The Defiant

Worldcoin Edges Closer to AI-Driven Crypto Identity Device

Founder Alex Bania Says Orb to Be Released in First Half of 2023

By: Owen Fernau

Worldcoin Edges Closer to AI-Driven Crypto Identity Device

Worldcoin, an online community of devs and technologists, quickly garnered headlines in 2021 for its eye-scanning piece of hardware known as the Orb. After running silent for a year and a half during a testing phase, the project is, ahem, eyeing a full-blown launch in the first half of 2023.

And that raises a question: What is it? And do we need it?

The Orb is a rare thing in crypto — hardware. Source: Worldcoin

Those aren’t easy questions to answer. Worldcoin’s product is a token, an app, and most controversially, a way to prove a unique identity through biometrics. Oh, and it is also throwing artificial intelligence into the mix.

These products are functioning in various forms of testing, but have yet to go live as an integrated offering.

Hallowed Values

That’s about to change, Alex Blania, the project’s co-founder and CEO, tells The Defiant. And Worldcoin will test one of the most hallowed values in DeFi — privacy.

“We got incredibly lucky with timing in the sense that we are ready to launch while the world maybe understands that AI is not a joke,” Blania told The Defiant.

Worldcoin, which is backed by Sam Altman, the 37-year-old entrepreneur who was president of the legendary Silicon Valley accelerator Y Combinator, is developing a biometrics driven protocol to prove personhood. Such technology, of course, has been in the marketplace for years. Even commercial banks, typically laggards when it comes to tech adoption, use eye-scans and facial recognition in day to day business.

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In a world where artificial intelligence will soon interact with web pages to create accounts and content on social media, digital proof-of-personhood could become important very quickly. After all, the Web is already brimming with bots pretending to be people. With the power of AI coming online, this phenomena is about to deepen and become far more complicated.

“The last two years, whoever we talked to, we always said, hey, AI is gonna change everything,” Blania said.

This development, which is bound to accelerate, poses new economic challenges. AI, for instance, could generate economic activity on an unprecedented, and significant, scale. How will the activity be controlled? And how will its proceeds be distributed?

Cosmic Questions

Those may sound like cosmic questions but in an AI-driven future they will become important. Worldcoin is jumping right into the heart of the picture.

Altman, as it happens, is the CEO of OpenAI, the non-profit behind ChatGPT, the juggernaut that was recently valued at $29B following a major investment by Microsoft. He is serving as a co-founder of Worldcoin, and is expected to bring an AI capability to the project.

Establishing digital identity is essentially an unsolved problem. Within crypto, people commonly create tens of accounts or more in order to maximize the amount of tokens they receive in airdrop events.

Projects like Optimism, the scaling solution for Ethereum, went to great lengths to try to prevent this sort of spamming, but it’s very difficult to encompass all the edge cases.

Proving personhood, already important in the context of crypto, could become even more so in the age of AI, when the ability to spin up accounts and automate transactions on blockchains appears imminent.

Establishing digital identity is essentially an unsolved problem. Within crypto, people commonly create tens of accounts or more in order to maximize the amount of tokens they receive in airdrop events.

With AI-driven economic growth on the horizon, this paradigm may be about to change. Blania referenced a report co-authored by the Future of Humanity Institute and University of Oxford, which said AI-driven entities may account for as much as 1% of the world’s GDP.

The report suggests that, were one entity able to capture that much value, the outsized profits should be distributed to the world at large to alleviate the disruptive effects of AI.

AI-driven Profits

The problem of distributing these profits is a hard one — with 4.4B people either without a legal identity or unable to prove its existence digitally, according to a McKinsey study. The project’s system could step in to serve as the distribution method for what would essentially amount to a Universal Basic Income stemming from AI-driven profits.

It seems highly theoretical, but then again, a chatbot passing graduate school level tests would have seemed far fetched six months ago.

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Sam Altman (left) and Alex Blania founded Worldcoin.

But how does Worldcoin work? Blania said that Worldcoin’s app is non-custodial, meaning that users control their private keys. This means that users will be able to use DeFi protocols like Uniswap and Aave using Worldcoin’s app.

As part of a large-scale communications thrust, Worldcoin also made clear its efforts to decentralize last week. To that end, it introduced the Worldcoin Foundation, a nonprofit with the stated goal of stewarding Worldcoin towards decentralization.

Imperfect Governance Model

Decentralizing is hard even in the context of pure DeFi protocols. Maker, the lending protocol, is a prime example of decentralizing, still has a highly imperfect governance model. Blania told The Defiant that the Worldcoin team has worked with people from Maker on its decentralization efforts.

With its Orb, Worldcoin would need to decentralize both the creation and distribution of hardware, as well as the operations aspects of using the product to ascertain biometric data.

In line with these efforts, the Worldcoin team has made some of its hardware design open-source on Github with plans to progressively release more.

The project says it doesn’t store the biometric data itself. Instead, Worldcoin keeps a hash, a unique string of numbers created with a type of algorithm commonly used in cryptography, of the image taken by the Orb.

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Not everyone has been satisfied with the system in terms of privacy. Edward Snowden, the former National Security Agency contractor who blew the whistle on industrial-level government surveillance of U.S. citizens, panned the system on Twitter. He said that hashes of the biometric data could be matched with future scans. “Don’t use biometrics for anti-fraud,” Snowden said. “In fact, don’t use biometrics for anything.”

With regards to the Orb and biometrics, Blania said he wished there were other ways to establish personhood digitally, but he didn’t think it was possible. The team has put out a document outlining how the Orb works, and how, according to the organization, it maintains privacy.

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Privacy advocate and whistleblower Edward Snowdon opposes biometrics.

Of course, Worldcoin has a ways to go in terms of establishing the public’s trust. The project attracted significant press questioning its do-gooder messaging considering that venture capitalists like a16z have invested, presumably with the hopes of profiting.

Blania said this was partially because of Alman’s star power. “Because Sam is a co-founder, people immediately treated it as like, oh, this is like this huge operation, this huge organization,” he said, saying that the reality at the time was a group of less than 20 people iterating on ideas of how to establish digital identities.

Now with the team behind Worldcoin scaled up, the project is about to enter the spotlight.