‘It’s a little frightening’: Worldcoin surged 111% on its opening day. 2 experts explain why they would never scan their eyes in exchange for the crypto, and why they think the hype will fade.

  • Worldcoin, which uses proof of personhood, is surging in popularity.
  • But Web3 expert Isaac Patka says it could exploit vulnerable populations.
  • Geoffrey Arone fears that the ecosystem could be hacked or changed.

Worldcoin (WLD) has made headlines for its attempt to build its own financial network.

The cryptocurrency project, co-founded by OpenAI founder Sam Altman and launched on July 24, aims to create economic opportunities for everyone, no matter where they live. It also wants to build a system that can distinguish between humans and artificial intelligence, according to its whitepaper.

To accomplish this, small orb devices are being placed around the world where people can come to have their irises scanned. This enables the blockchain to generate an identification number based on the assumption that each user is a unique human. Users are then given a digital identity card that verifies their identity while keeping them anonymous. They also receive an initial 25 WLD tokens, which they may use to participate in project governance.

According to CoinMarketCap data compiled by Bloomberg, the WLD token increased from $1.70 to $3.58 on the first day, a gain of approximately 110.6%. On Tuesday, it was around $2.32.

While Worldcoin’s mission sounds admirable, some cryptocurrency experts are skeptical.

Isaac Patka, a former electrical engineer in the semiconductor industry who became a cryptocurrency developer in 2017, believes the hype will fade soon. Patka, a Web3 security expert, claims that this is not the first time a crypto has attempted to create a global identity network.

WLD, like other blockchain consensus concepts such as proof-of-work and proof-of-stake, is based on proof of personhood, which means that once the system determines that a participant is both a human and unique, everyone is eligible.

While the overall structure has good intentions, Patka believes it is quite risky, especially for vulnerable populations. People could be exploited by signing up to have their irises scanned and then selling their accounts for a small fee in exchange for giving up their identity, according to Patka. He referred to Worldcoin’s whitepaper, which stated that while an authentic person must create one ID, that ID can be transferred in exchange for money. As a result, fraudsters may be able to hold multiple Worldcoin IDs.

The project’s whitepaper addresses these concerns by recommending that additional measures be added to the authentication process, such as phone-based facial recognition, iris re-scanning when necessary, or the ability to reclaim an ID.

A request for comment from Worldcoin was not returned.

‘It’s a little frightening’

Patka, who is also the co-founder and CTO of Shield3, an AI-driven threat detection system trained on blockchain interactions to detect vulnerabilities, believes that when people give away their identities, they have no idea what they are getting themselves into.

Geoffrey Arone, co-founder and CEO of Shield3, and a founding partner at Arrington Capital, a Web3 investment firm, describes the situation as “a little frightening.” Because you’re trusting that information in a repository by putting everything in a database, Worldcoin is ripe for so many problems, he added.

The Worldcoin website claims that once the biometric data is used to prove your uniqueness to create an Iriscode, which is a set of numbers generated by the Orb, it is permanently deleted. Unless the user consents to data custody. There is no other personal identification data associated with the number. In exchange, users receive a “World ID” that serves as proof that they are human and allows them to remain anonymous online. However, Arone, who also founded MyID.com, an identity management tool purchased by Experian in 2011, says that while this sounds great on the surface, it’s simple to triangulate a few data points to pinpoint a person’s identity. As a result, he would not scan his iris for worldcoin.

You’d have to trust that the data would be completely erased. However, systems fail, according to Arone. For example, malicious entities could hack the system before erasing the data. Alternatively, if there is ever a security breach, the information could be stolen.

Arone told Insider that he already uses an eye scan for travel through Clear Plus, which allows him to bypass airport security faster. He sees more widespread applications for iris scans, such as gaining access to buildings. Giving up your iris to any system, however, could result in a web of data points, he added.

Users must remember how blockchains work in this context, according to Arone. Data on blockchains, unlike that of a company or centralized entity, is decentralized and immutable. He continued, “It’s an egg you can’t unscramble.” So you can’t go back if you do this.

“There is no way to be forgotten in a system.” “What I mean is, if you use a blockchain, it gets written to the blockchain,” Arone explained. “For example, if you look at the blockchain for Bitcoin or Ethereum, it contains every single transaction that has ever occurred.” You may not be able to determine who did it. But you know, without a doubt, that six years ago, someone might have bought something from a friend for half a bitcoin that will always be there.”

You also run the risk of system changes, Arone added. Even in democratic structures, this can occur. He observed that the rules governing a system could change, either by majority consent or by a bad actor abusing the governing rules.

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