Sam Altman’s WorldCoin: The Convergence Of AI and Cryptocurrency?
Sam Altman’s WorldCoin has been making waves in the cryptocurrency world for its innovative approach to authentication. The company is using biometric data, specifically iris scans, to verify users and issue its cryptocurrency token, also called WorldCoin. While the idea may seem dystopian to some, there is a theory behind what they are trying to do.
WorldCoin is trying to solve a big authentication problem in the Web3 crypto sphere where hackers can infiltrate a network and create multiple fake accounts, taking over a particular thing and scamming everyone. By tying a user’s identity to an iris scan, WorldCoin hopes to eliminate this problem and create a more secure system.
However, the use of biometric data raises valid security concerns. WorldCoin claims to delete the data as soon as they scan the user’s iris, but any database of identities is susceptible to being hacked. Additionally, the company has been criticised for using deceptive marketing practices and collecting more personal data than acknowledged, potentially violating privacy laws like GDPR. WorldCoin is primarily available in emerging geographies and currently unavailable in the USA because of these concerns.
Despite these concerns, WorldCoin has already raised $250 million in funding from the likes of A16Z and others. The company has already signed up 2 million users, with the goal of reaching 2 billion users by the end of 2023 (hmmm, not so sure about that!)
One interesting aspect of WorldCoin’s token launch is its approach to promoting trading of its new tokens. The company loaned 100 million tokens to market makers, aka, trading firms that buy and sell large amounts of tokens and make money on the spread. This is typical for new token projects and necessary to create an active market in the tokens ahead of listing on crypto exchanges.
However, WorldCoin’s loan to market makers represents roughly 70% of the initial circulating supply of WorldCoin, an unusually high proportion. Additionally, the company has agreements with five market makers, which is uncommon for token projects that typically only use one.
While WorldCoin’s approach to authentication is innovative, it remains to be seen whether its cryptocurrency token will have any value. As with any cryptocurrency, the token’s value depends on people agreeing that it has value in itself. WorldCoin’s unique approach to market making and authentication may set it apart from other tokens, but ultimately, its success will depend on whether it can convince people to agree that WorldCoin has value.
Here’s The Thing: Sam Altman’s WorldCoin represents a bold attempt to solve a major problem in the crypto sphere. While the use of biometric data raises valid security concerns, WorldCoin’s approach to authentication may offer a more secure system.
But I have an alternative theory in mind that I’ve not seen talked about much online.
Is it too much of a coincidence that the CEO of the most influential AI company, OpenAI, is also rolling out an identity solving cryptocurrency?
Think about it this way. As AI becomes ubiquitous the need for a micropayment mechanism gets stronger. If you need one small API call, why buy a subscription when the cost might be $0.001 or smaller. Using traditional fiat based payment mechanisms are too slow and expensive for this. Whereas crypto isn’t.
So, I have a feeling that WorldCoin could be the start of a convergence between AI and crypto. We’ll have to wait and see…but you heard it here first!
Meanwhile, the success of the WorldCoin cryptocurrency token ultimately depends on whether it can convince people to agree that it has value, a mighty challenge that few, if any, cryptos have overcome.
Further Reading
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Originally published at https://rickhuckstep.com on July 27, 2023.
