What is Spark (SPK)?

TL;DR

- Worldcoin aims to establish an open-source protocol that combines blockchain technology, artificial intelligence, and the basic income concept to provide a sustainable and fair income solution globally.

- It introduces World ID (global ID), Worldcoin (global currency), and World APP, a wallet carrying ID and currency.

- Over 2 million users from around the world completed iris verification on Orb between May 2021 and July 2023.

- Positioned at the intersection of blockchain and artificial intelligence, Worldcoin holds significant innovation and potential.

Worldcoin, a crypto project founded by OpenAI CEO Sam Altman, has captured considerable attention within the crypto community. On July 24, 2023, Worldcoin announced the launch of its native token, WLD, which instantly became the focal point of crypto community discussions.

However, as the price of the WLD token surged and then retraced after its launch, debates surrounding Worldcoin's vision, fairness in token issuance, arbitrary changes to token models, and privacy/security issues have gained momentum within the community. Despite its aura as a flagship project, Worldcoin's debut has stirred considerable controversy within the crypto community. Several prominent crypto industry KOLs, including Ethereum founder Vitalik, have expressed their viewpoints on social media.

So what exactly is Worldcoin? Why has it ignited discussions among influencers? What underpins Worldcoin's value? This article provides an in-depth exploration of the prominent project, Worldcoin.

What is Worldcoin (WLD)?

To understand Worldcoin, we first need to grasp the issue it aims to address.

According to a McKinsey Global Institute report, over 4.4 billion people lack legal identity or digital identity verification means. Worldcoin's vision is to establish a massive, equitable digital identity and currency system, utilizing iris scans of individuals worldwide for identity validation. This forms just the initial step. Subsequently, Worldcoin seeks to create an open-source protocol centered around global economic participation, integrating blockchain, artificial intelligence, and the basic income concept to offer a sustainable and fair income solution for all.

In essence, Worldcoin aims to materialize the concept of UBI (Unconditional Basic Income).

How Worldcoin Works

To fulfill its goal of providing equitable and sustainable global income, Worldcoin introduces World ID (global ID), Worldcoin (global currency), and World APP, a wallet accommodating ID and currency.

World ID: A privacy-centric digital identity with unique attributes.

Worldcoin: The first WLD token freely distributed to 1 billion people globally.

World APP: A wallet facilitating global payments, purchases, and transfers.

These components interact with Worldcoin's tokens, digital assets, and conventional currencies, enabling transactions like payments, purchases, and transfers.

What is Orb?

Worldcoin envisions fostering a digital economy for universal participation. To ensure equitable token distribution, Worldcoin plans to airdrop tokens to 1 billion people worldwide.

How can token distribution's fairness be guaranteed? Each individual can register only one wallet in the network to prevent multiple registrations. For this purpose, Worldcoin developed a biometric device named Orb, distributed worldwide. It verifies unique personal information of users by scanning their irises, ensuring each user possesses a singular digital identity.

(Orb hardware device; Source: Worldcoin official website)

Presently, Worldcoin has deployed approximately 1500 Orb devices across over 30 cities in more than 20 countries to meet global demand for World ID verification. Between May 2021 and July 2023, over 2 million users globally underwent iris verification on Orb.

Worldcoin's Token Economy

On July 24, 2023, Worldcoin announced the launch of its token, WLD, with a capped initial supply of 10 billion. 75% of tokens are allocated to the Worldcoin community, mainly distributed to users, with a portion designated for the eco-fund and network operations. The remaining 25% is divided between Tools for Humanity (TFH) investors and the initial development team.

Currently, around 143 million WLD tokens circulate. Among these, 43 million WLDs are allocated to users who completed Orb verification during the project's Pre-Launch phase, while 100 million WLDs are loaned to market makers operating outside the United States.

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Worldcoin Sparks Community Controversy

Despite its prominent status, Worldcoin has ignited considerable controversy within the crypto community post token launch. Discussions around token distribution fairness, privacy and security of iris data collection, potential for the grand vision's success, have taken center stage among crypto users:

Dispute #1: Privacy and security

While digital identity systems are invaluable, is capturing unique biometric features through the Orb device truly necessary? Although Orb devices generate a one-way irreversible meaningless hash code as a unique identifier for each individual's iris during data collection, without directly uploading the iris information, it's important to note that no technology is entirely immune to breaches, especially when collected data represents unique biological attributes. Despite high hurdles to malicious intent, the risk persists, warranting careful consideration.

Dispute #2: Token distribution

Worldcoin initially announced a 20% token allocation to Tools for Humanity (TFH) investors and the initial development team in 2021. However, the latest whitepaper increases this allocation to 25%. Worldcoin attributes this change to the network's more complex and costly development compared to TFH's initial expectations. Consequently, in the modified token economy, more low-cost tokens will flow to project owners and investors rather than the community. Moreover, World ID requires offline iris scans, limiting participation for most users without access to such verification methods. As a solution, Worldcoin twice issued commemorative NFTs for ‘early engagement’. However, these NFT holders didn't receive token airdrops, leading to strong dissatisfaction. Radical users question whether a true UBI project should reserve tokens for its team. If successful, investors and the development team could own a quarter of the global WLD supply.

Some investors consider Worldcoin's vision, as outlined in its whitepaper, overly ambitious. In the current context, Worldcoin indeed faces a lengthy journey. Founder Sam responded on social media, "Like any really ambitious project, maybe it works out and maybe it doesn't, but trying stuff like this is how progress happens." Perhaps, it's best to view it as a social experiment.

Closing thoughts

Worldcoin, founded by Open AI's creator, resides at the intersection of blockchain and artificial intelligence. It may well unveil substantial innovation and potential. Emerging entities inevitably encounter challenges and controversies. Much like Bitcoin faced various doubts since its inception, this doesn't hinder development. Worldcoin might be a mere social experiment or a force reshaping the world in the distant future — perhaps that's what makes it most exciting.

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