Written by Hazel J. Greene, Senior Analyst

The recent launch of Worldcoin, a prominent project in the crypto community, has garnered significant attention and investment within a short time frame. However, Ethereum co-founder Vitalik Buterin has voiced his apprehensions about the Worldcoin ecosystem, offering valuable insights based on his extensive experience in the crypto world.

In a comprehensive blog post, Buterin expressed his reservations regarding Worldcoin’s technology, particularly the iris-scanning hardware and biometric data collection practices employed by the project. He emphasized that these practices raise substantial privacy concerns and warrant careful consideration.

Worldcoin, led by Sam Altman, CEO of OpenAI, aims to implement a proof-of-personhood system that provides a “digital passport” called World ID in an era increasingly populated by AI bots. To obtain a World ID, individuals must undergo an in-person iris scan using Worldcoin’s orbital scanner. Following verification, the scanned individuals receive free Worldcoin (WLD) tokens, which function as ERC-20 utility tokens with governance properties on the Worldcoin protocol.

While Worldcoin assures the security and privacy of its biometric identification system, Buterin expresses concerns about potential abuses of the scanned iris data. As these scans are stored within the company’s database, they possess the potential to expose sensitive information such as a person’s sex and ethnicity.

Moreover, Buterin raises questions about the project’s accessibility. While Worldcoin’s beta period engaged two million people and aims to introduce 1,500 Orbs in 35 global cities across 20 countries, its limited availability compared to the vast number of smartphones remains a challenge. It may prove difficult, especially in underdeveloped regions, to ensure convenient access to an Orb within a five-kilometer radius.

Buterin suggests that Proof of Humanity systems, which rely solely on smartphones, may offer a more effective means of ensuring accessibility. Additionally, he highlights concerns over the potential insertion of backdoors by the Worldcoin Foundation. Given the centralized nature of hardware iris scanners, they become susceptible to manipulations that could compromise the decentralization aspect, over which the foundation holds control.

Regarding security, Buterin cautions that once hacked, iris scan data cannot be changed. Consequently, compromised data becomes perpetually vulnerable to misuse in identification and authentication processes. There is even a possibility of 3D-printed “fake people” bypassing iris scans and obtaining World IDs.

Similar to other tokens, WLD can be bought and sold on exchanges. Since its launch, the price of WLD tokens has experienced a significant increase, currently trading at $2.54, marking a noteworthy 52.36% appreciation.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.