Worldcoin, the project created by Open AI CEO Sam Altman and his partners, has faced multiple controversies since its launch in late July last year. The initiative aims to establish a global digital ID system, introduce the Worldcoin token, and develop the World App, a universal wallet leveraging World ID for payments.

Upon its launch, the project received mixed reactions. Privacy advocates and regulators raised concerns about the risks of collecting biometric data on a large scale. Despite this, the project attracted over 2 million users who signed up for a digital ID during its initial rollout phases.

In response to regulatory pressure, Worldcoin implemented the Secure Multi-Party Computation system to encrypt iris data into secret shares distributed among multiple parties to address concerns about data centralization.

At present, the project is banned in some countries and under investigation in others for its data collection practices. Despite these challenges, Worldcoin had 119 ‘orbs’—devices that scan a user’s iris—across 18 countries within the first few months, and plans to expand this number to 1500 globally. Additionally, the World App has garnered over 10 million users.

While Worldcoin’s approach to decentralized identity is promising, debates persist about whether it effectively addresses broader issues. According to Sebastian Rodriguez, Chief Product Officer at decentralized identity platform Privado ID, although Worldcoin’s use of cryptographic techniques is commendable, governance and transparency issues remain unresolved.

“Worldcoin has announced plans to delete all biometric data and distribute it in an MPC network, addressing major concerns about data concentration from a technical perspective. They also use nullification to protect against cross-application tracking, making their approach technically secure.”

However, Rodriguez also noted that security is more complex than its technical components alone. It involves the entire solution, including technology, people, processes, and power structures. He pointed out that although Worldcoin uses many appropriate cryptographic primitives to ensure privacy and security, it doesn’t fully adhere to the principles of decentralization and transparency that most Web3 projects embrace. While efforts have been made to open-source most of their technologies, the governance, long-term goals, and tokenomics of the project are still concerning.

Rodriguez emphasized that Worldcoin’s model works only if it becomes a monopoly for proof of uniqueness, relying on a non-standardized biometric hash database controlled by a single private organization. Despite Worldcoin’s claims that Secure Multi-Party Computation enhances data privacy and security, Rodriguez believes that ethical concerns remain unresolved.

“Technical security should never stop the ethical debate around the implications of a unique identifier that can’t be changed throughout one’s life. Such an identifier carries deep and sometimes dangerous implications.”

Despite the controversies, Worldcoin has attracted considerable attention. Its connection to Sam Altman and OpenAI, coupled with speculation inherent to tokenized projects, has driven both controversy and investor interest.

In terms of enhancing security and efficiency in identity verification systems while minimizing reliance on biometric data, Rodriguez mentioned that biometrics are at the core of all identity systems, including National IDs and Passports. The focus should be on who is the source of trust and how centralized it is. Governments should ideally play this role, as seen with projects like the European Union’s digital identity solution. Alternative methods, such as social graphs and peer-to-peer vouching, have not yet achieved mass adoption.

Rodriguez stressed the importance of creating identity solutions that align with international data protection standards through open ecosystems of interoperability. Centralizing everything in a single identity provider is tempting but problematic. Instead, a healthy open ecosystem of competing and local identity providers can avoid power concentration, provide choice and alternatives, and adapt to local regulations.

Privado ID aims to provide the underlying infrastructure to build and support open ecosystems of interoperable credentials. They focus on enabling identity providers and users to exchange and monetize credentials in a privacy-preserving way, offering the best user and developer experience. Privado ID envisions itself as a marketplace of trusted data where applications and credential issuers can connect, integrate, and conduct business while respecting user privacy and consent.

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