The tech world has been buzzing in recent days about Sam Altman’s dismissal and return to OpenAI and the surrounding drama. Besides being one of the most prominent drivers of the Web2 startup world — he served as president of YCombinator before embarking on the 8+ year OpenAI journey — Altman also had a foray into Web3 via the Worldcoin project, which promises to redefine our identities in the digital world.
In brief, Worldcoin is an identity ecosystem relying on “The Orb,” an iris scanning device that is used to authenticate people based on their most unfalsifiable and unique biometric print — the shape of their iris.
On the face of it, it looks like a futuristic and unique approach to the issue of personal identity. But the dystopian connotations are easy to grasp, and as expected, the project has been mired in controversy ever since its unveiling.
In the past couple of years, Worldcoin has engaged in a massive iris “farming” campaign to get people to scan their eyes and enter the system. In return, they would receive some WLD token rewards, worth upwards of $60 now that the token’s officially launched. Worldcoin targeted countries in the Global South for the campaign, regions that are most in need for robust identification, but also the ones where people would be most receptive to an apparent “handout” of a few dozens of dollars.
And this is where the dystopian premise starts turning seriously ugly. Reports are surfacing that there is now a vibrant black market for Worldcoin identities, where people sell their credentials for $20-$30 as crypto traders use them to get the WLD airdrop. And you can definitely understand the villagers in Cambodia who’d rather get some free cash now, rather than a future promise of some technology so distant from their present reality.
Beyond that, there are serious concerns of Worldcoin’s data storage practices. Though they claim that they will delete the “source” iris data once everything is done, this statement needs to be trusted — and we know OpenAI’s record on data privacy isn’t stellar. Over time, Worldcoin threw around a few vague notions about hashes and zero knowledge proofs to maintain user privacy, but ultimately Worldcoin is a very Web2-esque project whose claims to championing privacy ring hollow.
You never appreciate privacy until you lose it
One of the core ideals of Web3 is its uncompromising stance on people’s transactional privacy, which intersects with all facets of a person’s anonymity. Early proponents of Bitcoin appreciated both its unflinching monetary policy, but also its nature of anonymous, peer-to-peer cash.
In the developed world, the financial system is fully monitored by default. People may agree or disagree on the stated reasons for doing so, but the principle of a default lack of privacy is unique in our society. It’d be akin to a car maker knowing your car’s position and speed at all times.
For most people, their lack of privacy rarely impacts their daily lives, but that’s just because the troves of data aren’t really acted upon. Someone with the right motivation, be they state actors or hackers, could use the data to seriously threaten the personal security and wellbeing of any person.
Privacy by default is the only solution
Many projects in the Web3 space have been quietly moving towards a fully private and decentralized interaction with blockchains. The zero knowledge proof space includes a pioneer of transactional privacy, Zcash, which made it possible to make private transactions with the ZEC cryptocurrency. Since then, with the scope of blockchain usage expanding to DeFi, identity and much more, projects like Namada have taken the mantle for spearheading privacy.
The project brings a number of unique privacy innovations through its Multi Asset Shielded Pool. This allows turning any kind of asset into a shielded token whose transactions cannot be traced. What’s more, each asset shares the same anonymity pool, making its usage feasible for even small and little-known assets. Namada is integrated via the Cosmos IBC protocol to blockchains such as Ethereum, the Cosmos Hub and many others.
Namada’s core belief is that privacy is a public, community good that is worth preserving at all costs. And even if most individuals don’t make active efforts to keep themselves private, they would use a platform that also offers privacy without impacting their routine usage.
To that end, the project is adopting some of the DeFi incentivization techniques to bring more users into the privacy fold. With rewards and incentives for simply holding shielded assets, the project expects to quickly bootstrap a sufficient pool of private tokens, creating the “good kind” of network effects that have previously hampered privacy adoption on-chain.
Projects like Tornado Cash or CoinJoins, while popular in their own way, have been often associated with illicit use. It’s the old adage of “why conceal yourself if you’ve got nothing to hide.” With the expectation of privacy by default on Namada, this stigma can hopefully be neutralized.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Nikolai Kuznetsov
Nikolai Kuznetsov is a financial analyst and professional trader. Based in Israel, he has been trading in multiple markets and educating traders as a teacher and mentor. Nikolai has extensive experience in , and in various assets such as cryptocurrencies, FX, commodities, equities and bonds. In the last decade, Nikolai has devoted his energy and skillset to the crypto market, contributing analysis pieces, trade commentaries and op-eds to publications such as Cointelegraph, Forbes, TheNextWeb, and Investing.com, among others. He also holds a black belt in Brazilian Jiu-Jitsu.
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