Bloomberg Decodes the Worldcoin Orb Factory: Humanity's Bold and Absurd Defenders

Author: Ashlee Vance, Bloomberg

Compiled by: Luffy, Foresight News

Nuremberg, Germany, is picturesque, with not many high-tech elements in its city center. It has a castle and a cathedral, signs promoting German sausages, and rows of ice cream shops that attract tourists. However, on a working day in mid-May, the city hosted a serious geek event.

At a futuristic-themed retail store named Josephs, visitors discovered a mysterious metallic sphere, about the size of a cantaloupe. This sphere, called Orb, is coated in shiny chrome and mounted on a black pole that extends from a huge rectangular wooden base. The entire setup is placed near a window at the edge of Josephs' main exhibition hall. One of the creators of this strange object, Alex Blania, is not far away. He sits in a chair at one end of the room, while an interviewer poses various questions to him in front of dozens of German computer science and engineering students who are celebrating the local boy Blania's success.

Workers observing the Orb. Source: Bloomberg Businessweek

Europe has had some significant technological success stories, but it has long lagged behind the U.S. in terms of the number and quality of companies and entrepreneurial ideas. This is precisely why people are cheering for Blania. He is the CEO of Tools for Humanity Corp., which uses Orb to verify the identity of every person on Earth, and is also part of the cryptocurrency system Worldcoin. Tools for Humanity is headquartered in San Francisco and Erlangen, Germany. The company's founder is Sam Altman, who is a major financial backer, along with Tiger Global Management, Fifty Years, Khosla Ventures, Andreessen Horowitz, and dozens of other investors who have contributed over $250 million, as stated on the company's website, to achieve a "more equitable economic system."

To achieve this not-so-simple goal, Tools for Humanity aims to create a global identity system for humanity. Their idea is that artificial intelligence is developing so rapidly that we will soon need a way to distinguish humans from machines. In other words, to prevent the negative impacts of superintelligent AI, such as deepfakes and scams, from flooding the internet, we must answer a question that already exists: Is it a robot or not? This is where Orb comes into play. It captures people's iris images under the supervision of human employees and grants them a unique World ID, linking a real person to a machine-generated string. Then, you can use your World ID to log into Shopify, Reddit, or Discord servers, making everyone safer because they know they are dealing with real, flesh-and-blood people, not AI.

Registering on the Orb at Josephs. Source: Bloomberg Businessweek

However, this is just the first step in a very futuristic vision. Those who obtain a World ID can also receive a reward in the form of Worldcoin cryptocurrency WLD. Tools for Humanity, which manages Worldcoin, Orb, World ID, and all other products, believes that cryptocurrency is crucial for addressing the income and resource distribution issues that AI may bring. Therefore, the company hopes to create a financial network to do things like regularly provide grants to those in need. In this case, the Worldcoin network will serve as a non-governmental financial backbone for the global population.

Blania and Altman officially proposed their Worldcoin blueprint a year ago, and the feedback has been mixed. On one hand, they have persuaded over 6 million people to register for a World ID using Orb, and the registration rate has been soaring this year. The total value of the cryptocurrency WLD exceeds $550 million. In a factory in Germany, Orb is being mass-produced and will soon be distributed worldwide.

On the other hand, Worldcoin's plans have led many to find them absurd and dystopian, almost like a privacy nightmare out of Orwell. Many countries have already halted iris collection, with governments concerned that those standing in front of the Orb do not fully understand the agreements they are signing. As Hong Kong regulators stated in May, collecting biometric data is "unnecessary and excessive."

30-year-old Blania is well aware of these criticisms and admits that Worldcoin's launch has not gone smoothly. Bloomberg first reported on the company's movements in 2021, and months later, the founders were ready to express their intentions. "We faced setbacks early on," Blania told the students at Josephs.

However, over the past year, Blania and his team have tried to address the issues facing Worldcoin one by one. They have improved the security technology of the Orb and the way the company handles customer data. They have met with regulators repeatedly and successfully persuaded countries like South Korea and Kenya to lift bans on the Orb. Yes, the Worldcoin project sounds crazy, and even Blania himself believes its chances of success are only 5%. Nevertheless, he insists in an interview with Bloomberg Businessweek that governments and the public have not yet caught up with the impending technological changes and have not created the tools needed to address the impacts when AI truly arrives. Having the Orb and failing is better than never having had the Orb at all.

"This is actually the coolest part of Silicon Valley," Blania told the students, "You can raise $250 million with a crazy idea, and if it works, everything changes; if it fails, at least it was worth a try."

Blania, who is 1.9 meters tall and slender, possesses a disarming charm even when discussing agreements, blockchain, and biometric systems. He understands all the high-profile tech industry jargon but displays a typical German engineer's rigor when addressing Worldcoin and the issues it attempts to solve.

Alex Blania

Blania sat in a café by the Pegnitz River and shared his story. He grew up in a small village about a 45-minute drive from Nuremberg. His father had an unusual consulting job, serving as a temporary CEO for several struggling companies. His mother worked in accounting and finance. Blania has loved mechanics, electrical engineering, and computer programming since he was a child. He has worked on various projects at home: retrofitting an Austin Mini, creating an automatic beetle counter to monitor forest health, and building a vertical farm.

During university, Blania developed a strong interest in physics and artificial intelligence. He pursued a master's degree in physics at the University of Erlangen-Nuremberg and later took courses at Caltech, seemingly destined to become a theoretical physicist.

However, the stories and legends of Silicon Valley attracted Blania. He frequently traveled from Europe to San Francisco, seeking ways to enter the startup scene. While studying at Caltech, Blania would drive a beat-up Toyota Corolla to San Francisco every weekend, trying to meet people in the startup community. These efforts eventually paid off. Unbeknownst to him, Blania had built enough connections that one day he received a random email from Max Novendstern, a young Harvard graduate known for his novel ideas in financial technology.

It was October 2019, and Novendstern said he and Altman had been brainstorming ideas for a cryptocurrency project and wanted to know if Blania would be interested in an interview. "I knew nothing about cryptocurrency," Blania said, "The email had a two-page vision statement written by Sam and Max, but I really couldn't understand any of it."

However, Blania greatly admired Altman. He had served as the president of the startup incubator Y Combinator and was then the new CEO of OpenAI. Blania took two weeks off from school to read as much as he could about cryptocurrency and universal basic income. Altman was personally obsessed with the concept of universal basic income, which refers to a system where the government pays its citizens unconditionally and regularly. Blania also became fascinated by this concept and began to believe that if cryptocurrency truly became mainstream (and not just a vehicle for financial speculation and scams), it could provide people with more economic freedom and financial possibilities. "Another idea is that AI will become widespread, society will be restructured, and we need infrastructure to ensure it benefits humanity," Blania said.

OpenAI would not release ChatGPT for another three years, and at that time, the public had not yet begun to discuss the impacts of AI daily. However, Altman and Novendstern were already deep in thought on the matter, and now Blania was too. Altman declined to be interviewed but had discussed the future with Blania multiple times. He warned that if AI were allowed to develop unchecked, it could take over the internet and lead to economic turmoil, and only a flexible financial system distributing funds and computing resources to the global population could correct this turmoil. Blania found the Worldcoin plan to be "absurd" yet "ambitious," and he loved the combination, so he chose to drop out and join the company as a co-founder.

The Worldcoin project was initially supposed to be entirely based in San Francisco, which seemed natural. However, the global pandemic shifted this effort in a different direction.

In March 2020, Blania boarded a plane to Germany. He had planned to visit some old classmates to learn how to design a top-notch biometric system. Just before the plane took off, President Trump announced that the U.S. would close its borders. Blania expected this restriction to last only a month or two. As a result, Blania was stuck in Germany, and Worldcoin's second headquarters was eventually established in the university town of Erlangen, where the team he built created the first Orb.

Orb assembly factory in Jena, Germany. Source: Bloomberg Businessweek

The early Worldcoin staff spent months analyzing existing biometric systems and carefully studying technical documents to find the best way to register billions of people on a single identity platform. They quickly realized that some of the most common systems (like facial recognition and fingerprints) did not meet Worldcoin's technical requirements.

Its biometric scanner first needed to confirm that a real person was being processed. This meant the scanner had to check for biological thermal signals, among other things. It also had to immediately confirm that the scanned person was different from those previously verified. The only system that seemed to meet Worldcoin's goals was India's national biometric database, which relies on iris scanning as a form of identification.

Optical filter. Source: Bloomberg Businessweek

One of the drawbacks of the popular biometric methods in smartphones is that, in a Mission Impossible-style scenario, a human (or superintelligent robot) could deceive them by wearing a mask or replicating fingerprints. However, mimicking an iris is much more difficult because it has too much variation, which biometric experts refer to as entropy. The iris has various sizes of diamond-shaped holes, known as crypts, and lines forming rings along the outer edge of the iris, known as sulci. Each person's iris also has a wide gradient of pigmentation, making the eyes look like marble. Even identical twins have different patterns.

The Worldcoin team's task was to draw on iris scanning technology from India and elsewhere, supplemented by a range of other technologies to prove that a real person was present during the scan. Engineers had to accomplish all of this while making the scanning process as quick and simple as possible.

Worldcoin could have designed a simple box to house all this hardware, which would have been more production-friendly. But the founding team felt they needed to create a spectacle. They chose a shiny metallic sphere that looks like a giant robotic eyeball.

The first designs for the Orb were completed in rudimentary conditions. Blania recruited his former classmate Fabian Bodensteiner from the University of Erlangen-Nuremberg. After graduation, Bodensteiner founded a hardware engineering consulting firm and left a space in his Erlangen office for the initial designs. This cramped space was filled with circuit boards, cameras, and a bed, where Bodensteiner and Blania would sleep next to the hardware when they took breaks.

Bodensteiner. Source: Bloomberg Businessweek

By the summer of 2021, Blania and his team had created a prototype of the Orb and tested it in the field. The Orb was not only spherical and eye-catching, but it also dispensed a physical metal coin from a slot on the front of the device when people registered. (This "feature" was intended to make cryptocurrency payments feel more tangible, but Worldcoin later abandoned this gimmick.) Blania and his team decided to go to the city square in Erlangen to introduce the product and try to get people to register on the spot.

The event did not go smoothly. The device's speaker emitted beeps and tones, instructing people to move closer to or further away from the Orb to improve the camera's focus. Meanwhile, a Worldcoin engineer had to connect wirelessly to the product and debug the software in real-time to complete the registration process. "We stood there like fools," said Chris Brendel, one of the early members of the Worldcoin team and now the head of AI and biometrics, "It was terrible."

Three years later, today's Orb has become a technological marvel. At its core are several interconnected circuit boards that can perform various tasks. One circuit board checks if someone is trying to tamper with the Orb or manipulate it maliciously. Another circuit board contains Nvidia Corp. chips for running computer vision and other AI software on the device through a series of neural networks. Other sensors track the Orb's location via GPS and send and receive data through wireless communication. An aluminum plate is also embedded between all the electronic devices for heat dissipation.

In addition, the optical system needed to be more careful and customized. Worldcoin wanted people to be able to walk up to the Orb and scan their irises without detailed positioning instructions or time-consuming adjustments. It turned out to be a daunting task. During testing, the company found that some people would press their faces against the Orb, while others would stand far away, swaying their bodies.

Main circuit board of the Orb. Source: Bloomberg Businessweek

To address this issue, the Orb uses two lenses. A wide-angle lens assesses the scene and uses neural networks to predict the likely position of a person's eye. A telephoto lens moves on a gimbal to capture close-up shots of the person. Worldcoin collaborated with a Swiss company to create a lens that employs novel focusing technology. The lens consists of a membrane and a box of oil that can be shaped by electric current. The oil can be pushed into the membrane to change the lens's focal length in milliseconds, magnifying a person's iris without adding any bulky mechanical parts. "It's much more compact than trying to use traditional methods that require multiple lenses," said Bodensteiner, who leads much of the engineering work on the Orb.

To further ensure the integrity of the verification system, the Orb is also equipped with a body heat sensor and two sensors that scan depth and infrared wavelengths, capable of detecting whether a person is holding a screen with an iris image instead of displaying a living eyeball.

Orb ready for lens calibration testing. Source: Bloomberg Businessweek

The manufacturing partner Jabil Inc. assembles the Orbs in Jena. Jena is a small town with a long history of optical technology, located about two and a half hours north of Nuremberg. In 1846, Carl Zeiss opened his first optical laboratory there, and to this day, Jena still gathers many seasoned professionals from the optical industry, some of whom still handcraft the Orbs. The entire process requires about a dozen people working at several different stations to assemble the electronics and test them, followed by the final step of attaching the chrome-plated shell and sealing all components. Each Orb costs about $1,500 to manufacture, and unlike typical consumer electronics, there is no need to produce millions of Orbs or package them beautifully. The second production line at the Jabil factory has just been activated and should be able to produce tens of thousands of Orbs, which Blania believes are needed to register 1 billion people. So far, Worldcoin has manufactured 3,300 Orbs.

Irony and a sci-fi sense of doom loom over every twist and turn of Worldcoin. Through OpenAI, Altman seeks to create powerful AI systems that make things like Worldcoin necessary. He builds problems while simultaneously marketing solutions to people. More importantly, people can only imagine what it would feel like for superintelligent AI to be downgraded to "non-human" status on the internet and whether it would harbor hostility toward Altman, Blania, or even others.

Indeed, many people are skeptical of Worldcoin. Last year, the Washington think tank Electronic Privacy Information Center explicitly outlined two major concerns surrounding Worldcoin in a statement. The organization's legal advisor, Jake Wiener, wrote, "Worldcoin's approach creates serious privacy risks by bribing the poorest and most vulnerable people to hand over immutable biometrics, such as iris scans and facial recognition images, in exchange for small rewards." "Mass biometric collection like Worldcoin poses a large-scale threat to people's privacy."

World ID registration. Source: Bloomberg Businessweek

Regulators currently agree with some of these viewpoints. When Worldcoin first launched, people in over 20 countries could access the Orb and register. Now, the list of countries on the Worldcoin website has shrunk to 12, as many governments in Europe, Asia, and Africa have suspended registrations, citing concerns that Worldcoin could lose or misuse identity information. In the U.S., if people want to join the Worldcoin identity system but will not receive any WLD cryptocurrency, they can scan their irises at a few tech-savvy retail stores. The regulatory uncertainty surrounding cryptocurrency means Worldcoin has much work to do to truly become a mainstream service. Although the number of Orb registrations has steadily increased over the past year, Worldcoin's progress still lags far behind its initial goals.

Of course, for decades, people have been trading privacy for convenience. Alphabet, Apple, and Amazon, which store vast amounts of personal data from billions of people, could argue that this data is more private and valuable than the random strings generated from iris photos. Many smartphone owners have already handed over their locations, calendars, and emails to their chosen tech giants. A startup proposing to become a global identity and financial broker is entirely new, even though it is not much different from previous tech companies.

On a recent working day morning, about 15 people lined up in front of a Worldcoin registration point in Mexico City. Most of these individuals were young men and middle-aged men, situated in a historic area of the city filled with wedding dress and suit shops, with display windows showcasing quinceañera dresses. The Worldcoin registration center is operated by contractors, with white folding chairs in the waiting area and a temporary sign hanging on a rope promoting the service. A security guard and two local staff members (one wearing a Worldcoin hoodie and the other in a black T-shirt) work at the center, guiding people through the registration process.

45-year-old Juan Juarez registered a few weeks ago and brought his 18-year-old son Santiago for scanning. Juarez has been thinking about the money he has earned from Worldcoin's appreciation since he first registered and hopes to use those gains to invest in other cryptocurrencies. He also likes the grand goals of the technology. "I think it's a good thing because in the future it will help us see who the real people are and who are not," Juarez said. His son expressed a desire to use the money earned from Worldcoin to pay for his studies in electronics.

In Singapore, registering for Worldcoin has become a tourist attraction. Recently, at the Orb center in Centennial Tower, tourists from Bangladesh, China, and India underwent iris scans in exchange for some cryptocurrency. About a dozen people, including an electrician, several students, and others in the tech industry, were waiting to complete the two-minute registration process. 33-year-old Indian Mitesh Kha was pleased with the quick payment. "This is free money," he said, "I'm happy to scan my iris and let Worldcoin collect the data. According to the app, I can delete my data anytime if I want."

If Blania has any malice, he hides it quite well. The Orb itself does not store any personal data. The iris scans are immediately deleted from the Orb and are never uploaded to the internet. He said the only data sent is an encrypted string representing the iris, composed of 1s and 0s. (However, people can choose to share their data with Worldcoin for training purposes, in which case the encrypted information will be sent over the internet.) Worldcoin previously managed this data in a centralized manner but is now working with universities and other more neutral parties to split the strings and store them in different data centers. Hackers would need to assemble all parts and somehow crack their encryption to have a chance of stealing personal codes.

Beyond that, almost everything related to Worldcoin is open source. Anyone can access GitHub to download detailed schematics of the Orb hardware or check the Worldcoin protocol. The organization plans to start producing Orbs in different colors and shapes this year, making them appear more friendly. Worldcoin's recent hope is that other organizations will choose to make their own Orbs and build services on top of the Worldcoin protocol. Blania and Altman's ultimate goal is to have Worldcoin operate independently of them, run by a community of project supporters. They hope to see this service become a public product.

Iris scanning. Source: Bloomberg Businessweek

Some critics appreciate Worldcoin's efforts and intentions but also point out fundamental flaws in its security. Cybersecurity expert and co-founder of identity startup Badge Inc., Charles Herder, stated, "Worldcoin is doing something very important; it is putting the value of identity and biometrics front and center." But Worldcoin also has vulnerabilities that could be exploited by hackers (which have since been fixed). Moreover, according to Herder's analysis of Worldcoin's public documents, the service has flaws in how it stores data. Additionally, it remains a company. "You have to believe that their business model won't change because they go bankrupt in 30 years," he said, "They have the incentive to monetize this data, and you have to trust that those incentives won't outweigh their commitments to you."

Altman initially supported Tools for Humanity out of his own pocket and later helped it raise funds. Investors own 13.5% of the Worldcoin tokens, which, by market capitalization, ranks as the 113th largest cryptocurrency. The remainder is allocated to buyers or those who scan their irises.

To realize Blania and Altman's ambitions and prevent the crises that AI may bring, they need the value of Worldcoin to soar. They believe that as AI begins to change the global economy and threaten jobs, governments will not act swiftly. In theory, those in need of money will be able to rely on the income provided by Worldcoin. "We need to try new things that don't currently exist," Blania said.

In conversations with students at Josephs University, Blania downplayed the regulatory responses over the past year. He has been explaining this technology to governments around the world, hoping they can catch up with him in time. He said the sudden rise of AI technology over the past year has begun to alert governments to this threat. Worldcoin is a warning system, not the evil identity hoarder it is misperceived to be. "I think our predictions from four years ago were correct, and the timeline aligns very well with our current situation," Blania said, "What needs to be done now is to execute and explain to people; rest assured, we are not stealing your soul."