Institute of All Things: What is Worldcoin that OpenAI founder wants to airdrop to 1 billion people?

Author: Chen Jian Jason, Institute of All Things

With the release of OpenAI's ChatGPT, a wave of AI enthusiasm has emerged. At the same time, OpenAI founder Sam is planning another Crypto boom that will also occur in the first half of the year: WorldCoin.

As the man behind the world-class projects ChatGPT and WorldCoin, Sam is also hailed as the next tech leader to succeed Elon Musk. Today, I will interpret the lesser-known project WorldCoin.

Worldcoin is a Crypto project founded by Sam in 2020, aiming to create a global financial equity and inclusive open-source protocol. According to a report from the McKinsey Global Institute, over 4.4 billion people currently lack legal identity or cannot verify their identity digitally. The vision of Worldcoin is to build the world's largest and fairest digital identity and digital currency system, achieving identity verification by scanning the irises of every person on Earth. So far, millions of people's irises have been scanned.

Worldcoin is currently in the testing phase and is expected to launch its mainnet in the first half of 2023, raising $120 million at a valuation of $3 billion. It has two main entities: the Worldcoin Foundation and Tools for Humanity. The Worldcoin Foundation supports and develops the Worldcoin ecosystem and community, while Tools for Humanity is a tech company aimed at ensuring a fairer economic system and is the actual developer of Worldcoin.

Worldcoin has three main tasks: to create a global identity ID, a global currency, and a wallet that carries the identity ID and currency. Payments, purchases, and transfers can be made using its own Token as well as other digital assets and traditional currencies. These three tasks correspond to three elements:

WorldID: A digital identity focused on privacy protection and personality proof, which will be discussed in detail later regarding privacy and personality proof.

WorldCoin: The first Token to be distributed for free to people globally, with plans to distribute it to 1 billion people.

WorldAPP: A wallet for payments, purchases, and transfers globally.

At first glance, it seems unremarkable, just the common ecological trio: DID, Token, and wallet. However, a deeper study reveals the grand vision behind it and the technical challenges that need to be addressed.

WorldCoin aims to create a digital economy in which everyone, regardless of who they are, can participate and benefit from decentralized collective ownership. The first step is to ensure as many people as possible hold the same Token. The more collective ownership and use of the same Token, the greater its utility for each participant due to network effects. Therefore, WorldCoin plans to airdrop Tokens to 1 billion people globally to rapidly expand its financial network.

However, to take the first step, the first issue to address is the "Witch Attack" problem. A Witch Attack refers to a situation where one person controls multiple addresses to profit. Speaking of which, here's an interesting tidbit: I never understood why it was called a Witch Attack. This naming comes from a 1973 novel titled "The Witch," where a woman diagnosed with schizophrenia has 16 personalities. So, one person controls 16 "people." This makes it quite clear, doesn't it?

Recently, the airdrop of Arbitrum has become a carnival for many profit-seeking studios, but it has also brought the issue of preventing Witch Attacks back into industry discussions. The internet is already filled with identities that are hard to distinguish between true and false. However, at least the phone numbers and emails required for registration are not so easily obtained. But in Web3, without KYC, wallet addresses can be created extremely conveniently, leading to a proliferation of fake accounts. Therefore, ensuring the fairness of Token distribution is a primary issue that must be addressed. It is essential to ensure that everyone on Earth can only register one wallet in its network. While everyone is discussing DID, data analysis, and other means, Worldcoin directly adopts the first principle: we need to verify that the wallet address corresponds to a real person. So, let's go straight to live verification! One has to ask if Sam has the flair and qualifications to succeed Musk, haha.

To this end, Worldcoin has custom-developed a biometric device called Orb, which verifies a person's uniqueness by scanning their iris while ensuring the privacy of the verified individual through zero-knowledge proofs.

Orb is a spherical hardware device that, after scanning the iris image of a person's eye, generates a unique IrisHash value locally through a one-way function, which is a short numerical code. It then searches the database to check if the person is already registered. If not, registration is completed, and they receive an airdrop of 25 Tokens. This process does not require storing or uploading the original image, nor does it require any other personal information, thus strictly protecting user privacy.

For specific technical details about Orb, you can refer to this article, which shows that Worldcoin has made significant investments in this area.

https://worldcoin.org/blog/engineering/opening-orb-look-inside-worldcoin-biometric-imaging-device

Worldcoin will recruit operators globally, requiring them to be legally registered local businesses, and it is explicitly stated in the terms that services will not be provided to residents of countries with legal restrictions, such as the United States. This shows that Worldcoin places great importance on compliance, as collecting biometric information from residents of any country is very sensitive.

In fact, biometric technology is already quite mature, including facial recognition, fingerprint recognition, DNA testing, etc. However, Worldcoin chose iris scanning primarily due to considerations of uniqueness, fraud prevention, and performance. The iris is harder to forge than a face or fingerprint, and considering the airdrop for 1 billion people, the performance advantages of iris scanning outweigh the difficulties of facial recognition database comparisons or DNA testing.

Once a business applies to become an operator, the Worldcoin team will enter the review and interview process, including KYC, compliance training, and operational area assessments. After that, they will provide a set of Orb devices to start operations. Operators will be responsible for educating local users and conducting scans. After each registration, operators will receive Token rewards. This approach may seem very familiar, reminiscent of the grassroots marketing tactics from five years ago, haha. So, if Worldcoin truly enters China, it seems that Meituan will become the largest operator.

The total supply of Worldcoin is 10 billion, with the vast majority allocated to users and operators. To incentivize early contributors, the number of Tokens received by users and operators for each registration will decrease over time. Less than 20% of the total Token supply will be used to fund the early core developers of Orb, and 3% will be allocated to ongoing ecosystem development.

Currently, 1.3 million people across four continents have completed the scanning registration, with over 1% of Portugal's population already registered. I often hear friends mention Portugal's openness to Crypto, and it seems to be true.

It is worth noting that Worldcoin is currently closely associated with the Ethereum ecosystem. From the documentation, it can be seen that it uses Ethereum's optimistic rollup, inheriting Ethereum's account anonymity and transaction transparency features. Additionally, the SDK has built-in cross-chain capabilities to interact with the Ethereum mainnet, other Layer 2 solutions like Optimism and Arbitrum, and even non-EVM compatible chains like Solana and Polkadot. The overall structure diagram is as follows:

Since Worldcoin aims to collect biometric data from billions of people, many may instinctively feel panic. However, it is important to note that accounts and transactions on Worldcoin will never be associated with any biometric data from Orb. Iris scanning is solely for personality verification, and only the one-way irreversible IrisHash generated locally is sent to the database. Even if the database is leaked, it will not reveal the true identity behind each IrisHash. Therefore, Worldcoin's Orb is only used to verify that this is a unique person, and who they are does not need to be known.

A new user obtaining Worldcoin is divided into two phases:

Phase One: Registration and Uniqueness Detection

1. The user generates a key pair on the mobile APP.

2. The user provides the hashed public key to Orb via a QR code.

3. Orb scans the user's iris and locally calculates the corresponding IrisHash.

4. Orb sends the user's public key and IrisHash to the sequencer node.

5. The sequencer node verifies whether the IrisHash already exists in the database. If not, it saves the IrisHash and public key after uniqueness detection.

Phase Two: Claiming Worldcoin

1. The user generates a wallet address locally in the APP.

2. The APP verifies that it owns the public and private keys registered in Phase One through zero-knowledge proofs.

3. The proof is sent to the sequencer, which verifies it and deposits the Tokens into the wallet address.

4. The deposit result is sent back, recording that the user has received the reward, thus preventing double claiming.

As a global currency, Worldcoin must gradually achieve decentralization, mainly divided into governance, development, and operations.

Governance: Ensuring that the overall governance structure of the project allows for decentralized decision-making. A foundation has already been established, and the IP and grants will be handed over to the foundation for management, completing the initiation of the DAO.

Development: Ensuring that Worldcoin is open-source, allowing a large number of developers to collaborate. The protocol has already been open-sourced, and Orb is in planning. More protocols will be opened up in the future, establishing community communication mechanisms and setting standards for third-party apps, as well as accepting community code submissions.

Operations: Ensuring that Worldcoin is operated by multiple teams to mitigate single points of failure. Currently, most of the work is done by Tools for Humanity under the guidance of the foundation, and in the future, operator incentives will be increased, with the foundation supporting third-party operating teams.

This concludes the interpretation of Worldcoin. Overall, I feel very excited. If it successfully takes off, it will become the infrastructure for global digital citizens, building a world digital currency to achieve financial inclusivity. However, Worldcoin also faces immense implementation pressure. As mentioned above, whether it is digital identity, digital currency, or the more sensitive collection of biometric information, this is very contentious in any strong sovereign country. Therefore, most of Worldcoin's current users are from third-world countries.

The above content is written by Jason from the Institute of All Things and does not constitute investment advice, nor does it represent an official position.