DAO

On Worldcoin, DAOs and digital identity black markets

Molly White has a great essay on Sam Altman’s iris scanning orb and its purported use cases.

Much of Worldcoin’s promises are predicated on the questionable idea that highly sophisticated artificial intelligence, even artificial general intelligence, is right around the corner. It also hinges on the “robots will take our jobs!” panic — a staple of the last couple centuries — finally coming to bear. Worldcoin offers other use cases for its product too, like DAO voting, but it is not the promise to solve DAO voting that earned them a multi-billion dollar valuation from venture capitalists.

Other use cases that Worldcoin has offered seem to assume that various entities — governments, software companies, etc. — would actually want to use the Worldcoin system. This seems highly dubious to me, particularly given that many governments have established identification systems that already enjoy widespread use. Some even employ biometrics of their own, like India’s Aadhaar. There’s also the scalability question: Worldcoin operates on the Optimism Ethereum layer-2 blockchain, a much speedier alternative to the layer-1 Ethereum chain to be sure, but any blockchain is liable to be a poor candidate for handling the kind of volume demanded by a multi-billion user system processing everyday transactions.

What will happen when you promise people anywhere from $10 to $100 for scanning their eyeball? What if that’s not dollars, but denominated in a crypto token, making it appealing to speculators? And what if some people don’t have the option to scan their own eyeballs to achieve access to it?

A black market for Worldcoin accounts has already emerged in Cambodia, Nigeria, and elsewhere, where people are being paid to sign up for a World ID and then transfer ownership to buyers elsewhere — many of whom are in China, where Worldcoin is restricted. There is no ongoing verification process to ensure that a World ID continues to belong to the person who signed up for it, and no way for the eyeball-haver to recover an account that is under another person’s control. Worldcoin acknowledges that they have no clue how to resolve the issue: “Innovative ideas in mechanism design and the attribution of social relationships will be necessary.“ The lack of ongoing verification also means that there is no mechanism by which people can be removed from the program once they pass away, but perhaps Worldcoin will add survivors’ benefits to its list of use cases and call that a feature.

Relatively speaking, scanning your iris and selling the account is fairly benign. But depending on the popularity of Worldcoin, the eventual price of WLD, and the types of things a World ID can be used to accomplish, the incentives to gain access to others’ accounts could become severe. Coercion at the individual or state level is absolutely within the realm of possibility, and could become dangerous.