Episode # 34
A new, collectively owned global currency that will be distributed fairly to as many people as possible. These are the kinds of words to bring a warm fuzzy glow to anyone connected to this space. But as we’re about to discover they’re the prelude to hands down one of the weirdest projects I’ve ever seen in this space. One that feels ripped straight from the pages of a bad sci-fi novel. Because, the way they plan on distributing this global currency is by taking one of these, giving it to a network of operators and letting them point it at your face and take a picture. Seriously. Look at all these happy people in Kenya, Chile, Indonesia and the Sudan lining up to stare into the Orb. It’s hard not to look at this and immediately harbour deep misgivings about the story Worldcoin are telling. But let’s try and give them a fair shake because most disruptive technologies look ridiculous when we first encounter them and you never know…
But before we go any further, don’t forget to ping that subscribe button, drop us a like if that’s what polishes your chrome and now, let’s get down to the nitty gritty.
What is Worldcoin?
Worldcoin is a cryptocurrency. The stated aim is to bring about a more unified and equitable global economy driven by the internet economy. Universal Basic Income is a concept that’s been punted around the world for some years now and I know of only one instance where it’s been successfully implemented. In Finland no less. But that’s a topic for another time. Worldcoin is brought to you by Sam Altman, CEO of artificial intelligence group OpenAI and former president of the monster start-up accelerator Y Combinator. Investment to date to the tune of $25m from familiar names to tech headz. Andreesen Horowitz, Coinbase, LinkedIn co-founder Reid Hoffman, Digital Currency Group (parent company of Coindesk) and Sam Bankman-Fried aka SBF, aka the greatest crypto trader on the planet fam. That fund raised Worldcoin at $1bn. In other words, a unicorn.
So the Worldcoin team has taken a look at crypto and identified one crucial problem. Desperately low penetration. Only 3% of the world’s population currently participates in cryptocurrency networks according to Worldcoin’s blurb. This is unacceptable, they say. This cannot be they say. No, to be considered a truly global currency Worldcoin must get into the hands of –EVERYONE. So, they decided that every human soul on the whole mudball we call earth deserved to be injected with a hit of liquid cash. Straight into the eyeballs. You get Worldcoin, I get Worldcoin, we all get Worldcoin. Every human on earth. 8 billion coins in total. Reserved for you. Money from thin air.
And the early bird does indeed get the worm because the earlier you are the more you’ll receive. An amount that is roughly valued between $10 and $200. Dribbled into a wallet over a period of two years with 10% available immediately. Lucky you.
But wait… what’s to stop a financially motivated airdrop hunter claiming over and over and making themselves stinking rich with multiples of between $10 and $200? Well you need a foolproof way of verifying that a hooman is uniquely the unique hooman and not another hooman. Believe it or not, we have an identification system in place already which is often called a passport. But a passport lacks the physical presence to be taken seriously by anyone in enlightened society. So, Worldcoin decided the best way to onboard hoomans into the divine utopia that is Worldcoin and shower them with blessings from the pulsating teat of their beneficence was to make them stare into a chrome sphere that in no way at all looks sinister or intimidating. Just look at the people in this photo. Or this one. There definitely isn’t anyone with a gun pointed at them just out of shot. Okay, so, enough snark. The orb is a biometric capture device that collects an image of a person’s eyes which is then converted into a short numeric code, making it possible to check whether they have signed up already. There are literally pages and pages on the Worldcoin site about how private this is, like it’s really private. But some respected voices are not so sure. Don’t catalogue eyeballs.
But apparently in the team’s testing, nobody raised any issues. Which is odd, because every single person I’ve spoken in crypto that saw this immediately thought it was a terrible idea. Privacy, data usage, extreme surveillance – these are huge zeitgeist topics right now with Google and Facebook both facing serious legal pressure for their abuse of data practices. And why on earth do you design a device with such clear echoes of dystopian surveillance nightmares. Swedish industrial designer Thomas Meyerhoffer has indeed created a very sleek looking piece and as co-founder Alex Blania told Coindesk ‘We just wanted to make it really, really cool and really exciting and by making it shiny it gets peoples attention and they see their reflection as they stand there… it’s a very cool and memorable experience.”
The crypto itself is going to run on a bespoke layer 2 using optimistic rollups which is, simply put, a fast and cheap secondary layer that can be run next to Ethereum but still take advantage of the main chain’s security. There will be 10bn tokens in all and a paltry 20% of those have been premined and given to the team… sorry the foundation. There’s usually only one direction for pre-mined tokens – straight to an exchange to be sold for regular good old global currency because you know, why make a global currency if you can’t make a tidy profit in the one you’re purporting to replace.
And remember those beautiful orbs being taken around the world, those are owned and run by Orb Operators who are rewarded in Worldcoin for every user they onboard, allowing them to set up a whole business for themselves. And if that sounds like a multi-level marketing scheme then it certainly has some of that shape about it and demands that we ask ourselves the right kind of questions.
There’s no doubt Worldcoin’s core mission intersects with the core principles of financial freedom baked into cryptocurrency but there’s a degree of tone deafness here that needs addressing. Towards the existing crypto currency and towards the zeitgeist of the moment with an increasingly important debate over the sanctity of our personal data. It feels anachronistic. Maybe what we’re seeing here is just some web2 thinking being clumsily applied to this emergent space. Network effects have become the golden goose for all Web 2 titans. Everything at the grandest, most awesome scale possible. And there’s no doubt the power of network effects in web2 paradigms. But every day I spend in this space I’m learning more and more that the value of a crypto network lies not in its scale but in its effectiveness. It’s quality not quantity. A small number of highly engaged, highly connected individual nodes operating lean and mean is the model that functions best in this space. Village not metropolis. Sam Altman and Alex Blania have taken a pounding from the established crypto community. And it’s right that they should be properly scrutinised over the product and what it’s attempting to do. And maybe it’s the idea itself that needs contesting. One currency to rule them all is a neat idea, but as we progress further into the 21st century and we’re increasingly able to access everything anywhere all the time, it’s individuality, differences, small communities that might end up being the biggest winners.
In the old days this kind of product would be brute forced into existence via a backdoor the way Facebook tried to do with Libra. But these are not those days and while crypto also has a fight on its hands to persuade regulators it is a viable alternative, the old guard have never been more embattled to justify their methods. The times… they are a changin.
You’ve been watching School of Block, presented by Ledger and the Defiant, demystifying decentralisation, one block at a time. Don’t forget to subscribe, drop us a like if that’s what you’re into, and as always – here’s to your financial freedom.