Understanding Worldcoin: Core Ideas, Composition, How It Works and Use Cases

Author: worldcoin whitepaper; Translation: Golden Finance

Introduction to Worldcoin

Worldcoin was created to create a globally inclusive identity and financial network, owned by the majority. If successful, Worldcoin could dramatically increase economic opportunity, create a reliable solution to distinguish humans from AI online while preserving privacy, enable global democratic processes, and demonstrate a potential path to an AI-funded global basic income.

Worldcoin consists of a privacy-preserving digital identity network (World ID) and, where permitted by law, a digital currency (WLD). Everyone is eligible for WLD simply because they are human. World ID and WLD are currently implemented through the World App, the first front-end to support the World ID and Worldcoin protocols, developed by the contributing team of Tools for Humanity (TFH).

"Proof of Humanity" is one of the core ideas behind Worldcoin and refers to the identification of a person as both a human being and a unique individual. Once confirmed, individuals can assert that they are a real person, distinct from other real people, without revealing their real-world identity.

“Proof of human identity” on a global scale remains an unsolved problem today, making it difficult to vote online or distribute value at scale. This question becomes even more pressing as increasingly powerful AI models further increase the difficulty of distinguishing humans from machines. If Worldcoin is partially successful, World ID could become the global standard for human identification.

Some of Worldcoin's core assumptions include:

1. Human identification is a missing and necessary digital product. This offering will become even more important as increasingly powerful AI models become available.

2. For the first time, scalable and inclusive human identity proofs enable the incentives of all network participants to revolve around adding real humans to the network. Bitcoins are issued to secure the Bitcoin network. Worldcoin is issued to expand the Worldcoin network, and its security is inherited from Ethereum.

3. In an age of increasingly powerful AI, the most reliable way to issue global human identification is through custom biometric hardware.

A dynamic white paper presents the rationale for the project's implementation as well as the current status and roadmap.

World ID

World ID is a privacy-preserving global identity network. Through zero-knowledge proofs, it enables users to verify their human identity in an online environment while preserving privacy. Through a custom biometric device called the Orb, users can obtain a World ID. Orb is based on the realization that custom biometric hardware may be the only long-term viable solution to issuing AI-safe human authentication. World IDs are issued through the Worldcoin protocol, which allows individuals to prove to any validator (including Web2 applications) that they are human, while preserving privacy through zero-knowledge proofs. In the future, other certificates may also be issued on the protocol.

The goal of a World ID is to bind individuals, meaning that a World ID can only be used by the individual to whom it was issued. It should be difficult for users to use fraudulently to steal or obtain World ID credentials. Additionally, it should always be possible for individuals to regain a lost or stolen World ID.

Worldcoin Tokens

While network effects will ultimately come from building useful applications on top of financial and identity infrastructure, tokens are issued to all network participants to align their incentives with network growth. This is especially important early on to bootstrap the network and avoid the "cold start problem". This may make Worldcoin Token (WLD) the most widely distributed digital asset.

World App

The World App is the first front-end to support the creation of a World ID: it guides individuals through the Orb for authentication, stores an individual's World ID credentials in a privacy-preserving manner, and implements an encryption protocol to share these credentials with third parties. It aims to provide frictionless access to the global decentralized financial infrastructure. Eventually, there should be many different wallets integrating World ID.

How does Worldcoin work?

Worldcoin revolves around World ID, a privacy-preserving global identity network. Using World ID, individuals will be able to prove to any platform that integrates with the protocol that they are a real, unique person. This will enable fair airdrops, provide protection against bots/fake accounts on social media, and enable a fairer distribution of limited resources. Additionally, World ID could enable global democratic processes and new forms of governance (e.g., through quadratic voting), and ultimately support the path to an AI-funded global basic income (UBI).

To participate in the Worldcoin protocol, individuals must first download the World App, the first wallet app to support the creation of World IDs. Individuals need access to a physical imaging device called the Orb in order to obtain an Orb-verified World ID. Most Orbs are operated by a network of independent local businesses called Orb Operators. Orb uses multispectral sensors to verify humanness and uniqueness, issues Orb-verified World IDs, and promptly deletes all images on the device (unless expressly consented to for data custody).

Potential use cases

Worldcoin can dramatically increase global equality of opportunity by advancing a future where everyone can participate in a global digital economy through universally accessible decentralized finance and identity infrastructure. As the network grows, so will its usefulness.

But many interactions in the digital realm are currently not possible on a global scale. The way humans transact value, authenticate and interact on the Internet may fundamentally change. With universal access to global finance and identity, the following futures could become possible:

finance

Own and transfer digital currency: Sending money globally will become almost instant and borderless. Everyone can use it. The world will be connected financially, and everyone will be able to conduct economic transactions on the Internet. For example, India's COVID Relief Fund, a worldwide personal fundraising campaign in support of India, raised over $400 million, a hint of what's possible. Collectively, this has the potential to connect people on a global scale like never before in human history.

Digital currencies are more secure than cash, which is more susceptible to theft or counterfeiting. This is especially important in crisis situations where instant cross-border financial transactions are required, such as during the Ukrainian refugee crisis where USDC was used to distribute direct aid. In addition, digital currency is an asset that individuals can directly own and control without trusting a third party.

identity

Keep Bots Out: Bots, spam, and robocalls on Twitter are all the result of a lack of reliable and frictionless digital identities. These problems will be exacerbated by rapidly evolving AI models that can solve CAPTCHAs and produce convincingly “human” content. As services harden their defenses against such content, it becomes critical to provide an inclusive and privacy-preserving solution to proving the public infrastructure of human identity. If every message or transaction included a "verified human" attribute, a lot of noise could be filtered out of the digital world.

Governance: Currently, collective decision-making in Web3 mainly relies on token-based governance (one token, one vote), which excludes some people from participating and heavily favors those with more economic power. Reliable proof of human identity that is resistant to repeated attacks like World ID opens up the design space for global democratic governance mechanisms, not only for Web3, but also for the Internet. Furthermore, in order for AI to maximize its benefits to all, not just a few, it will become increasingly important to include everyone in its governance.

Intersection of Finance and Identity

Incentive Distribution: Ways of sharing value such as coupons, loyalty programs, referral programs, etc. have traditionally been vulnerable to fraud because the incentives for fraud are high. Frictionless and fraud-resistant digital identities help incentivize distribution, benefiting both consumers and companies. This could even spark a new wave of companies partially owned by their users.

Fair distribution of limited resources: Key elements of modern society, including subsidies and social benefits, can be made more equitable through the use of human identification. This is especially important in developing economies, where social welfare programs face resource access problems - using false identities to obtain more than one person's fair share of resources. In 2021, India saved $5 billion in subsidy schemes by implementing biometric-based systems. A decentralized human identification protocol could extend similar benefits to any project or organization globally. As AI advances, the equitable distribution of access and the value created through a global basic income will play an increasingly important role in counteracting the concentration of economic power. World ID can ensure that each individual is only registered once and guarantees fair distribution.