What Crypto Investors Need To Know About Worldcoin

As AI continues to dominate media debates, and capture the attention of venture capitalists, the CEO of Open AI – the company that introduced the world to ChatGPT – has launched an ambitious new project; Worldcoin
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. Following an unfortunate pattern that has begun to emerge, this cryptoasset is not available in the U.S. due to the regulatory environment, but is still making waves in the marketplace. With the price of the Worldcoin token jumping 20% on exchanges following its launch, there is clearly investor appetite and interest for this product, but that also raises the following question; how is this project different from the slew of other tokenized products that have launched recently?

One point worth highlighting is that Worldcoin has been developed with an explicit goal of helping humanity contend with the possibility that an Advanced General Intelligence (AGI) will enter the marketplace sooner than many experts might think. With the possibility of mass job displacement, real-time analytics available on all digital information, and the societal strife that could cause, planning for an AI-driven future makes sense.

An additional thing to note is that this AI-driven crypto project has been frank about the reality that – as of initial launch – the tokenomics are still somewhat murky. Altman has commented that at least at the beginning the idea is that individuals will choose to become part of the project out of interest in the concept. The team at Worldcoin is predicting that as financial benefits accrue from AI developments these benefits will be reflected in the price of token itself.

Let’s take a look at a few other aspects that potential investors should know about Worldcoin, and how it impacts the broader crypto conversation.

Worldcoin Is Hardware Driven

One aspect of the Worldcoin project that can unsettle some potential users is that the project is dependent on a hardware device that has been dubbed “The Orb.” This sleek and futuristic device is where the iris scan – the aspect of Worldcoin that caused the most controversy – takes place. Building on this concern, privacy questions continue to be asked about 1) what is done with this information, 2) how the deletion of this information is performed by the Worldcoin team, and 3) what this data will be used for as the ecosystem expands.

For instance, even if the data is immediately deleted currently, as the financial stakes become higher, the incentive to monetize user data will increase accordingly.

Worldcoin Needs AI To Work

In public commentary around the launch of Worldcoin, Sam Altman (co-founder) and Alex Blania (CEO) specifically attributed the integration of AI throughout the Worldcoin process as a critical component of its operation. While users have the option to enable Worldcoin to retain iris and other biometric information, the default setting is to prohibit this. The algorithms and AI tools employed by the firm allow the Orb to verify the location, iris information, and connection to existing Worldcoins (if applicable) in real-time without the need of maintain a standing record of this information.

Worldcoin seems to represent one the first, if not the first, crypto project that is almost entirely reliant on AI for its business model to operate as advertised while maintaining the levels of privacy it claims.

Worldcoin Is Connected To UBI

The concept of universal business income (UBI) has been a topic of increasing discussion, accelerated by the short-lived candidacy of Andrew Yang during the 2020 U.S. Presidential Election. Politics aside, the idea of UBI is that as automation and AI continue to take over increasing swaths of the economy and job market there is going to be a need for an enhanced social safety net for displaced individuals. Framed in a more optimistic framework, as AI and other automation tools take over large amounts of tasks and roles that are not popular amongst most employees, some of the wealth created should be widely distributed to the population.

Worldcoin and its operational charter algin directly with this vision, with the idea of UBI and distribution of tokens underpinning a significant part of the initial marketing and optimism for the idea. UBI as a political and economic tool is increasingly looking like something coming sooner rather than later; cryptoassets and technologies will need to be prepared.

Implications for Other Tokens

No singular token project is going to transform the cryptoasset space, but there are several implications that should be noted by investors and developers alike. These include but are not limited to the following. First, cryptoassets may have originated in the virtual space but the rapid rise of smart-hardware (such as virtual reality headsets) seems to point toward a future where tokens will need to be interoperable across a wide number of platforms. Second, AI will invariably go through the hype cycle that accompanies all emerging technologies, but the trend toward more widespread adoption of AI is inevitable.

To remain relevant, and capitalize on the synergies possible between AI and crypto projects, token developers will need to embed AI where possible. Lastly, to combat both the regulatory scrutiny that cryptoassets remain under, and the (justifiable) fears that some have associated with AI, developers will to proceed in a well paced manner that balances privacy, innovation, and functionality.

AI and crypto are changing the financial world every day, and Worldcoin provides an example (albeit imperfect) as how these dual forces can work together to accelerate these changes.