, etc.
Interesting! World ID 2.0 has already been integrated into a number of platforms, including Telegram, Reddit, Shopify, and Minecraft. That is why Worldcoin users can undergo passwordless authorisation within platforms.
The idea of Worldcoin is not brand new. A number of other teams are developing similar identification systems, including Civic and Ontology.
How does Worldcoin work?
Worldcoin uses special devices—orbs—to scan the iris. These are metal spheres with sophisticated technical "filling.”
Orb in section. The device uses anti-water and dust protection systems that help the orbs work in unfavourable weather conditions. Source: Worldcoin official website
Orbs can make a digital “imprint"—IrisCode (a set of random numbers)—and load it into the system. The system issues a World ID using the provided data and assigns it to a specific user.
The company hires orb operators, who earn money for each registered user. You can apply for a job as an orb operator on the project website.
Orbs in the Worldcoin pavilion. Source: Worldcoin official website
Information about the location of orb operators can be found on the company's website. There are orbs in ten countries: Argentina, Chile, the USA, Germany, Japan, South Korea, Mexico, Portugal, Singapore, and Spain.
As of the 1st of March, 3.8 million people from 120 countries have already provided the system with their biometrics. The number of daily active users of the project has reached 1 million.
Worldcoin has a World App for iOS and Android. According to the developers, its users have access to tools for personal identification and financial transactions.
Cryptocurrency Worldcoin
Worldcoin has a cryptocurrency, WLD. These are native tokens within the ecosystem dedicated to conducting settlements inside the project.
The Worldcoin team is conducting an airdrop of tokens. Download the project app if you want some WLD. The system will block the coins in the account. You will be able to get them only after submitting your biometrics. The platform's FAQ states that each user can claim 1 WLD per week. Another way to earn coins is through an orb operator's job.
As of the time of writing this review, the Worldcoin cryptocurrency is trading at $7.7. There are trading pairs for the coin on many major exchanges, including Binance, OKX, and Bybit.
Since the launch of trading in June 2023, the Worldcoin cryptocurrency has skyrocketed by more than 6,000%.
What's wrong with the Worldcoin project
The Worldcoin team faced many accusations. Some of them are not groundless. For example, the project's FAQ states that the company undertakes not to give third parties access to the collected data. At the same time, Worldcoin is ready to provide authorities with its identification system base. There is no guarantee that authorities will not begin to use the project's data for purposes that are contrary to the interests of users.
In addition, users doubt orbs safety. In May 2023, a scandal erupted online after hackers managed to gain access to the device operator panel.
Doubts about Worldcoin's security became the reason to ban the project in Kenya. The Hong Kong authorities went deeper by initiating an investigation. Local watchdogs suspect the project of violating laws on storing biometric information.
WLD is sensitive to project problems. Its 15% drop amid Hong Kong authorities' pressure in February is evidence. It can be assumed that the fight with regulators will continue to put pressure on WLD. Therefore, investments in the Worldcoin cryptocurrency should be treated with extreme caution.
Should we immediately register an account at Worldcoin?
Unfortunately, Worldcoin has not been proven to be secure. Several countries's authorities have questions about the company’s tools and methods of storing sensitive data. Those who believe in the theory of creating a “digital prison” through the universal collection of biometrics should not consider registration.
Those who are willing to take risks for the sake of simplified verification and a pair of WLDs should weigh the pros and cons. For example, ask yourself whether you are prepared for your biometric data, which, unlike a password, cannot be replaced, to end up in the hands of the government.
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This article is not an investment recommendation. The financial transactions mentioned in the article are not a guide to action. Itez is not responsible for possible risks. The user should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about making any operations with cryptocurrency.
