Crypto markets have been bullish about AI cryptocurrencies and tokens since the success of OpenAI’s ChatGPT and its competitor Google Bard. Cryptocurrencies which were based on AI, ML or even data received huge attention.
However, there wasn’t any true AI cryptocurrency in the market. That changed with the formal launch of Worldcoin, an AI powered cryptocurrency that wishes to become a global platform for establishing human identity.
However, that didn’t go well with regulators as well as the global crypto community. Let’s see why such projects face flak from the community and take a look at their future.
About Worldcoin
Worldcoin is a cryptocurrency project by ChatGPT co-founder Sam Altman. The project was initiated in May 2021 and received 2 Million users by July 13, 2023. A few days later on July 24, 2023, it was officially launched.
Worldcoin aims to create a global identity protocol which helps humans verify their presence on digital platforms like social media, financial systems, and on similar platforms as humans.
It also aims to create a global financial system that uses cryptocurrencies for cross-border money transfers and other financial applications.
How does it work?
Worldcoin uses iris(eye) scans to create digital identities that allow people to verify on their platform as human.
You need to scan your eyes and provide government identity proof to obtain World IDs that allow you to verify as humans in platforms that are connected to Worldcoin. They are currently active in 35 cities across the world including big metropolitan cities Paris, Seoul, Singapore, Tokyo, Hong Kong and Lisbon.
However, there are no major platforms that have partnered with Worldcoin.
Also, there are some free WLD tokens that you receive when you are on board on the platform.
Future of Such AI-based Crypto
AI-based cryptocurrencies have generally received a good response such as Singularity AI, The Graph Protocol, Fetch.ai and several other projects. However, Worldcoin faced privacy issues due to its collection of biometric data.
Privacy Concerns
However, things began to take a bad turn when several members from the crypto world and several government data security regulators began to show objections to its method of verifying humans.
Twitter user @mach9d says that this project would flop.
https://twitter.com/mach9d/status/1683513169841463301
Another user @anitaposch had doubts on its future.
https://twitter.com/AnitaPosch/status/1683529421276233736
Regulatory Concerns
Eye scans are considered as sensitive data and therefore it began to attract regulatory attention.
The UK-based watchdog Information Commissioner’s Office said they would investigate the matter.
French data security watchdog CNIL also expressed concerns regarding data saying that “The legality of this collection seems questionable, as do the conditions for storing biometric data.”
Future of Worldcoin
It is almost impossible that governments will allow eye-scan data collections without proper safeguards in place.
Yet, Worldcoin faces a business-model threat because popular social media platforms like X(formerly Twitter) are already working hard to weed out bots. No major social media has announced partnerships with it yet.
Status of other AI Cryptos
AI-based cryptocurrencies such as The Graph, Render, Injective, Singularity Network, are trading normally and have received little attention from regulators.
These projects collect little to no personal data and therefore do not face much regulatory heat.
- Projects like Graph Protocol indexes blockchain data that is already publicly available.
- A similar network Covalent uses public blockchain data.
- FetchAI automates business work.
We can observe that none of these projects require personal data and therefore face no threat from regulatory bodies. However, Worldcoin has several challenges to conquer and yet there is a little possibility of its success due to its business models.
