A Brief Introduction of Worldcoin: Proof of Unique Humanness on Blockchain

Based on Wikipedia, Worldcoin is an iris biometric cryptocurrency project developed by San Francisco- and Berlin-based Tools for Humanity. Founded in 2019 by OpenAI chief executive Sam Altman, Max Novendstern, and Alex Blania.

But if I try to define it with one sentence:

Worldcoin is what Bitcoin should have been.

Bitcoin was fundamentally conceived as a form of equitable currency not issued by governments but by the community itself. The system eliminates the need for central servers by operating on a peer-to-peer basis. Instead of relying on complex central banking policies, currency generation is governed by a straightforward algorithm. Roughly every ten minutes new bitcoins are created, and through a sort of lottery system, it's determined who receives them. Statistically, this lottery would result in an even distribution over time. The primary issue, however, is the system's complete anonymity, making it impossible to ensure that a participant only enters the lottery with a single ticket. Bitcoin's solution to this problem is the Proof of Work (PoW) mechanism, which requires a certain amount of computational effort for each lottery ticket. However, this leads to a scenario where those with greater computational power have a higher chance of winning, setting a clear path to the inevitable outcome. As usual market dynamics kicked in, nodes began to form groups, and individual nodes stood no chance of winning. Today, less than ten mining farms dominate the network, and thanks to ETFs, Bitcoin has merged into the traditional financial system, becoming just like any other financial instrument. Nothing remains of the anarchist hippie dream; due to its immense energy consumption, Bitcoin is more detrimental to the Earth than beneficial.

Worldcoin solved a problem that Bitcoin could not, namely how to ensure the uniqueness of participants while keeping the system anonymous (Proof of Unique Humanness).

The Orb

To solve the problem, the Worldcoin team developed one of the world's best iris scanners, the Orb.

Just like fingerprints, the iris is unique for every individual, making it perfect for proving the uniqueness of a member within a community. Similar to other biometric identification systems, the Orb generates a feature vector based on the iris. This feature vector is characteristic of the individual but does not allow for the recreation of the iris image, ensuring its security (akin to a hash). When we want to identify someone, we regenerate this feature vector. If it closely resembles the original vector within a certain margin (typically cosine distance), the identification is deemed successful. But how does the system remain anonymous?

World ID: anonymous proof of personhood

World ID is a protocol to bring privacy-preserving global proof of personhood. To achieve this, it utilizes the Semaphore library, which is based on zero-knowledge-proof technology. Since I have a full article on Semaphore, I will only briefly describe the system's operation here.

The user generates an Identity Commitment, which Semaphore stores in a Merkle tree. Each Identity Commitment is unique and can have multiple Nullifiers associated with it. To generate a Nullifier, a unique public External Nullifier is required. For each External Nullifier, only one Nullifier can be generated. Thanks to zero-knowledge proof technology (on which I also have a full article), it can be proven that a generated Nullifier corresponds to an Identity Commitment without revealing the Identity Commitment itself.

Let's see how this works in practice using the example of an anonymous voting system. The goal is to ensure that every person with a World ID can only vote once.

When a World ID is created in the World App, a unique Secret, and the corresponding Identity Commitment are generated. When someone is identified with the Orb, this Identity Commitment is recorded on the blockchain along with the iris hash, ensuring that a person can only register a single Identity Commitment. Essentially, the Identity Commitment acts like a public key, while the Secret is the corresponding private key used to authenticate Nullifiers. When voting begins, an External Nullifier is generated, serving as the unique identifier for the vote. Each time a vote is cast, the voter generates a Nullifier associated with this External Nullifier and submits their vote. Since only one Nullifier can be generated for each External Nullifier, an individual can only cast one vote. The Nullifier cannot be linked to the Identity Commitment in any way. If another vote is organized, it will have a different External Nullifier, for which the voter will generate a new, unique Nullifier that is completely independent of the one generated for the previous vote. Of course, this solution can be used in any case that requires unique anonymous registration.

Use cases: defense against AI bots, Unconditional Basic Income, and Karma money

Many might wonder why a blockchain project is interesting to Sam Altman, the CEO of OpenAI. With the advancement of AI, it's becoming increasingly difficult to distinguish bots from humans. There is a genuine concern that, with the help of advanced LLMs, targeted fake information spread on social networks could influence political elections or even the stock prices of companies (as envisioned by the computer in West World). This is the primary reason why OpenAI does not release the source code of ChatGPT (at least that's what they claim). A defense against this is to somehow be able to distinguish bots from humans, for which World ID offers an excellent solution.

Another typical AI-related use case is Universal Basic Income (UBI). Increasingly, serious consideration is being given to what might happen if, thanks to AGI and humanoid robots, nearly all human-performed work could be replaced by machines. The traditional work-based society would become inoperable, necessitating an alternative approach. Many believe that UBI, where everyone receives income on an unconditional basis instead of through employment, could be the solution. A version of this that operates beyond the control of governments could be a blockchain-based solution, functioning similarly to Bitcoin, but with the generated coins being distributed fairly among people. This wouldn't require massive computational power and significant amounts of energy; proving that we are real humans would be sufficient. The Worldcoin whitepaper specifically mentions the possibility of such a system, with a portion of Worldcoin's WLD tokens being distributed in this manner. However, a separate system dedicated solely to UBI, potentially with its own blockchain that anyone with a World ID could participate in operating, is also conceivable. Similar to Proof of Stake, each block would be authenticated by a node chosen at random, but here the stake is our own identity. This is the hypothetical network I mentioned in the introduction; this would be the "ideal Bitcoin."

Finally, let me explain why Worldcoin and World ID started to interest me personally. I recentlypublished a concept called Karma Money (GitHub repo), which operates similarly to the current fiat money system. Currently, banks create fiat money, which generates significant profits for them through interest. In 2008, we saw how poor decisions by banks could devastate the global economy, which also spurred the creation of Bitcoin. In the Karma Money system, individuals and companies lend to each other directly, bypassing banks (P2P lending). Transactions and members' debts are public, so everyone has a reputation. Based on this information, we can decide whether to lend to someone (accept their money) or not. In such a reputation-based monetary system, it's crucial that we can link individual participants' wallets to their identities. Without this, if someone were heavily indebted, they could simply switch wallets and start trading anew with a clean slate, never repaying their debts. However, if the wallet is linked to a World ID, then participants cannot hide their debts. This system could even complement the previously mentioned Universal Basic Income system, where we could spend not only from the income received as UBI but also from credit.

To summarize the above, I believe that Worldcoin is a very exciting project, and if it fully achieves its set goal, namely to become 100% open-source and decentralized, it could become as significant as Bitcoin. Moreover, as I mentioned in the introduction, Worldcoin could be what Bitcoin should have been!