Author: Austin Barack; Translation: Shenzhen TechFlow
Blockchain technology has opened the door to new applications, use cases, and global coordination. Bitcoin, launched in 2009, laid the foundation for today’s Web3. Bitcoin is open to anyone and can be obtained through proof of work mining or purchase, introducing the world to digital, non-sovereign, and censorship-resistant currency for the first time. Ethereum, launched in 2015, achieved programmability of blockchain interactions through smart contracts, ultimately giving rise to the development of DeFi, NFTs, resource networks, stablecoins, payment applications, on-chain games, DAOs, and more.
However, despite all these incredible innovations, two elements are still needed to complete this puzzle: verifiable human uniqueness and means of globally fair distribution of network ownership, which are interconnected in many ways. This is why we are so fascinated by the unique vision of Worldcoin and its founder.
Worldcoin solves one of the fundamental problems in decentralized technology, preventing Sybil attacks and eliminating all negative externalities. CoinFund, in February 2021, made the first investment and became one of the earliest supporters of Worldcoin, and we still believe in the profound impact of the innovations of the Worldcoin network on global digital coordination, financial inclusiveness, and billions of people entering the crypto economy.
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Worldcoin started with this question: How can you prove that you are a unique human being in a digital environment while maintaining anonymity and privacy? There are many reasons for asking this question, but the real impetus behind it is how to distinguish artificial intelligence from humans as AI continues to advance. The answer quickly became apparent: it is both a hardware problem and a network-level problem. There needs to be a device to onboard users (register them to non-custodial wallets and distribute network assets) while ensuring that each user can only register once. And it must be 100% privacy-protecting. With this idea in mind, Worldcoin developed an advanced hardware device from scratch, which can determine human uniqueness through a reliable mechanism – iris biometrics.
In less than 30 seconds, the Worldcoin Orb captures the individual and unique iris patterns of users, converts the patterns into hash values (iris codes) using neural networks, and permanently deletes the original biometric data (user iris images). The iris codes are not associated with any personal information of the user (nor with the user’s wallet), and are only used to prevent users from attempting to register again, as repeated registration would generate the same iris code. Through this novel onboarding mechanism, a unique proof of personhood that protects privacy is created.
Why is unique personhood proof so influential?
In a purely digital environment, being able to prove that a user:
1) is human rather than a robot,
2) Participate only once instead of multiple wallets/accounts,
3) No need for users to share government identification or other forms of private identity information,
can expand the scope of digital native interaction by several times. Here are some direct applications, as well as many other applications:
“One person, one vote” in DAO, instead of voting based on token ownership. Proof of personhood prevents users from conducting vote manipulation through multiple wallet addresses. Actual result: token supply can be subject to fair democratic voting, without being controlled or disrupted by large holders in all cases.
Verification of user privacy in social media applications. This prevents users from creating spam social media accounts without requiring users to verify with their phone number or other personal identity information. Clear application: clearing out bot accounts on Twitter.
Fair airdrops. It can prevent witch attacks and unfair airdrop harvesting when distributing network governance assets to early users in the crypto network. Actual result: more efficient customer acquisition for the network as they retain more genuine users.
Efficient distribution of value globally, not limited to the borders of a single country, while protecting user privacy (their identity proof is not tied to their real-world identity or personal information).
For the above application cases as well as many future cases, privacy protection is a fundamental innovation that resonated with CoinFund, and we believe it is a critical factor that needs support. Although there are other similar solutions, we clearly see that Worldcoin’s hardware approach has the lowest error rate among these methods.
Fair distribution of network assets globally
Through Worldcoin Orb and World ID, which provide privacy protection and unique personhood proof, fair distribution of digital assets globally becomes possible. Cryptographic assets have traditionally been accumulated through purchasing assets and/or participating in networks. As a result, those who purchased at lower prices or those with more capital to purchase more assets are able to accumulate a larger proportion of network assets compared to later users. This dynamic discourages later users as they feel they are “late” and constantly seek the next network to participate in early, rather than necessarily participating in the most useful network.
Through personhood proof and Orb as an access mechanism, each Worldcoin user can receive roughly equal amounts of WLD tokens regardless of when they registered. This means that each user is an “early participant” and all users can have a similar impact on the development and governance of the network. Additionally, this applies not only to WLD, but as a platform, Worldcoin can also become a distribution network for other assets. Through this fair launch dynamic, the free distribution of governance tokens incentivizes user registration, and WorldID has powerful identity verification capabilities. We believe Worldcoin has the opportunity to bring billions of users into the crypto space and bring the benefits of financial inclusion and global connectivity.
It has been two and a half years since we became interested in Worldcoin’s ambitious vision. Although Worldcoin has attracted over two million users (as of July 23, 2023, the data is 2,060,888 people and still increasing), we feel that this is just the beginning. Worldcoin has the potential to bring billions of users and more into the crypto field in the real world, and we believe it will happen. Proof of Human Work, combined with privacy protection, is a fundamental and transformative innovation. Coupled with the fair distribution of network assets on a global scale, we are eagerly looking forward to the future development.