Worldcoin (WLD) was CoinMarketCap’s most trending cryptocurrency on 27 July 2023. Conversely, Worldcoin is one of the worst cryptocurrencies I have seen.
Yet Mr. Market disagrees with my opinion of Worldcoin. CoinMarketCap gave WorldCoin a Coin Price of $2.10, a Market Capitalization of $231.789 million, a Fully Diluted Market Cap of $20.924 billion and a 24-Hour Market Volume of $178.450 million on 27 July 2023. Moreover, Worldcoin was CoinMarketCap’s 123rd largest cryptocurrency on 27 July 2023.
Thus, some traders and speculators think Worldcoin has value. Others will remember Benjamin Graham’s old canard: “Mr. Market is insane.” Thus, skeptics will wonder is Worldcoin for real, or the latest example of Mr. Market’s insanity?
So What is Worldcoin (WLD)?
Worldcoin (WLD) is a routine decentralized finance (DeFi) product that is attracting enormous attention because of a celebrity connection and a sensational piece of technology.
The celebrity is OpenAi Chairman Sam Altman. Altman is a Silicon Valley Maverick known for co-founding, Loopt, YCombinanator, and OpenAi. One reason for Altman’s popularity is his association with OpenAi partner Elon Musk. In 2023, OpenAi is attracting enormous amounts of attention because of its popular ChatGPT, artificial intelligence (AI) product.*
The sensational technology is the Orb. There’s nothing revolutionary about the Orb, it is just a digital camera that cans your eyeballs. To elaborate, the orb takes pictures of your iris.
The Orb is hardly revolutionary. I remember, a similar gadget in the 1983 James Bond movie Never Say Never Again. However, the Orb is shiny and silvery and looks like a prop from Black Mirror. Consequently, Business Insider describes the Orb as “creepy and dystopian.” Hence, the media is giving it enormous amounts of coverage.
WorldCoin is not Unique
The Orb’s pictures become part of Altman’s WorldID. Worldcoin operates Orb eyeball-scanning operations in 20 countries, Reuters claims.
WorldID is a global identity network. Worldcoin’s whitepaper claims “Using World ID, individuals will be able to prove that they are a real, unique human to any platform that integrates with the protocol.”
This capability is not unique. I have seen many DeFi protocols that offer similar capabilities. For example, WhiteBIT (WBT) requires Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) compliance from all customers. People who understand finance will note that WhiteBIT KYC and AML compliance are more rigorous standards than Worldcoin’s “proof-of-humanity.”
Moreover, many countries’ laws and financial regulators require KYC and AML compliance. For example, the FDIC requires KYC and AML to open a bank account in the United States. To explain, KYC requires financial institutions to verify customers’ identity and humanity. Meanwhile, AML regulations try to keep crooks from using the financial system to launder dirty money. For example, drug deal proceeds.
I see no evidence that WorldCoin complies with KYC and AML. Hence, WorldCoin’s proof-of-humanity could be useless.
Are Sam Altman and Worldcoin full of bullshit?
Cynics will wonder if Sam Altman and his publicists are full of bullshit. I think some of their claims are impossible.
The WorldID does not contain the Orb’s Iris pictures. Hence, the WorldID does not provide proof-of-humanity. Therefore, I think WorldID and Worldcoin could violate some KYC and AML regulations. Thus, I have to wonder what use Altman’s Worldcoin has?
Moreover, there are allegations Worldcoin and WorldID are not secure. For example, BlockBeats and Gizmodo claim there is a black market for the Orb’s iris pictures.*
Hackers have stolen Worldcoin Orb operators’ passwords, TechCrunch alleges. TechCrunch claims hackers used the Redline Information Stealer malware to swipe the passwords. Plus, TechCrunch alleges the Orb operator dashboard does not require multi-factor identification. Hence, I think the Orb violates KYC and AML laws that require multifactor identification.*
Are Worldcoin (WLD) and the Orb Illegal?
If these claims are true, they show crooks have already hacked the Orb and WorldID. Furthermore, it shows Worldcoin’s claims the Orb erases Iris scans could be fake.
Predictably, the Information Commissioners’ Office is investigating Worldcoin, Reuters claims. Reuters describes the Office as Britain’s data regulator. Hence, Worldcoin could already be in trouble with His Majesty’s Government.
Moreover, the US Federal Trade Commission (FTC) is investigating allegations of illegal public data scraping and false information at another Altman company, the Associated Press reports. The FTC is investigating allegations OpenAi’s ChatGPT violates federal consumer protection laws. An FTC document alleges OpenAI could be “engaged in unfair or deceptive privacy or data security practices,” The Washington Post claims.*
Altman’s companies have a history of data violation allegation. Thus, cynics will wonder if Worldcoin is a data-scraping operation? To elaborate, data-scraping is the gathering of enormous amounts of data to sell. The Information Commissioner’s Officer investigators suspect it is.
Worldcoin does not achieve its goals
I think WorldID’s goal of a “decentralized proof of personhood protocol” is an invitation for hackers. Media reports show the bad guys have accepted the invitation.
Note: I strongly support Worldcoin’s goal of a universal basic income (UBI). However, I think governments the people elect and not decentralized networks or private companies should distribute basic income. There is something inherently undemocratic in a basic income a platform, a wealthy tech tycoon controls distributes.
Hence, I think Worldcoin violates its supposed goal of counteracting the concentration of economic power. Instead, Worldcoin concentrates economic power in private businesses and shadowy nonprofit organizations under the control of egocentric tech tycoons. Worse, Worldcoin creates an unregulated private network that criminals can use to steal money and data.
Sam Altman and Worldcoin (WBC) are full of bullshit
Thus, Sam Altman and Worldcoin are full of bullshit. The goals are noble, but the execution is shoddy and dishonest.
Consequently, speculators need to avoid Worldcoin (WBC) because regulators will shut it down and criminals will corrupt it. My prediction is Worldcoin will collapse after a speculator data breach leading to regulatory action, a price crash, and lawsuits.
In the final analysis, all Worldcoin proves is that rich egomaniacs who can hire clever publicists can portray any questionable protocol as valuable and groundbreaking. Worldcoin doesn’t show that Mr. Market is insane. Instead, it shows that Mr. Market is gullible.
*https://en.wikipedia.org/wiki/Sam_Altman
*https://www.businessinsider.com/sam-altman-worldcoin-orb-photos-2023-7
*https://whitepaper.worldcoin.org/
*https://gizmodo.com/worldcoin-black-market-iris-data-identity-orb-1850454037
*https://apnews.com/article/openai-chatgpt-investigation-federal-ftc-76c6218c506996942282d7f5d608088e
*https://www.washingtonpost.com/documents/67a7081c-c770-4f05-a39e-9d02117e50e8.pdf?itid=lk_inline_manual_4
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