Opinion: Why token adopters should be cautious of Worldcoin
Written by Mel Gelderman
Posted on July 24th, 2023
Worldcoin is the talk of the token space after launching this week. Mel Gelderman shares his thoughts on the project.
Every so often, a new token project comes along and captures the whole market’s attention. This week, that project is Worldcoin. Led by OpenAI founder Sam Altman, Worldcoin has been the talk of Silicon Valley since it was announced in late 2021. Not all of the conversation has been positive. Worldcoin has an ambitious goal to solve income inequality and ID theft, but I think there are reasons to be cautious. Let me explain why.
A novel onboarding strategy 👁
Worldcoin has a controversial user onboarding strategy. If you want a Worldcoin ID, you have to scan your eyeballs into a machine called The Orb to verify your identity. In return for your biometric data, they’ll also give you some free WLD tokens. In some ways, this is a unique approach that makes Worldcoin accessible to all, potentially expanding the token population.
“Worldcoin has an ambitious goal, but there are reasons to be cautious.”
But the criticisms are difficult to deny. Some have said that Worldcoin’s iris-scanning machines are the stuff of dystopian nightmares, and it doesn’t look good that they’ve targeted users in impoverished areas of the world first.
Not only that, Worldcoin has backing from a host of Silicon Valley’s major venture capital giants. Token allocations for backers are not transparent, but we do know that the team will receive roughly 20% of the supply. It’s also worth noting that only 1.5% of the supply is circulating on launch, which could create sell pressure. This is not a grassroots movement like Bitcoin was.
A step back to Web2? 💻
It’s the idea of scanning human body parts that gets me, though. This is extremely personal data that could be sold on to third parties. Before tokens, centralization wreaked havoc in Web2 as a handful of powerful Big Tech entities took over. We saw the dangers of this when companies like Facebook sold on valuable user data to gain power. If projects like Worldcoin start to follow suit, I feel we could be taking a step backwards.
“If projects like Worldcoin copy Web2 Big Tech giants, I feel we could be taking a step backwards.”
To sum up, Worldcoin has lofty goals—and perhaps the team deserves credit for trying something new. But there are obvious risks. Tokens were created to set humanity free. I hope that we don’t forget that as new ventures like Worldcoin emerge.
Please note: Investing in cryptoassets is risky. Due to the volatile nature of the cryptocurrency market, investors run the risk of losing their funds when they make an investment. Returns from cryptoasset investing are not guaranteed, therefore users should always be aware of the risks.