OpenAI founder Sam Altman launched Worldcoin in July, a cryptocurrency token offered to people willing to share their biometric data by scanning their eyeballs with an Orb, seeking to link real-world identity with decentralized blockchain identity. Many aspects of the project embody the dystopian nightmare that the cypherpunks created Bitcoin (BTC) and other cryptocurrencies in order to avoid.
The tokenomics for Worldcoin’s WLD token are such that only 1% of the total value is floating right now. That kind of overhang is unprecedented, even in the wild world of crypto distributions. The token won’t long hold its value unless the entire world puts their eyeballs into the Orb. Unlike Bitcoin or Ethereum — which grew organically through user adoption and utility — the project is all or nothing. Either it is the only solution for on-chain identity or it will be worthless.
Altman’s recent testimony advocating for a regulatory moat for artificial intelligence (AI) to protect OpenAI’s dominance is suggestive of his business ethics. The change in business entity form for his organization from nonprofit to for-profit is also suggestive of the stickiness of his public promises.
Claims that privacy and biometrics are protected by Worldcoin are unsubstantiated assertions, and they cannot be trusted until Worldcoin — along with its mysterious Orb — become free and open source. This is not Altman’s approach to development and would probably threaten the integrity of Orb identity verification anyway.
Sybil attacks and spam are a problem in crypto, and they can lead to market manipulation. Altman’s AI revolution, as impressive and useful as it is, will make that worse. But this is not the answer. Crypto privacy should overcome the urge to ape into the next token.
HERE WE GO FOLKS: Hundreds of youth voluntarily line-up to have their eyeballs scanned with a Worldcoin orb to get their new digital ID with “free money” Worldcoins in their new digital wallet. This is exactly how #CBDC will be rolled out globally…
— Patrick Henningsen (@21WIRE) July 26, 2023
Worldcoin is partly a response to Altman’s vision for AI. He anticipates his AI project will cause massive disruption and allow AI tools to pose as humans, so his response is to scan the eyeballs of everyone in the world. Altman asks us to trust him with that biometric information, and he will give us a few WLD tokens — which currently don’t actually do anything, so it’s the biometric equivalent of buying our identity registration with an on-chain version of the beads used to buy Manhattan.
Imagine the ego needed to assert that you will change the world with AI but warn your AI revolution will wreak havoc — yet, don’t worry, the whole world just needs to also scan their eyeballs into his secret Orb to fix it. This depth of hubris would make Soviet-era commissars blush.
We are told not to worry because Worldcoin will decentralize. We were also told OpenAI was a nonprofit research organization, but we know how that promise changed when the lure of Microsoft’s $10 billion came calling. And even if Worldcoin decentralized tomorrow, remember that Worldcoin is built on the Optimism layer 2, and that isn’t decentralized either.
In fairness, some of the top minds in zero-knowledge proof cryptography are working on the project. I don’t doubt their commitment or their tech, and we can appreciate the search for identification solutions within cryptocurrency to build on-chain identity while preserving privacy. That doesn’t mean buying into a solution from Altman — for a problem he’s creating with OpenAI — that works by giving his centralized project control over my identity.
Ethereum founder Vitalik Buterin recently opined on Worldcoin, and he was mostly right about the trade-offs — from advantages to worst-case scenarios. But the one area he missed was the economics of wealth. Like some other crypto developers, he buys into an overestimated bias of wealth effects on the economy.
That’s an understandable bias for an Ethereum developer who is already wealthy. However, for the rest of us, the market’s regular pricing system is more trustworthy than Altman’s dystopian eyeball scanner. There are easier solutions to Sybil attacks and other identity challenges to the extent they are a legitimate problem. I’d rather pay for access, or be fooled into interacting with bots, than scan my eyeballs into Altman’s Orb.
J.W. Verret is an associate professor at George Mason University’s Antonin Scalia Law School. He is a practicing crypto forensic accountant and also practices securities law at Lawrence Law LLC. He is a member of the Financial Accounting Standards Board’s Advisory Council and a former member of the SEC Investor Advisory Committee. He also leads the Crypto Freedom Lab, a think tank fighting for policy change to preserve freedom and privacy for crypto developers and users.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.3