After the Second World War, a financial-economic agreement was concluded between the economic giants in the American Bretton Woods. The American plan won (tying the dollar to gold) against the plan of one of the most influential economists we’ve ever known, Keynes. Keynes wanted a global bank with a global currency, the Bancor. This system would be used to settle international payments and to keep trade surpluses in check. More than 75 years later, Keynes’ idea seems to flourish again with the launch of the Worldcoin. In this article everything about this new coin.
There are currently 180 recognized currencies in the world and many thousands of other monetary systems. From bottle caps in Cameroon and space coins at NASA, to many local initiatives such as Berkshares in the United States, Fureai kippu in Japan, Bus Tokens in Brazil and the BijlmerEuro in the Netherlands.
Every designer of a system will say that his system works best, but which system really is? A study (pdf) of 599 different types of “failed” monetary systems found that one third failed because of the dissolution of the monetary union in which the system was used and one third because of wars. Due to the Second World War alone, 95 money systems disappeared. The average age of a money system, according to the study, is 39 years, almost exactly the age of today’s Dollar, after Bretton Woods ended in 1971.
One coin to rule them all
Since I have been active in the web3 ecosystem (everything related to blockchain, crypto, DAOs, etc.) in 2015, I have seen continuous skepticism from the media. But that has always been the case with new technologies. Every new technology is used by criminals, every new technology in principle makes mistakes and, in addition to a positive, also has a negative impact on our society.
That’s how I look at the Worldcoin, with a sober look at what positive and negative sides there are. If we look at the two main solutions — a world currency and a world identity — I see advantages that we as Westerners do not easily see, because we are simply too good. Almost every Dutch person has an almost free payment system with Tikkie and iDeal, just like an identity number and accompanying ID card.
But according to the World Bank, there are still 1.5 billion people worldwide who have no access to the financial system. These are often people who easily pay 20% transaction costs for money that they want to send to their family in the home country, for example. Indeed, it costs a lot of money to be poor. In addition, access to the financial system is the most important factor to develop a country.
A subject that Queen Maxima is busy with.
In addition, according to the same World Bank, there are still more than a billion people who do not have a formal identity. No identification number, no paperwork or proof that you are who you say you are. Now you would say, if you don’t pee wildly or never fly outside Europe, then you don’t have to show your identity. But secretly there are a lot of things for which you have to be able to provide an identity. Voting, opening a bank account, in healthcare and countless other elementary processes in our society.
Proof of human
I also think it’s an interesting idea to prove you’re not an AI-generated fake persona. A recent study by DuckDuckGoose from Delft showed that when applying for a bank account at Rabobank, deepfakes passed the face check in 80% of the applications.
That the very person who introduced AI’s “killer app” (ChatGPT) to the global public now comes up with a new solution to distinguish between humans and machines, because he believes that sooner or later AI will pose a great danger will shape for society, is of course special.
Free money for everyone
One of the higher goals of the Worldcoin is to establish a global system for the issuance of a Universal Basic Income. We already saw a kind of this during corona, when paper checks were still sent in America and in the Netherlands we could apply for all kinds of different surcharges.
It’s an idea that appeals to a lot of people. If we have a society rich enough to end poverty, then we have a moral obligation to find out how to do that. — Sam Altman, Founder Worldcoin
Rutger Bregman spoke about this at TEDxMaastricht years ago. In his TED talk he gave many interesting studies and ideas why such a UBI would be a very good idea:
iris scan
To verify yourself as a real human being, you must have your iris scanned by a so-called orb. A chrome bowling ball, with all kinds of infrared cameras, sensors and AI-controlled neural networks that regulates this within 2–3 seconds. The ball was designed by the first designer hired at Apple by chief designer Jony Ive, Thomas Meyerhoffer.
I often use Privium at Schiphol myself. With an eye scan I get through customs within half a minute. That’s where I see the benefits of using biometric data. Nevertheless, there are many critical voices from experts, especially about the fact that all this data is stored centrally. A ‘honey pot’ for hackers.
Don’t catalog eyeballs. Don’t use biometrics for anti-fraud. In fact, don’t use biometrics for anything. — Edward Snowden
On the other hand, such a system already exists within the country with the most inhabitants in the world: India. This is where 99.9% of adults have stored their biometric data, for the ID system Adhaar. In Worldcoin’s privacy statement you can also see that the default setting for users is that no data is stored.
I think the marketing campaign that immediately rewards activated users with a number of Worldcoins is brilliant. Paypal also did this in the beginning and according to the founders this was the breakthrough for mass adoption. I still find the name for the scanning device special: orb is a super criminal from the Marvel comic books. But perhaps this is a nod to traditional financial institutions and governments, because of the disruptive nature of the project.
The system itself was praised by one of the most important people in blockchain technology, Ethereum founder Vitalik Butherin, for the many cryptographic elements it contains to ensure security, such as “Zero Knowldege Proofs”, which I wrote about here earlier. In addition, also the cyberpunk elements, such as cutting out traditional financial institutions from the whole and also making governments virtually superfluous.
Big tech is expanding
All these security measures mean that the data must be stored centrally. Not, as is always intended with blockchain technology, decentralized. Critics therefore expressed their concerns about yet another Silicon Valley company, which will have global power, under a so-called inclusive banner. For example, Meta’s products are “built to better bring people together and form stronger relationships”, something that we can sometimes question with all the experience in recent years.
We are seeing more of these kinds of major shifts from tasks that you normally expect in a government to ‘big tech’. Parties such as Amazon, Apple and Google are investing en masse in healthcare and education. You may find this scary, because of ever-increasing power. On the other hand, these parties can offer very effective solutions with their data.
The first integrations have already been launched. For example, you can already log in to Twitter and ChatGPT with your Worldcoin ID. In addition, it has announced an integration with Okta, one of the largest global players in online identity. The first two million users have been onboarded and with the offering of the ‘orb’ in 35 cities in 20 countries, this number will continue to rise considerably in the coming period.
A new revolution in the field of global financial inclusivity or yet another well-tried one-hit wonder? We’ll see in the near future!
Jan Scheele is active in the web3 (blockchain, crypto, NFTs, DeFi) industry since 2013. Besides (former) CEO of a web3 scaleup and founder of an advisory boutique (working for governments, family offices and several multinationals), he is Digital Leader at the World Economic Forum and Board Member at the Blockchain Netherlands Foundation (BCNL). He is writing, consulting, speaking and training regularly about everything web3, all over the world. Furthermore, he is currently finalizing his book about the rise and global impact of blockchain technology.
