Blockchain Capital fuels Worldcoin with $115m
Worldcoin, an ambitious crypto project co-founded by OpenAI CEO Sam Altman, has received a significant financial boost with the latest funding round.
On May 25, the technology company behind Worldcoin, Tools for Humanity, announced an influx of $115 million in series C funding led by Blockchain Capital, marking a crucial step in the project’s journey.
The latest funding round follows a successful raise of $100 million at a $3 billion valuation in March 2022, testifying to Worldcoin’s continued appeal despite the ongoing bear market in crypto.
The recent funding announcement marks a decisive moment for the project, with the funds poised to advance an array of initiatives, notably a new solution to the weakening bulwark of CAPTCHA tests against the relentless onslaught of AI-backed bots.
Bots have always been a bane for blockchain and cryptocurrency projects. Tools for Humanity hopes to stem this tide, borrowing from the success of similar endeavors like Civic.
Blockchain Capital General Partner Spencer Bogart says the lion’s share of this new funding will go towards bot detection, research and development, and broadening the Worldcoin project and its World App.
The crypto venture’s belief in Worldcoin’s vision is shared by illustrious investors such as a16z Crypto, Bain Capital Crypto, and Distributed Global.
The vision and the voyage
Founded by Sam Altman, the co-founder and CEO of OpenAI, and backed by a team of veterans from renowned firms such as the Electric Coin Company, Revolut, Uber, Block, Twitter, and Apple.
Worldcoin aims to establish a radical new model for global wealth distribution akin to a universal basic income (UBI). UBI is a social security system where all citizens receive regular money regardless of income or job status. It’s versatile, unconditional, and consistent.
Worldcoin operates on the Ethereum (ETH) blockchain and is centered around two core components: the Worldcoin token and the World ID.
The Worldcoin token is the digital currency that’s to be distributed to users worldwide. The World ID, meanwhile, is a unique digital identity tied to each user, secured and verified through a biometric process.
This identity verification is performed using a unique device known as the Orb. The Orb scans the user’s iris to verify their identity and confirm they are a unique, living human – a process known as proof of personhood. This check prevents one person from claiming multiple shares of the Worldcoin token and ensures fair distribution.
Controversies and concerns
Despite the grand vision of Worldcoin, implementing its unique identity verification method has raised a storm of controversy.
The mere idea of a tech company amassing a database of biometric data from billions of people worldwide naturally rings alarm bells for privacy advocates.
Worldcoin defends its approach by emphasizing that the actual iris images are destroyed post-verification, and the iris codes, which cannot be reverse-engineered, are the only data retained.
Yet, these assurances have done little to quell concerns, primarily due to a lingering mistrust of tech companies’ handling of personal data.
Influential voices, like whistleblower Edward Snowden, have expressed skepticism. Such public scrutiny presents a significant hurdle for Worldcoin, as it battles not only to prove the security of its technology but also to build trust with potential users who are wary of the increasing encroachment of tech into their personal lives.
Moreover, there are also fears around regulatory acceptance. With stringent data protection regulations like the EU’s General Data Protection Regulation (GDPR), Worldcoin might face challenges on a jurisdictional basis.
This risk becomes even more significant considering recent trends of countries like China and India taking a hardline stance against cryptocurrencies.
While Worldcoin’s ambitious vision is laudable, its path is strewn with significant challenges. Navigating these concerns while maintaining user trust will be paramount to the project’s future success.
How did the community react?
The conversation around Worldcoin on social media is ablaze with mixed opinions. It is a crucible of criticism, praise, and predictions.
Spencer Bogart, a partner at Blockchain Capital and a key player in the latest funding round, conducted an in-depth analysis of Worldcoin.
Initially, he confessed he saw Worldcoin as a “dystopian Orwellian nightmare” due to its mix of hardware, biometrics, crypto, and AI – components that naturally induce dystopian images. However, after extensive exploration, his perspective shifted dramatically.
Bogart emphasized that Worldcoin has innovatively tackled the age-old sybil problem with its World ID, which he hails as a “privacy-preserving primitive for the internet”.
Despite praising the Worldcoin team for solving hard problems, Bogart acknowledged the challenges that lie ahead and encouraged transparency and open critique.
Contrarily, some Twitter users have unleashed a barrage of criticism towards Worldcoin. One user dismissed Worldcoin outrightly, labeling it a “shitcoin” and expressing unwavering support for Bitcoin.
Similarly, another user voiced their concern over the substantial funding that Worldcoin has garnered.
The harshest criticism comes from a user who predicts that Worldcoin will be the “biggest dump-the-premine-on-retail in history.” They argue that the project is a meticulously designed scam, set to exploit the social justice angle to sell tokens worldwide.
Impact on the crypto space: a double-edged sword
While Worldcoin’s path is undoubtedly ground-breaking, its unique proposition might have positive and negative repercussions for the crypto landscape.
Its experiment with intertwining biometric identification and blockchain technology is laudable and might inspire a new wave of crypto projects. However, potential pitfalls lie in wait.
The effects could be far-reaching should the implementation of proof of personhood stumble. If Worldcoin fails to handle the vast biometric data it gathers responsibly and securely, it could result in breaches with serious implications, given the sensitive and personal nature of this data.
Such a failure could foster mistrust in similar projects aiming to integrate biometric identification into the blockchain, pushing the blockchain community to reassess the wisdom of linking real-world identity to crypto transactions.
On the economic side, Worldcoin’s attempt to deliver a universal basic income could reshape economic systems and lay the foundations for a truly global, inclusive financial network. But it also carries risks.
For instance, the value of the Worldcoin token needs to remain stable to provide a reliable universal basic income. However, as with any cryptocurrency, it’s exposed to market volatility, and any significant fluctuation in value could directly impact those who rely on it for income.
Furthermore, by creating and distributing a new token globally, Worldcoin could contribute to an already fragmented cryptocurrency ecosystem.
This fragmentation might lead to compatibility issues between cryptocurrencies and their respective blockchain networks, potentially hindering the broader adoption of crypto.
Lastly, given the cross-border nature of Worldcoin’s mission, the project could face regulatory hurdles. Countries with strict cryptocurrency regulations might not be amenable to a project like Worldcoin, potentially limiting its reach and impact.
In essence, Worldcoin’s journey symbolizes the broader crypto journey – a complex intertwining of immense potential and significant risk. And as the project sails into uncharted waters, it carries the weight of these dual aspects. Whether it soars or stumbles, its journey will leave an indelible mark on the crypto ecosystem.