Big Brother Alert: Worldcoin Is Hot Garbage
The latest crypto coin has hit the blockchain. And this thing is one of the shittiest shitcoins these eyeballs have ever gazed upon.
For what feels like two or three months, I’ve been working on a post that touches on productivity, wages, currency and how they relate. In many ways, it was intended to be a follow up to an article I originally wrote on Medium over two years ago. The post predates this Substack and my Medium is gone, but you can still read it in-platform here if you’re curious:
In a nutshell, I essentially made the argument that Universal Basic Income (or UBI) was almost a certainty because of the COVID-era stimmy checks. My reasoning was that we had officially crossed the Rubicon with direct, indiscriminate government to citizen payments and there would be no going back in the next recession.
What made it worse was that in some cases furloughed workers actually came out ahead following stimmies and unemployment benefits - that reality is what broke everything, in my view, and I think we’re likely still dealing with the consequences of it today.
In that article, I tried to make the case that if UBI did ultimately come, it would likely have quite a bit of strings attached. To my recollection, this was the first time I mentioned CBDCs in my writing; well before such ideas truly entered the political zeitgeist. But the key takeaway from the piece was that even in a UBI environment, there still had to be an incentive for actual productivity. And that meant truly productive labor probably had to reprice higher; with UBI, the laborer would see income rise if the laws of economics and physics prevailed. Meaning, the closer a UBI gets to parity with essential work, the quicker the system collapses because very few would actually choose to work if they didn’t have to.
Two and half years later, what may challenge that thesis is the possibility that Artificial Intelligence combined with advances in robotics could ultimately create deflationary pressure - in which case, labor could theoretically reprice lower sans UBI. I personally believe the market is the best way to decide how this all shakes out and that’s what I ultimately wanted to convey in my follow up piece. However rather than publish that piece in its raw unpolished state even after several unsatisfactory attempts at finishing it, I’ve put it on the shelf for good and have opted to instead touch on the latest cryptocurrency.
Have no fear, there’s quite a tie-in, I promise.
Have you heard of Worldcoin yet?
It’s purportedly a permissionless, non-governmental crypto project that utilizes zero knowledge proofs to build a “decentralized” Digital ID system that doesn’t jeopardize user privacy. So why do I hate it so much?
Well, as has been predicted by myself and others, the UBI component comes with some of the previously mentioned attached strings.
Sam Controls The Universe
Worldcoin (WLD-USD) is the latest cryptocurrency to hit the market. After spending several hours in the white paper, on the site, listening to founder interviews and reading critiques, I can confidently say I don’t know if I’ve ever disliked the execution of a crypto project more than I dislike this one; and I’ve looked at Aptos (APT-USD) and Internet Computer (ICP-USD) so that’s saying something!
Let’s start with the backers. It’s like reading an FBI dossier of shitcoin VCs; including a16z, Coinbase COIN 0.00%↑ Ventures, Three Arrows Capital and Sam Bankman-Fried (yes, that guy). The founders are Alex Blania and Sam Altman (not to be confused with Sam Bankman). If you recognize the second name, that might be because Sam Altman is also the CEO of OpenAI, the company behind ChatGPT. Altman is now officially at the intersection of Artificial Intelligence and a Digital ID network. The latter of which intends to pass out a weekly pittance of “Worldcoin” to the filthy masses in exchange for a commitment to protocol usage, obeying the rules, and (because, of course) an iris scan.
Look, I really don’t like the idea of using biometric data to prove humanity. But if you’re going to do it, zero-knowledge proofs are probably the best way to do it, in my view. And ZK proofs are apparently what Worldcoin utilizes. Still, I’m not down with the eyeball scans.
For me, it goes completely against the notion of decentralized, permissionless systems if one must submit an iris scan to a small centralized startup in order to access a network. By itself, this is a tough sell. But let’s pretend we can get there because of the ZK proofs. This is actually an idea I explored just a few months ago.
We can use zero-knowledge cryptography to prove we are who we say we are without sacrificing all of our privacy. We can do this in an non-intrusive way and with distributed ledger technology that no central entity can control or manipulate. - Faybomb, March 2023
As I explored in that piece, because of the quickly growing capabilities of AI, we are entering an era of deep fakes that will be incredibly problematic. Proving authenticity is of critical importance going forward. However, it’s impossible not to notice the irony of Sam Altman trying to solve a future problem that he acknowledges his other company would play a part in creating. We need Sam Altman’s Digital ID system because Sam Altman’s AI company destroyed both our jobs and our ability to authenticate digital information? I’m skeptical and that’s being generous.
I Don’t Believe The Founders Are Actually Serious
Now, here’s what I believe is the real tell and it’s the reason I suspect this whole thing has been bullshit from the jump; if Worldcoin was truly about humanitarianism and creating a non-government UBI-fueled financial system, the founders wouldn’t have given themselves 13.5% of a token supply that is ended to be dispersed to everyone on the planet.
That alone is absurd, but then when you look closer at token vesting and the use of tokens for market making purposes, there is just no way you can convince me these guys are serious. For a moment, let’s pretend scanning the eyeballs of 8 billion people is even physically feasible - how long does that take? How many years? If you believe the current metrics, they’re at 2 million scans today. Long way to go, Samuel.
Of course, there is no way Worldcoin gets even remotely close to 1 billion people, let alone 8 billion anytime soon. And that’s why I believe this is all nonsense. Because within 3 years, the founders and investors will all have seen their tokens fully vested. They will have either cashed out or sold options to cash out. WLD will be worthless, and there will be a lot of people who gave away scans of their eyes for no reason.
And we still haven’t even addressed the obvious question; how is this Worldcoin UBI even funded?
The Worldcoin Protocol is not intended to generate profits to distribute UBI, and instead, it requires a separate funding source (e.g., a share of the profits generated by an AI Lab) to distribute global UBI.
Wonderful.
If you legitimately wanted to create an AI/UBI utopia, why would you launch a coin where investors and founders have the ability to dump 35% of the circulating supply years (if not decades) before the network actually reaches anything close to maturity?
Oh, one more question; should a protocol that aims to be decentralized and permissionless be able to turn you off at the beck and call of the state? Because Worldcoin can…
We may suspend and restrict your access to the Services: (i) We are so required by a facially valid subpoena, court order, or binding order of a government authority; (ii) We reasonably suspect you of using the Service in connection with a Prohibited Use…
…it goes on.
Prediction: this fails.
Disclaimer: I’m not an investment advisor.
Interesting, Sam Altman is supposedly fixing the problem he helped create.
hmmm...sounds like those three letter government agencies going after "high crimes and misdemeaners."
And how about the whole Covid 19 debacle.
Could it all be connected? hmmm