From UPSC perspective, the following things are important :
Prelims level : Worldcoin
Mains level : NA
Central Idea: Sam Altman, CEO of OpenAI, is reportedly raising $100 million for Worldcoin, a unique cryptocurrency.
What is Worldcoin?
- Worldcoin, co-founded by Altman and Alex Blania in 2019, aims to provide every human being on Earth with a share of its digital token.
- Worldcoin is a crypto project that seeks to establish a global identity and financial network for everyone.
- It utilizes a device called the Orb, which scans people’s irises to verify their uniqueness and humanity.
- Individuals who undergo the iris scan are rewarded with Worldcoin tokens.
- The World App, developed by Worldcoin, enables users to make payments, purchases, and transfers using Worldcoin and other digital assets.
- The project plans to launch in the first half of 2023 and distribute a total of 10 billion tokens, with 80% going to users.
Functioning of Worldcoin
- Worldcoin’s founders aimed to freely distribute shares of the digital token to every person on the planet.
- They envisioned it as a global distribution system for Universal Basic Income and a means to distribute profits generated by AI systems equally among people.
- To ensure fair distribution, Worldcoin utilizes biometric iris scans through the Orb device.
- The Orb scans the iris and converts it into a hash, which is impossible to recreate even if compromised.
- The iris hash and the user’s public key hash are sent to Worldcoin servers, and if the person is new to the system, the hashes are added to the database and the company’s blockchain.
Challenges and criticisms
- Worldcoin faces challenges regarding the accessibility of the Orb and expanding the user database.
- The project plans to incentivize sign-ups by offering coupons or access to loans.
- Concerns exist about the privacy and security of biometric data and potential misuse.
- Questions arise about the feasibility and scalability of reaching unbanked or underbanked populations.
- The value and utility of the Worldcoin token and its competitiveness with other cryptocurrencies or fiat currencies are also subject to scrutiny.
- A cryptocurrency is a digital asset stored on computerised databases.
- These digital coins are recorded in digital ledgers using strong cryptography to keep them secure.
- The ledgers are distributed globally, and each transaction made using cryptocurrencies are codified as blocks.
- And multiple blocks linking each other forms a blockchain on the distributed ledger.
- There are estimated to be more than 47 million cryptocurrency users around the world.
- These cryptocurrencies are created through a process called mining.
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