Not to be confused with another namesake already in use, Sam Altman’s cryptocurrency Worldcoin has not been launched yet. The young entrepreneur’s plan is becoming controversial already due to concerns pertaining to security.
Altman’s startup is developing an orb-shaped, basketball-sized device that will scan people’s irises; in exchange would provide them with a share in the cryptocurrency Worldcoin. No matter how scary the entire biometric collection system sounds, entrepreneur and investor Sam Altman’s motivation comes from the Universal Basic Income economic theory that supports equitable distribution of money through sound and accessible financial systems. Altman’s approach is indeed utopian but how the company will resolve issues related to security and logistics will ensure its practicality and usefulness.
Sam Altman is known as the startup ‘kingmaker’ in Silicon Valley and has been instrumental in kickstarting several startups. At only 19 years of age, he started the mobile Loopt with specific location-based social networking features. He also was heading the American seed money startup accelerator Y Combinator, and currently serves as the CEO of AI research company, OpenAI, funded by Elon Musk.
About the Worldcoin Cryptocurrency
Altman is just one of the 3 founder members of the company; the others being 27-year-old theoretical physics student, Alexander Blania, and Max Novendstern, who formerly was a part of Ray Dalio’s investment firm Bridgewater Associates LP. He also worked at the money-transfer startup Wave. The company has already gathered investors among the likes of venture capital firm, Andreessen Horowitz, LinkedIn founder Reid Hoffman and Day One Ventures although a formal opening about this new digital currency is still awaited. New Worldcoin has raised about $25 million from these investors to date.
According to Blania, there are around 20 prototypes in use across undisclosed cities around the globe. As the Worldcoin crypto is not yet available for exchange, the company is providing Bitcoin to its volunteers. Currently, the orb-like device costs around $5000 but Blania is confident the prices will come down as soon as the process is polished further. One of the major reasons why the founders support biometric collection is to avoid the risk of one person trying to sign up with different accounts and create his/her duplication.
Concerns and Justifications
The biggest worry that such an identification system brings along is the privacy of stored data. Though the founders have stressed the conversion of these scans into unique numerical identifiers and deletion of stored scans forever through secured online methods, the possibility of data theft or data interception in the process is enough to raise apprehensions. Another criticism the startup is facing relates to the focal benefit that all cryptocurrencies strive towards – decentralized block-chained based technology. Some amount of central authority would be required to make payments against the biometric information. This would just be in contrast to the principles all cryptocurrencies hold.
Storing information in the form of biometrics is not a new thing as many governments and companies have tried the same in the past. India’s AADHAR system relies completely on the storage of these biometric elements to disburse government-based financial help. However, it too has faced issues of privacy in the past. Cryptocurrencies are a developing industry and whether or not they would completely replace the traditional transaction route is still years ahead of being answered. It is a dangerous decision to trade such sensitive information, which if compromised in the process, can never become valid again. This is too much of a risk for a cryptocurrency that might or might not work in the future.