worldcoin review

Worldcoin $WLD has been the hype lately, and why not? $WLD token launched on July 24th at 15 cents and mooned 1500% to touch $5.05 in a couple of hours. 

As one of the most hyped AI projects, the $WLD token was listed on top-tier exchanges like Binance, bybit, Huobi, and more.  But, within 2 days of the launch, the project is finding itself in the middle of some big controversies:

  • Controversy #1: Ethereum founder pointed out 4 big risks associated with Worldcoin.
  • Controversy #2: It seems that one of the biggest crypto fraudsters is one of the earliest investors in Worldcoin.

And the list of controversies goes on. So, should you actually go all-in on Worldcoin because of its OpenAI connections or should you stay away? Let’s find out.

What is WorldCoin?

After years in development, Worldcoin, the ambitious cryptocurrency & digital ID project by OpenAI chief Sam Altman, launched on Monday. The project promises to verify public identity by scanning their eyes. Thus it offers a potential way to combat bots and false accounts online.

The Worldcoin Protocol launched after migrating to the OP Mainnet, previously known as the Optimism layer-2 blockchain, and the Worldcoin’s native token WLD surged on Monday. The team then released a whitepaper explaining its tokenomics. And to be honest I have some big concerns about it. Why?

Let me break it down for you. Oh but before I give my opinion let’s see why is Vitalik calling out Worldcoin to be a Big Risk.

Worldcoin Controversies 

1) Worldcoin co-founder, Alex Blania, refused to disclose the token’s distribution model: A video surfaced on Twitter in which Alex Blania, during a recent Bankless interview alongside fellow co-founder Sam Altman, refused to respond to the host’s question on Worldcoin’s token distribution, citing the regulatory uncertainty in the US as why he couldn’t answer the question.

2) Snowden took to Twitter to criticize Worldcoin’s retinal scan plans.

Worldcoin aims to be a financial and identity network. It has an app for payments and uses biometric data harnessed from shiny, metal orbs to create so-called World IDs in a way that’s generated controversy. Snowden took to Twitter to tell his 5 million followers his issues with Worldcoin: the use of the human body for crypto:

Worldcoin says the original image of each user’s eyes: “will not need to be stored or uploaded.” But Snowden points out, “You save the hashes produced by the scans. Hashes that match future scans. Don’t catalog eyeballs.” Snowden continued in his thread: “We use ZK-proofs!” Great, clever. Still bad.

The human body is not a ticket-punch.” Many on Crypto Twitter have lampooned the concept, including predicting an inevitable data leak that could result in biometric information being leaked and sold around the internet. Others have pointed out there’s no guarantee the data will not get into the hands of third parties.

3) Vitalik thinks the World ID might be misused

The Ethereum co-founder tweets an article and argues that an effective, reliable proof-of-personhood system, like Worldcoin, “seems very valuable,” but warns there are big risks in the race to develop.

So, the first concern relates to privacy and the act of scanning someone’s iris. Buterin fears this could capture much more data than meets the eye, including a person’s sex, ethnicity, and even certain medical conditions. 

Buterin’s most practical argument concerns accessibility, and how likely it’s going to be that everyone who wants a World ID can get one. Even If Orbs does become prolific, he believes the headaches wouldn’t stop here. 

He pointed out that there’s nothing to stop a government from banning Orbs in their country—or using this technology to coerce citizens. 

His third concern was about centralization: “If even one Orb manufacturer is malicious or hacked, it can generate an unlimited number of fake iris scan hashes, and give them World IDs,” Buterin warned. Fourth about security: 

He believes an “unlimited amount of identities” could be generated if Orbs mistakenly approves the irises of AI-generated photographs or 3D prints of fake people. 

There’s also a danger of someone selling on or renting their World ID to someone else—or losing it after a phone hacking. He concluded by stressing he believes a world without proof of personhood also has dangers—and said building a robust system won’t be easy nor quick.

4) FTX founder SBF, the one considered to be the biggest crypto fraudster is One Of Worldcoin’s Earliest Investors.

As Duo Nine rightly said in his tweet “Buying those coins is giving a fraudster money at this point.” Now I will come to my personal doubts and opinions.

My Personal Doubts about 

WLD trades at $2.19, reflecting a 30% gain on the day. Despite criticism from nearly every corner of the crypto sector. As a trader, my area of concern is WLD’s circulating supply versus its supply cap. 

With only 1% of the total supply currently in circulation, with $WLD there is a high real dilution risk. Because of the moment more coins are added to circulation. Its value will decrease, especially if fresh demand doesn’t come in to prop up the price. But the issues don’t end here. 

Try and understand this. The maximum supply of the $WLD token will be fixed at 10 billion WLD for at least the network’s first 15 years. But, after that in the year 2038, an inflation rate of 1.5% could be instituted by voters. We have seen in the past that tokens with an inflationary model do not do well. 

Of the token’s circulating supply, 43 million was set aside for early users. And 100 million were loaned to five market makers outside the US. This is a considerable risk. Let me explain. These loans have a duration of three months and give market makers the option to purchase WLD tokens instead of returning the loan.

But let’s say these market makers do not see a huge market demand of $WLD, they will easily dip the price and then buy it back. What could be in store for token holders like you and me?

We have no incentive to either facilitate liquidity or hold on to those tokens. In the very short term, there likely could be some price stability because of liquidity supported by the market makers. But in the medium to long term, that is speculative at best.

For the time being, I won’t invest in WLD or use the Worldcoin app unless more clarity on these concerns is provided by the organization.

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