Worldcoin, Sam Altman’s Crypto Project, Is Building a Layer-2 Chain

Sam Altman, co-founder of OpenAI, is launching Worldcoin – his retina-scanning cryptocurrency company – with its own unique blockchain.

This summer, World Chain, a layer-2 network on Ethereum, is planned to be launched, offering preferential treatment to users who get a “World ID” by scanning their eyes instead of using traditional identification methods. Worldcoin’s longstanding vision is for this network to serve as a platform verifying authentic human identities, enhancing security and authenticity in the era of advanced AI technology.

Up until now, Worldcoin’s World ID protocol has functioned as a standalone decentralized application, essentially comprised of smart contracts on Ethereum’s blockchain. By transitioning to an independent chain, the developers aim to acquire more autonomy and flexibility over the project, while possibly cutting down costs for users as well.

Humans with verified identities will have preferential treatment when it comes to allotting blockspace over automated entities, and they will also receive some complimentary gas, according to Tools For Humanity, the creators of Worldcoin. This means that for developers, it presents an opportunity to expand their user base significantly by building apps with practical applications in the real world.

Tiago Sada, the head of product, engineering and design at Tools For Humanity, explained that many blockchains are making significant efforts to lower gas fees in order to make their networks more accessible. However, this results in an increase in bot activity, ultimately leading to higher fees for human users and network congestion.

“I would say it’s pretty clear that somewhere between 50 and 90% of on-chain transactions are automated,” Sada explained. “World Chain will be open and permissionless. Anyone, including bots, can submit transactions. But transactions submitted by verified humans will have priority block space, so they will be processed faster.”

Worldcoin sets itself apart (or garners controversy, depending on one’s viewpoint) through its distinctive “orb” – a chrome sphere resembling a bowling ball, equipped with an eyeball-scanning lens. This orb is unique to Worldcoin, as it confirms the humanity of account holders and eliminates the risk of multiple accounts controlled by the same individual.

The importance of establishing “proof of identity” for the project is relevant as artificial intelligence continues to expand in various applications.

Tools For Humanity has been traveling with its scanning device to gather data at various conferences, events, and temporary retail locations. The initiative reports that over 10 million individuals from over 167 countries have joined the program.

Through transitioning to a self-built network, Sada explained, “we can continue adding users at our current pace.” Furthermore, this change benefits existing users by providing them with swifter and more affordable transactions.

Worldcoin’s original proposal focused on universal income through a unique identification system: Individuals who had their retinas scanned in specific areas (excluding the US and some other nations) were granted WLD tokens and a verified World ID account. However, as AI technology has increasingly influenced the internet, Worldcoin’s financial objectives have taken a backseat to its more extensive goals regarding digital identity.

After a challenging year filled with criticism, World Chain follows the launch of Worldcoin in 2021. Some cryptocurrency enthusiasts raised privacy concerns regarding Worldcoin’s innovative eye-scanning orb, finding its invasive nature unsettling. Despite Worldcoin’s creators asserting that the data is encrypted rigorously, the uneasiness persists.

An MIT Technology Review article added fuel to the criticism against Tools for Humanity, claiming they lured underprivileged communities with the promise of free tokens during their rollout. The report accused Worldcoin of using misleading marketing tactics, gathering more personal data than declared, and neglecting to obtain proper informed consent.

With the surge of artificial intelligence technology and the crypto market experiencing growth, the Worldcoin team has released several improvements and integrations. Now, users can access Worldcoin without using eye scans, and advanced encryption techniques are being implemented to tackle privacy concerns that have persisted since the project’s beginning.

Despite facing skepticism from many detractors, Worldcoin has managed to thrive, processing over 70 million transactions in total as of the latest project updates. Notably, Ethereum’s founder, Vitalik Buterin, acknowledged the project’s progress in addressing privacy concerns and minimizing data usage in a March blog post. He commended Worldcoin for its efforts to improve system design and respond to privacy criticisms.