Worldcoin is a cryptocurrency on a mission to put its tokens “in the palms of a billion people” — perhaps eventually, every human on Earth. The company is building a privacy-preserving proof-of-personhood protocol (“PPPOPP”) with the ambitious objective of onboarding billions of people into the world of crypto and web3 via the worldcoin app and wallet. As per the mission, it will give these people free money in the form of worldcoin tokens (“WLD”) to get on board, and that is just the beginning.

Since the company was publicly announced via Twitter on October 21, 2021, it has been bombarded by skeptics. Some of these skeptics may be genuinely concerned. Others seem superficially motivated by the status-upping satisfaction of scoring a “kill”. Regardless, my objective in writing this particular piece is not to explore what could go wrong. Plenty of others have done that already. Rather, I will operate under the assumption that the team behind Worldcoin is sincerely seeking to build something useful and good for the world, that their reasoning is reasonable, that their technologies are (or will be) about as functional as they’ve been described, and that this big bet that they can get a billion users could actually work. In layman’s terms, I will give them the benefit of the doubt.

How does it work?

So, how does Worldcoin actually work? Here is how it works from a prospective user’s point of view. First, you have to go out in the physical world and find a representative of Worldcoin who has the ability to onboard you to the protocol. In reality, right now there are only a few dozen of these representatives around the world, so it will probably be futile to go looking for one. Most likely, one of them will come to a place near you eventually, you will hear about it because it is their job to make sure you do, and then you can go to wherever they are, or maybe they will come to you. These representatives are called Orb Operators. An Orb Operator operates an orb. An orb is a cutting edge technological device designed and manufactured by Worldcoin to do a few specific things which in sum suffice to onboard new users and give them their Worldcoin wallets with some free tokens (WLD). 

This is what an orb looks like.

Here is my high-level understanding of what exactly the orb does, in practical, non-technical terms. First, it scans a person’s eyes, specifically their iris, and uses that naturally unique human biometric to generate a different and separate unique identifier, a simple string of letters and numbers. Assuming that unique identifier is not already in the system (if it was, that would mean this person has already been onboarded), it is converted to what can be thought of as a fungible digital ticket. This ticket is used to claim a new wallet. The multi-step process is in place to ensure two layers of privacy protection. The wallet cannot be reverse matched to the unique identifier nor can the unique identifier be reverse matched to the iris scan, which is deleted after it is used. This is what makes it a privacy-preserving proof-of-personhood protocol. The fact that only a living human’s iris may be used to generate a new wallet ensures that each wallet represents an individual person and that no one person may create more than one wallet. The multi-step process uses zero-knowledge proofs to preserve privacy as this is done.

Why does it matter?

So, what is the point of a privacy-preserving proof-of-personhood protocol, what is the problem it aims to solve, and why is that an important problem to solve? The point is to prove that a particular wallet address is the only wallet address on that protocol representing a certain individual person. The problems that this solves are of the sort we see caused by spam bots and Sybil attacks. A Sybil attack is essentially when a bad actor creates a bunch of bots in order to gain outsized influence within a network. There are a number of useful things that are hard or impossible to do because the problem of preventing Sybil attacks has not been solved.

Here is one example. Imagine a decentralized autonomous organization (“DAO”) wants to make decisions in a decentralized and maximally democratic manner. The DAO would like to give every person in its community one vote on every issue. In an attempt to achieve this, they could give a vote to every Ethereum wallet that connects with their website, but this would be imperfect at best and entirely ineffective at worst, depending on how successful some people may be in seeking to gain an unfair advantage by obtaining the ability to vote multiple times. For instance, If there were 100 people in the community and 1 of them really wanted a particular decision to be made, he could create 99 wallets in addition to his first, connect them all with the website, vote 100 times, and ensure that his decision wins assuming the other 99 people in the community do not try something similar themselves. Voting is just one example of something that is hard to do without Sybil resistance but becomes more practically possible with a working proof-of-personhood protocol like Worldcoin purports it can be, and not just one person one vote voting, but innovative alternatives like quadratic voting as well.

Another example of something made feasible by a working proof-of-personhood protocol is Universal Basic Income (“UBI”). Imagine some government, organization, individual, or group wanted to provide a UBI for everyone in the world in a future where artificial general intelligence (“AGI”) has rendered many humans jobless. Surely we would not want to give bad actors multiples more money than others simply because they are able to appear as if they are many individual people. Again, the ability to prove that a unique address represents a unique and individual person becomes useful. As a third example, if a new product wants to incentivize users to sign up by giving them $10, they could do that with a proof-of-personhood protocol. Without this or something like this, they might risk giving many bonuses to bots created by an individual with no intention of actually trying the product. The list of unlocked opportunities goes on. 

Currently, there are of course some attempted solutions to this general category of problems. There are Know Your Customer (“KYC”) services which leverage government-issued passports, IDs, facial scans, and the like to prove a person is who they say they are, and there are CAPTCHAs (those 4 by 4 panel pictures that ask you to “select all the squares with traffic lights”) to separate people from bots, but these and other solutions are insufficient to unlock the full range of possibilities on a global scale, nor to do it in a decentralized manner. It is estimated that 1 billion people globally do not have any proof of identity, and while a CAPTCHA shows that you are not a robot, it does not show that you haven’t been through that CAPTCHA before.

How is it going?

Now that we have some understanding of what Worldcoin is and why it matters, let us consider its current adoption. Here are some approximate numbers as of early summer 2022 according to a number of public sources including articles and podcasts. There are around 30 Orb Operators, each with an orb, operating in about 24 different countries. They have onboarded about 700,000 users, who can be thought of as beta testers, as we understand things are not yet working entirely as they eventually are expected to, and these beta testers will have the opportunity to onboard again once everything goes live. It looks like it took roughly 6 months to get the first 100,000 onboarded (as per the chart below) and another 6 months to get the next 600,000 — not a bad little growth curve.

Where is it going?

The company is estimating it will have onboarded several million users by the end of 2022, which would require the continued acceleration of a growth curve that has already been quite impressive to date. For some added perspective, it is estimated that there are between 100 and 300 million crypto users globally, so it could be that nearly 10% of all crypto users worldwide will have Worldcoin wallets by the end of this year if the company hits its ambitious projections. Early Orb Operators have onboarded around 700 or 800 people per week and in some cases more than 2,000. While there are only about 30 orbs out there today, Worldcoin projects to distribute between 1,000 and 2,000 by the end of this year, and expects to scale production to around 50,000 new orbs in 2023, perhaps producing even more orbs on an annual basis thereafter. If all goes well, Worldcoin considers it within reach that they may scale to 1 billion users in just a few years, and while this may seems like an awfully lofty target, even meeting it halfway for 500 million users would represent around double the number of all crypto users globally today.

An illustrative model of how Worldcoin could grow to several million users by EOY 2022 and nearly a billion by EOY 2025.

How will it get there?

When it comes to Worldcoin’s innovations, naturally, most people’s attention will be fixed on the science-fiction-looking orb. It sounds as impressive as it looks given that the team evidently had to invent something better than Apple’s face scanning technology or anything else in existence. That said, Worldcoin’s decentralized salesforce of Orb Operators may end up looking like just as critical an innovation as any if they are as successful with scaling as they hope to be. If the company can continue to contract highly motivated and resourceful entrepreneur-types from around the world to distribute Worldcoin in their local regions as or more effectively as the early Orb Operators have done to date, the protocol might just have a shot at onboarding those tens or hundreds of millions, even billions of users that they plan to. 

It will likely be as challenging as it will be important to align the incentives of these Orb Operators with everyone else involved with the protocol so that they will use acceptable methods to get people signed up. Ideally, newly onboarded users will understand what Worldcoin is about and thus be more likely to engage with what they are signing up for. Could it be that Orb Operators by the end of this decade are almost as prevalent as Uber drivers (3-4 million)? Probably not, but Worldcoin might not need one-tenth that many to reach substantially every human in the world and onboard them to the Worldcoin protocol. Some of the most successful venture capitalists, individual investors, and entrepreneurs in crypto certainly seem to believe Worldcoin has a shot. Firms and individuals including a16z, Khosla Ventures, Coinbase Ventures, and Multicoin Capital, among many others have invested $125 million in Worldcoin over its last two rounds, most recently at a valuation of $3 billion. Suffice to say, capital should not be the thing that constrains them from getting off to a very nice start.

What’s next?

Worldcoin has begun a process and published a roadmap proclaiming that they will eventually be open sourcing everything. Its leadership has discussed the concept of progressive decentralization and their goals for community governance in the long-run. Once the protocol is live after mainnet launch, the potential for projects to utilize this privacy-preserving proof-of-personhood protocol seems unbound. Could we all start “earning” UBI before we die? What might an open global userbase of billions of proven-to-be-unique people enable the next generation of great organizations to offer? What could this mean for democracy? If only there was somewhere we could look to see the future… perhaps in the eye of an orb.