PROJECT WORLD COIN
1. Context
Recently, OpenAI CEO Sam Altman took to Twitter to formally re-introduce Worldcoin, a project eclipsed by the popularity of ChatGPT. The Worldcoin venture runs on a simple model: allow your eyes to be scanned in order to prove your human uniqueness, and receive some crypto and an ID (called a World ID) in exchange. Worldcoin claims it is building the “world’s largest identity and financial public network” open to people worldwide.
2. Worldcoin: A Digital Network with Biometric Identification
Worldcoin is a digital network initiative aiming to provide global participation in the digital economy. It employs a unique approach by using a biometric device called the "Orb" to scan people's iris patterns and create a World ID through the World app.
3. Iris Scanning and World ID
- Volunteers known as "Orb operators" scan individuals' irises to collect their biometric data.
- People can claim a World ID through the World app, allowing them to participate in the network.
4. Role of Orb Operators:
- Orb operators are volunteers who sign up in their locality to scan irises.
- They receive basic training and a biometric device (the Orb) to perform iris scans.
- Orb operators can even rent out the Orb to others to help them scan irises.
5. WLD Crypto:
- Users with a World ID can claim the WLD cryptocurrency, which they can use for transactions or hold as an investment.
- WLD is a token based on the Ethereum blockchain, similar to Ether, the native coin of Ethereum.
6. Accessing WLD:
- Users can obtain WLD by scanning their irises and obtaining a World ID.
- Alternatively, they can buy or sell WLD without needing to scan their irises or use the app.
7. Privacy Measures and Biometric Scanning:
- Worldcoin explains that using biometric information like iris scanning helps avoid duplication and ensures everyone can participate in the network.
- They claim to use zero-knowledge proofs (ZKPs) to maintain users' privacy, and the system is GDPR compliant.
- Orb images are used to generate a unique iris code, and by default, these images are deleted once the iris code is created unless users opt-in to Data Custody.
8. Criticism and Concerns:
- Worldcoin faced criticism even before its relaunch.
- NSA whistleblower Edward Snowden pointed out that even if biometric scans are deleted, the unique identifier could still match future scans of the same person's eyes.
- Worldcoin faces challenges regarding the accessibility of the Orb and expanding the user database.
- The project plans to incentivize sign-ups by offering coupons or access to loans.
- Concerns exist about the privacy and security of biometric data and potential misuse.
- Questions arise about the feasibility and scalability of reaching unbanked or underbanked populations.
- The value and utility of the Worldcoin token and its competitiveness with other cryptocurrencies or fiat currencies are also subject to scrutiny.
9. Worldcoin's Presence in India:
- According to the company's website, Worldcoin has come to India.
- They have listed 18 locations, mainly in Delhi, Noida, and Bangalore, where Orb operators are scanning people's eyes.
- Some scanning locations include popular malls and metro stations in these cities.
- Overall, Worldcoin's use of biometric identification through iris scanning and its focus on inclusivity in the digital economy have garnered attention and discussions regarding privacy and data security concerns.
10. Cryptocurrency
Cryptocurrency is a digital or virtual form of currency that uses cryptographic techniques to secure financial transactions, control the creation of new units, and verify the transfer of assets. Unlike traditional currencies issued and regulated by central banks, cryptocurrencies operate on decentralized networks based on blockchain technology.
11. Key Characteristics of Cryptocurrencies:
- Decentralization: Cryptocurrencies are decentralized, meaning they operate on a distributed network of computers, known as nodes, rather than being controlled by a central authority. This feature eliminates the need for intermediaries like banks and allows for peer-to-peer transactions.
- Blockchain Technology: Most cryptocurrencies utilize blockchain technology to record and secure transactions. A blockchain is a chain of blocks, each containing a list of transactions, cryptographically linked to the previous block, forming a secure and immutable ledger.
- Limited Supply: Many cryptocurrencies have a fixed supply or a predetermined issuance schedule. For example, Bitcoin has a maximum supply of 21 million coins, making it a deflationary asset.
- Anonymity and Pseudonymity: Cryptocurrency transactions are often pseudonymous, meaning they use cryptographic addresses rather than real-world identities. While this offers some level of privacy, it also raises concerns regarding illegal activities and money laundering.
12. Popular Cryptocurrencies:
- Bitcoin(BTC): Launched in 2009 by an anonymous person or group known as Satoshi Nakamoto, Bitcoin is the first and most well-known cryptocurrency. It serves as a store of value and a medium of exchange, often referred to as digital gold.
- Ethereum( ETH): Introduced in 2015 by Vatalik Buterin, Ethereum is a blockchain platform that enables developers to create decentralized applications (DApps) and smart contracts. Ether (ETH) is its native cryptocurrency.
- Ripple (XRP), Litecoin (LTC), Cardano (ADA), and more: There are thousands of cryptocurrencies with various use cases, including cross-border payments (Ripple), fast transactions (Litecoin), and blockchain development (Cardano).
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For Prelims: Cryptocurrency, ChatGPT, Project Worldcoin, Orb Operators, WLD cryptocurrency, zero-knowledge proofs (ZKPs), Bitcoin(BTC), Ethereum( ETH), Ripple (XRP), Litecoin (LTC), and Cardano (ADA).
For Mains: 1. Discuss the Worldcoin project's use of biometric identification through iris scanning and its implications on privacy and inclusion in the digital economy. (250 words).
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Previous year Question1. With reference to “Blockchain Technology”, consider the following statements: (UPSC 2020)
1. It is a public ledger that everyone can inspect, but which no single user controls.
2. The structure and design of the blockchain are such that all the data in it are about cryptocurrency only.
3. Applications that depend on the basic features of blockchain can be developed without anybody’s permission.
Which of the statements given above is/are correct?
A. 1 only
B. 1 and 2 only
C. 2 only
D. 1 and 3 only
Answer: D
2. With reference to 'Bitcoins', sometimes seen in the news, which of the following statements is/are correct? (UPSC 2016)
1. Bitcoins are tracked by the Central Banks of the countries.
2. Anyone with a Bitcoin address can send and receive Bitcoins from anyone else with Bitcoin address.
3. Online payments can be sent without either side knowing the identity of the other.
Select the correct answer using the code given below.
A. 1 and 2 only
B. 2 and 3 only
C. 3 only
D. 1, 2 and 3
Answer: B
3. With reference to Non-Fungible Tokens (NFTs), consider the following statements: (UPSC 2022)
1. They enable the digital representation of physical assets.
2. They are unique cryptographic tokens that exist on a blockchain.
3. They can be traded or exchanged at equivalency and therefore can be used as a medium of commercial transactions.
Which of the statements given above is/are correct?
A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Answer: A
4. With reference to Web 3·0, consider the following statements : (UPSC 2022)
1. Web 3·0 technology enables people to control their own data.
2. In the Web 3·0 world, there can be blockchain-based social networks.
3. Web 3·0 is operated by users collectively rather than a corporation.
Which of the statements given above is correct?
A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Answer: D
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Source: The Hindu
