Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Alex Blania: Worldcoin – The Eye Catching Crypto Coin

Episode Date: March 16, 2022

Worldcoin is a start-up trying to engineer widespread adoption for its cryptocurrency by giving away tokens. Sound too good to be true? Depends how you look at it (literally). Participants must be willing to have their eyes scanned on registration by a proprietary iris scanner dubbed 'orb'. Worldcoin says the scan is necessary to prove that users are human and to verify they only register once. The start-up has attracted big investors but it has also raised concerns among an increasingly privacy-conscious public with some labeling it a MLM. We were joined by co-founder and CEO, Alex Blania, who explained the idea behind Worldcoin and the aspect of UBI, the current number of orbs in circulation and users, and he addresses the criticisms they have faced so far. Worldcoin is due to launch later this year.Topics covered in this episode:Alex's background and how he got into cryptoThe idea behind Worldcoin and the aspect of UBIHow does the orb work?How they have reacted to some of the criticism regarding privacy and onboardingA deep dive into how the protocol worksThe incentive mechanism with WorldcoinAn overview of Worldcoin usersThe corporate structure of WorldcoinRegulatory issuesEpisode links: WorldcoinWorldcoin on TwitterAlex on TwitterSponsors: Chorus One: Chorus One runs validators on cutting edge Proof of Stake networks such as Cosmos, Solana, Celo, Polkadot and Oasis. - https://epicenter.rocks/chorusoneParaSwap: ParaSwap aggregates all major DEXs and makes sure you beat the market price at every single swap and with the lowest slippage - paraswap.io/epicenterThis episode is hosted by Sebastien Couture & Friederike Ernst. Show notes and listening options: epicenter.tv/435

Welcome to Epicenter, the show which talks about the technologies, projects, and people driving decentralization in the global blockchain revolution. I'm Sebastian Kuccio, and I'm here with Fredike Ernst. Today, we're speaking with Alex Blanilla, who is the co-founder and CEO of WorldCoin. But before we talk to Alex, I'd like to first tell you about our sponsors this week. Are your crypto assets sitting highly in your wallet? Well, you can start earning rewards and contribute to network security by staking with Chorus One. There is staking providers securing five billion dollars in assets on over 25 decentralized networks, including Solana, Cosmos, and Ethereum. Are you interested in running your own branded notes? While they have a managed white label

note as a service offering that leveraged Corus 1's highly available and proven infrastructure enabling you to participate directly in decentralized networks. If you've been a loyal Salana delegator with Corus 1, make sure to check your wallets because they've done their first ever major NFT dropped to any validator on Corus 1, and they'll be air dropping over 3,600 exclusive NFTs to its Salonadellators according to their delegation profile in December of 2021. But if you missed out on thisirdrop, they'll worry because you can still participate in the upcoming airdroaps on Cosmos chains by simply delegating to Corus 1 notes. So head over to Chorus.1 to start your staking journey.

We're also brought to you by Paraswap. Paraswap is a Dex aggregator on Ethereum. It means that through Paraswap, you can easily access liquidity on various different decentralized exchanges. The protocol automatically finds the cheapest liquidity for you so you can trade knowing that you're getting the best price. Paraswap also is very gas-friendly, also helping you keep transactions low. And Paraswrap recently added support for Avalanche, Polygon, BSC, and Phantom. You can also use Paraswap directly in your Ledger Live app. In addition to that, they also are becoming Dow. So if you have PSP tokens, that's something you can participate in as a token holder.

The Paraswraud Dow just voted for the GAST refund program. This allows Paraswap Stakers to get 100% gas refund on their trades on the top up of their auto compounding yield. So join Paraswap's Discord channel to learn more about the Dow. Go to Paraswop.io slash Discord. Alex, thanks so much for joining us today. Thanks for having me. Tell us a bit about your background and how you became involved in crypto and what led you to become the CEO of Worldcoin.

Right. So, yeah, right before Rollcoigne, I was in physics, actually. So I was at Caltech in Los Angeles, and I was working on basically how to use neural networks to make kind of quantum computations that are really, really hard to do with numerical methods, how to make them much, much cheaper and faster. And I did this for quite a while, I think, like one and a half two years. So first in Germany at Max Planck and then at Caltech and Los Angeles. And before that, well, I was always building things. I was always a hacker, right? So I had my first semi-company when I was relatively young, doing vertical farming and many other things. So I was always building.

It was always clear to me that I want to kind of start a company or a project. And yeah, then at Caltech, basically I met Sam and Max back then. And heard about Rollcoigne, I was really excited about it and got involved. Cool. So you met Sam Altman while you were at Caltech? That's correct. Right. So the original story actually was something like Sam was already working it together with Max, the third co-founder.

And I don't know, not too long, like three, four months. It was super early. It was just like the concept was there. And I remember actually I interviewed as an engineer back then at Rockland. That's actually how everything got started. And then I became friends with both Sam and Max. And it was super early and I just became co-founder. And then I brought my all the great people I met at the university, both in Germany at Caltech, basically with me.

And that turned out to be the founding team. So we have like a lot of scientists and kind of physicists, actually, like many physicists in the company because of that reason. Cool. And what are your respective roles in the project now? Well, I'm the CEO. I'm running the day-to-day business. The company is now around 100 people. It's a lot of people because it's just kind of we build hardware like on the ground operations like many things that just require a lot of human capital.

And well, Sam is the co-founder, chairman. We talk a lot and he's involved in every big decision, but I run the day to day, basically. And Max is now actually starting a new project right now. He's like a really great zero to one guy. Cool. So in a nutshell, before we deep dive into the work kind. itself. What's the idea behind WorldCoin?

So we started two years ago, right? So right when I came from Caltech, we started with this very simple idea of onboarding the world into Web 3 and distribute the value it creates fairly with everyone.

Because that itself would be a very powerful thing to achieve. You can try and achieve many new things with that. Everything from UBI to digital democracy, all of those So that was very, very exciting to us. Back then, Web 3 was not a common word use. Back then it was just crypto.

And very few people participating. And we just really thought hard about how can we accelerate this whole transition? Like how can we get many, many more people into there? Because getting to a large network and just kind of getting much more attention towards it should be net positive for everyone. And so with that idea, we thought about just launching a token by giving ownership in that token to everyone just simply for the reason of being a human. Just like when you, no matter where you are, who you are, you should have access to it and

claim ownership in that in that token. And that then should be hopefully the widest and fair distributed token there is currently, right? And that was a very simple basic idea. And then we stumbled across a very big problem that I think you talk about here quite a bit. I heard it from, from Bitcoin recently, is civil resistance. How can you make sure that ARI participate in such a network in such a system is only receiving one share of it? And it's not just creating multiple pseudonymous identities and basically the whole mechanism breaks down.

And that's why we're building a hardware device called the orb. So the orb is just basically the only solution we found to solve their problem in a privacy. preserving and scalable way, how every user can prove to the protocol, not just ours, but everyone else's, that they are in fact unique, real, alive. And yeah, so fundamentally it's two things. It's a platform. It's open, decentralized, proof of person, note that any other project will be able to use for whatever they want to use it for, and then an application of that platform, which will be the widest and fairly distributed token. There is. That is the idea. And yeah, right now we've answered all the big conceptual and technical questions we had a year ago. We've onboarded,

I think, 450,000 people. So we're ready to scale. It's a really exciting time in the company. So before you came up with this sort of final idea of the orb, and we'll get into how the orb works, had you imagined other systems that would allow you to overcome the civil resistance problem, you know, or had you looked at other civil resistant protocols and other initiatives that people are working on to try to solve this problem? And, you know, how did those come up short if, you know? Yeah, a lot. So many, many months actually. So the first, I don't know, probably like the first four or five months, we just thought about this problem and kind of read in all of those different things that are out there right now. There's just like many things,

it starts with classical K by C that you could use and that's obviously not great for a bunch of obvious reasons than what many people are doing is Web of Trust or network topology things where you just try to analyze the network of users and you try to understand who of those people are fraudulent users and all those kinds of things and basically the summary of that back then was that the only truly scalable thing that there is currently

is biometrics. It's just a fundamental solution to that It's like you take a feature that is unique to a person and you use that to make sure that that person signs up only once, right? And that's the case, for example, in India and the Adhar project, if you want to be part of the social buffer system, India, you do that also with your biometrics. That's the only solution they found to the problem. And the cool thing in crypto is you can use your knowledge proofs to make it privacy preserving.

So that was back then this big click moment for us where we looked in all of those other things. and none of that really seemed to scale or we saw many many reasons how at scale so if it goes above like 100 million, 200 million, 500 million users, it would break down. And that was not the case for biometrics.

And then we realized, okay, if you use your knowledge proofs in the right way here, you can actually make it privacy preserving. You can make it scalable and practical on a global application. But we really think about it as, like we're not, it was a really tough insight to be clear. It was nothing. We have been excited back there.

Like, okay, we have to build our own hardware device. So cool. It was a really brutal kind of insight for us. It's obviously a very hard endeavor. And we really see it as we try to innovate on all the other things that there are in parallel. And we try to bootstrap a large enough network with the orb as fast as we can. And then maybe at some point we can switch to Web of Trust or other applications. Or the orb continues to stay in other applications. We will see. But basically we think about this problem a lot. And it's the cleanest and straightforward solution we found.

So I kind of want to talk about the problem set and the process of collecting biometric data in a bit. But maybe let's talk about the obe first. So the oop is this very futuristic-looking ball. Ball-like thing. It's shiny. It's made from metal. And it photographs. your iris, right? Yeah. And what does it then do with the iris scan? There are actually, there are multiple things to that, right? So first of all, what is the problem you're trying to solve?

The problem is called proof of personhood or proof of unique humanness, right? So how can anyone, no matter where you are, where you come from, you can prove to a protocol that you are in fact unique, you are a real human and you're alive. So you're not a bot, you're not a display that tries to. to attack the system in a different way. All kinds of security concerns, of course. That is proof of person, that is proof of unique humanness. So what the orb does is it first kind of has all kinds of security mechanisms in there

to check that you are in fact a real person versus a display and all kinds of things, because basically you want to show up in front of that orb. And a few seconds later, you get your proof of person. That should not work with a display or all kinds of contact lenses, all those kinds of things. So first, the orb does a lifeness check to make sure that you're real, then it collects a picture of your eye,

calculates a unique identifier out of your eye, so the muscle of the eye. That's actually kind of, we'll talk more about biometric data sources in a second, but basically it's the only thing that actually works. Fingerprints, face, all of that stuff doesn't work. And then basically proves to an L-Den, So those iris hashes, first of all, from the iris embedding, there is an iris hash created,

so you cannot go back from that actual hash to the picture of the eye. That's the first important piece. And then the iris hash is stored on an L2 in the open, so everyone can see what is going on there. And the user can then prove a facility knowledge proof in their app that they are included in a certain set of people. So basically the thing that you achieve here is the orb proves, or with the help of the orb, you prove that you are unique in a certain set of people without revealing who you are and what your actual public and private key is.

So you stay fully pseudonymous and neither us or anyone else can change that. Yeah, that makes sense. So basically, if I scan my iris again, it'll come up with the same hash and you'll know that I'm already in the system and it will deny a new proof of personhood, right? Correct. So where do you store, where's your database of iris hasheshes? There's a roadmap we will publish around that soon. But the final state of the system is that it's stored on another L2, right?

So on another blockchain or those RIS hashes are stored. And so it's in the open, there is no central database or something like that. And everyone basically can prove that that verification happened. I think there's been a number of criticism around this, around the system. And I think the one that I've read that most people have cited is this idea that once you've created a hash of your biometric data, there's no going back. And that that hash of your biometric data can be used for any number of, any number of

applications, you know, whether it's targeted ads. or it could be something even more nefarious. How did you guys come to the conclusion that this was in fact a good idea given the amount of, and you know, it's possible that this skepticism exists in a certain circle of the population. I think that most people in the world, you know, don't think about this sort of thing,

the same way that most people don't use signal or, you know, like don't use a ledger device or don't go to great lengths to, you know, stop tracking or like things like that. But from your position of understanding these things is like, you're a smart guy, how did you square, let's say, you know, the application, which is, you know, fairly powerful of like being able to prove someone's personhood with this is actually a good idea and no harm will come of this? Right. So first of all, we are actually quite like our team is very extreme on the privacy side. We have like many, many people that have the background in the company. So we think about that a lot and we don't take that lightly. But it is very important to understand that what those zero knowledge proofs here achieve really is that your biometrics do not end up being your actual identity, but rather your kind of password. So those two things are fully separate. I as a user, I show a, I show. up in front of an orb. I verify my proof of person that I basically receive two set of keys, one set of public and private keys for my actual wallet, my Ethereum wallet, and I can do whatever I want with that. And then the second thing is my basically identity public and private key. And I can use that to then issue with C&L knowledge proofs to different applications that I'm

unique to that application. Right. So basically whenever, I don't know, let's go to the first case. I don't know, like we actually would try to track people or something like that, or anyone else, really. The only thing we could prove or anyone else can prove is that you're unique to that application. You end up in a place where I have no idea who you actually are, and that's what you want to achieve. So in fact, I think it's much more privacy preserving than anything we use in our daily lives, like a Google login or Facebook login or something. So it's just really, really important to understand implications of your knowledge proof and that implication and why it's why it's so powerful, right?

That is, I think, that is the important takeaway, and we will just explain it over and over. We will open source everything, so people can actually, they do not have to trust us, they can just look what's actually going on, and then I think it will be clear and it will be fine, because, of course, if other people have better ideas,

how to solve that problem on scale, we will be the first ones to go down that path, but at this point we don't see anything. So the person who kind of, or the organization that kind of decides whether a hash is unique enough, basically that's kind of what in a legacy world would be the attestation server, right? So basically the place where you check that something is. So how does that work if it's just a list of hashes on a layer two?

Well, so the attestation happens in the public, right? So basically the orb, so the orb records an image. The orb calculates an embedding, hash is that embedding, signs a message with both that embedding and kind of the public identity private key and sends it to a attestation L2. And the comparison happens there. And basically what happens there is a distance metric, right? So you have a, you basically have a code of numbers, a set of numbers. They get compared to each other if that distance is close enough.

you say, okay, that person has already verified, has signed up before. And if that's the case, it gets inserted in a miracle tree, right? And that's the set of unique people. Okay, but only ops can append to that list of attestations. I mean, in the beginning, it would be cool if we as a community figure out ways how other people can build their own hardware when we actually open source all of the designs and things like that. It's just a hard, hard thing to solve, of course, but I'm pretty sure we will get there. So by open sourcing the software, will that provide?

Because I think one of the things that people have been concerned about through, you know, reading, like on Twitter, etc., is that the hardware is actually doing things that it's not supposed to. So, like, that the hardware is acting maliciously, that perhaps, like, that WorldCoin has a potential to be sort of commandeered by, like, a government act. or something like that to actually scan irises. These are sort of like conspiracy theory style scenarios, but like scenarios that people are concerned about.

By open sourcing the hardware, I see that, like I can see that, you know, that would allow people to peer into what the code has been instructed to do, but without access to the actual hardware that people are using sort of in the street,

there's no way to actually verify what the hardware is doing. I guess like, I'm curious what, I'm curious if, if you have a nightmare scenario. You know, like, what is your nightmare scenario and what are you doing to mitigate it? Okay, so first to react to your comment.

I do not worry that people will take the orb apart relatively fast. So we will open source everything. We will build in the open with the community. So we will have absolutely no incentive to do something like that. I think actually the real concern I have is that, I don't know,

like malicious people try to build their own orbs and make them look like orbs, right, and try to, I don't know, full users into believing, okay, you're actually signing up for Wilkins right now, but you're signing up for something else. I think that is the absolute worst case that could happen here. Well, it will just not work with the Rolkine app

or all the other apps that actually support Rolkan onboarding, so you will have to build your own app and whatever, and that's a fraud case, of course. and what will need to happen here is just being very, very transparent and very educational around all of those things, right? I think that's a problem that everyone sees and expects. Yeah, that's by far the worst case we think about. What do you think about? Yeah, I think that's what I also had in my, like, you know, it's a fraud case, like you said.

I mean, there's no stopping anyone from doing that, you know, just like there's no, there's no no one can stop someone from like selling you some bullshit cryptocurrency and pass it off as something else or so I think there's some amount of irrational fear around this but there's also a good amount of rational fear around unknown unknowns and and I guess I think that's the thing that most people are concerned with when it comes to privacy when it comes to their data when it comes to things like DNA sequencing or any sort of, any sort of biometric data, you know, like, I got a DNA kit for Christmas. And, you know, I, like, I thought long and hard about whether or not I wanted to do it. And I ended up, like,

sending it back because I didn't, like, because there's too many unknown unknowns. Like, I know a lot of the known risks, but there's just some unknown ones that I can't, um, with. I think that this, this way of mitigating civil resistance hints a little bit of that as well. I mean, yeah, obviously, I totally, I totally understand that part, right? Like, I have the same emotion to what's many things I use in my daily life. And I don't know, like, it actually starts with using Google and what's or not, right? There's, I know that somehow it's probably not a great idea but it just makes my life easier. But I think what will happen here,

since we will open source everything, we will build with the community, is, I don't know, we can figure out the unknown unknowns. Like we are not a closed source company that do things behind doors or something, at least once we put everything out, which by the way, is just really, really hard to do with hardware. And we heard that criticism of like,

why didn't you do it so far? Well, because the, at some point the cost of a tax was higher than the rewards. But we will do it relatively soon in the next weeks. So yeah, I totally get that point. But I think it, in my consideration and our thinking, and we thought about this problem for quite a while, it is privacy preserving.

It truly is, like just by design, by the use of the zoon knowledge proofs that we were doing here. Right. And neither us or anyone else will be able to do by design of the system, kind of really really scary things. And that's the most important thing to get right. And then there's, of course, many things we have to figure out together with the community. Many things I probably don't think about at this point.

I think you're right about that part, of course. But I cannot give you like a great answer here because I think you're right. And I think we have to figure out those things together. I think civil resistance is one of the biggest problems of that space is unsolved. Everyone knows that. And that is a way forward. All right. And let's try to get it to work.

Yeah, so maybe let's put the biometric thing behind us. I've also crazy about this, but let's talk about the protocol. So basically, what technology is it based on? And I mean, if you plan to onboard the first billion users with this, how is it going to scale? Right. So the token itself is, the token is minted as an L2 on top of Ethereum, an optimistic roll-up we are using, at this point at least Hubble from the Ethereum Foundation. and we put a lot of resources to make it even more gas efficient,

so we make our own sequence implementation and things like that. And the reason here is just make it very gas efficient. But we will allow, and we are working on this right now, users to mint the token on other ecosystems too, like Solana, for example, right? Just because we want to be ecosystem, chain agnostic, the whole protocol should be like that. So the proof of person itself, of course, should be able to be used by people, no matter which ecosystem, if it's near Solana, Ethereum, whatever.

It's just a very powerful primitive that should be open. So basically, I have an attestation on each chain I choose to interact on. And then how does it connect me to my account? So first of all, we are using for this holds your knowledge proof part. we're using what is called semaphore, also from Barry Whitehead from the Ethereum Foundation. With that, with that, you can prove uniqueness or kind of inclusiveness in a set or not

without revealing your actual private key. That is what you want to do here. And yeah, so that semaphore from the Ethereum Foundation we're using right now, and we will re-implement that, for example, on Solana, because basically what is happening is there's a Merkel tree, and you use your knowledge proves to kind of create that nullifier on your phone. So that will be the hard part, re-implementing those things on other ecosystems too,

but right now it's on Ethereum. So there's two sets of public-private keys, right? So basically, what happens if I lose my, I mean, I'm not going to lose my IRIS, but hopefully, but what happens if I lose my phone? well that's uh i mean so so your normal ethereum public private key is just the the ab will have an iCloud backup right that for that part uh maybe we will implement other things like social recovery i think you're aware that's just a problem the whole ecosystem has uh that's the hard part for the if you lose your your kind of semi it's actually the semaphore key it's not

not like a normal public private key but if you lose that part theoretically you could show up in front of an orb. You need another information too for that, like the phone number or something like that. But we do not have that implemented. So right now, the simpler answer is you lose your identity at this point. And there's things we have to implement in the future for that. I have a question here.

Would it be possible? Because I mean, like, I think what's important to realize here is that the onboarding and the issuance of this. Sumofer kind of coupon is separate from the actual wallet and then like holding and movement of funds. Would it be possible for any Ethereum wallet to like if I want to use, I don't know, like my ledger or if I want to use Zengo or anything that's like wallet connect compatible, could I not just use any other wallet? Sure. Yeah. Like it will even be like even the onboarding to Rollcoigne will be possible through other wallets.

So we have an app, of course, like we're building our app ourselves because it's just like the first realization is onboarding people in, I don't know, all over the world at the same time is really, really hard. Like trying to people onboard in Kenya with Metamask doesn't go that well. Let me tell you that. So that's why we're just building also an app that makes all of that much, much easier. but everything is open and other apps can integrate even at onboarding. So let's talk about onboarding and incentives.

So basically you actually give people tokens for signing up, correct? That is correct. So how many tokens do people get? How much is that worth? And is that a one-time thing? So there's actually something new coming up here. But basically what happens is, use a user when you sign up for

for real coin you receive roguyen tokens so you get ownership in the network in the protocol that also will have governance rights all of those things right and we are experimenting with different incentive mechanisms right now like how much how much real coin do you actually

will you give out a different times of the system all of those different things but in short there will be 10 billion tokens in total it will be a cap supply system 8 billion of those will go to users and you will have implement something like early users get more because if it actually gets adopted, the protocol gets adopted more and people are using it, the price will increase, right,

to some degree. So early users will receive more tokens to still make it worthwhile for them. But I think what actually will be really exciting to see and what I guess we will see relatively soon is that other projects will also do eardrops through the roll-coin network, right? It's basically like this billion user table, the Bologi is always talking about, or at least mention it often and send this blockposts around, right? It's like it will be an open database of unique humans that you can just, I don't know, distribute ownership in different things towards too. So my guess is relatively soon users will not only receive Rokine but other tokens too. So the public narrative around Webcoin kind of is centered around this UBI notion. And basically

to me, something that is given out once is kind of, of it's an airdrop, it's not a UBI, right? So basically a UBI would be something, an income that you actually get on a regular basis. Sorry, I probably thought a little bit too complicated here. So yes, use a user, you will receive your willcoyne as a gradual unlock, right? That has many different reasons. So I don't know, let's say you receive 100 real coin. You will receive those 100 real coin over two years and like a small piece of it every week.

Yeah, I mean like why we are so excited. I mean, like both Sam and I, we are just personally really excited about UBI or at least something like that will be the question how it actually is built in detail in the future. But when AI and any kind of AGI comes closer, we will need something like that.

But I don't know, there's just how much money do you need to give away? So Rokan will do a part for that, but we cannot solve the problem our own. Like other people will need to jump in and use that proof of personal layer to do their part as well. Like not one single entity can

provide you guys to the whole world, of course. So with a fixed supply, like how long, how long until this initial supply of WorldCoin is exhausted? So like, we shouldn't expect that like in two generations from now, people are still onboarding with the orb within the hopes of getting WorldCoin. They might onboard with an orb device or something similar in order to prove their identity and have access to, you know, all of the sort of additional services. and things that people get by proving their identity, but they're not going to be issued the world coin, right?

Right. It depends really on how the price develops over time and things like that, but it really is designed with the thought that everyone should be able to claim a share of it. So until later you come, you will get less, but it should bring us to three to five billion people at least, and if everything goes right, more than that.

Yeah, but I mean, like, let's imagine like a, you know, best case scenario, you know, seven people on board, seven million, seven billion people on board in the next five years. And then like there's just like, there's always new people. Like there's, there's always people being born every day. So if we have like all the world's population and plus, you know, like mothers are putting the orb in front of their newborn babies in order to get, you know, their, you know, they're, World coin tokens, at which point does the supply get exhausted? Well, we will see what the community comes up with. Right. Like, there is a total reasonable case to, like, I don't know, like drop a new, a new coin, whatever, maybe the community votes to expand the supply, all of those things. Like, right now, that's the problem we solve. If we get to that limit, that's already a big, big deal, of course.

And then it should be commonly on. Okay, so governance could at some point increase the supply? I think so, yeah. All of that stuff is not figured out. We also will figure out together with the community, but that would be cool to do. So in addition to people getting white coins for signing up, people who sign them up, so the operators also get tokens, right?

That's correct. But they have to buy their orb up front. So basically they're kind of renting it from the protocol. That will be the final state, right? So you will probably have to stake some amount of rock coin. You will receive an orb and you can use it. And then you will earn a sign of reward in roll coin for every person you onboard or re-identify.

There's a lot of things going on here, actually. We will also publish a quite long blog post later on because there's fundamentally, kind of this whole incentive mechanism is kind of the crux of the problem. That's the core of the problem. Like if you really come to a place where the incentives of everyone is aligned,

like of course, like the big ones, like the team, the community investors, operators, users, like if all incentives are well aligned, so for example operators have an incentive to onboard only users that are actually kind of really understanding what is going on and really are using

whatever they're getting, they should earn more rewards, for example, things like that. So you want to have all of those mechanisms build in. That's why it's quite a complicated thing. In short, they receive an orb, they rent it from the protocol, and they earn some reward depending on how good they're doing. And again, the community governance will change the parameters depending on different countries and whatnot, but that's the short answer. So you guys have been publicly accused of running a multi-level marketing scheme with the Ops.

What's your reply to that? I don't know. Like people will say many things at some point. It is just not the case. Right. And it was really funny. Like on Twitter there was this early team video from like the growth team or something where they explained broken and whatsoever. and people made jokes about that.

But back then we literally have been like five people, a team of five people or like eight people sitting in a small apartment in San Francisco and figured things out. So like we were started up. We're testing many things. Many things will not work. Others will.

And we will move ahead. Right. So, but of course, like to be very, very clear, we will produce 50,000 of those devices a year. Right. So and that starts relatively soon. So that means, every month we will onboard thousands of new people with those orbs.

And already now we have onboarded 450,000 users to Rollcoigne, and that's only the case with 30 devices. So one device is onboarding on average of 800 people a week. The best ones are doing more than 2,000. So the numbers are much, much crazier than we thought in the beginning. But on the other hand, the implication of that is that just operational load of handling that is insane, right? Like figuring out the governance, making sure the operators are doing the right things,

are not explaining like shady things. All of those problems that you get on scale, right, that even things like Uber and whatever had in the early days, we have to figure that out, but we have to figure that out in a decentralized way in the open, which is even harder, I guess, for that case. So yeah, it will be a big challenge, and I think people will make fun of many things,

and that's fine as long as we move forward and we actually get it going. So I'm curious, who are these 450,000 people? Where are they mostly concentrated? and like, yeah, what's the kind of demographics of the people that you're onboarding right now? I know you had some onboarding. Some people in France, like I live in France.

I know you had some people with an orb here, yeah. Oh, that's cool. Okay, so like first of all, what was the objective, right? Like over the last few months, the objective really was just talking to users in as many locations as we possibly can and kind of figure out what do they understand, what do they not understand,

what works in terms of operating, incentives, all of those things. So we really were like full on in testing mode. And so that means we took a small number of devices, only 30 of them, because the media attention is just really high. It's like a shiny thing that shows up in front of, I don't know, like in a big city that attracts a lot of attention. So small number of devices.

And then we try to spread them as much as we can all over the world. So everything from Norway, people have operated them in troms or Norway, in like, I don't know, minus 10 degrees Celsius and then the orb broke down to everything, like to Cape Town, Chile. So really all over the world, I could show you, I guess we do not have video sharing here, but I could show you a map.

It's really all over the place. Everything from Euro to Africa, Indonesia, India, Chile, and quite evenly spread. But the thing you learn relatively fast, which was surprising to me, is that the biggest thing to figure out will be to find the right operators

and you really want to find kind of young entrepreneurial people that otherwise would run companies. So kind of this YC application process that's really how we think about it because you have a strong perido distribution going on here. The most productive ones onboard

like many, many more people because for example in Kenya one operator led the local crypto club and then started people onboarding in universities where like the the crypto user density is really, really high. So in short, smart operators will figure out things that no centralized entity could ever do.

And that is why we're doing that, right? Like find smart, young, talented people all over the world, they will find how to explain people Web 3 and onboard them into it. Is that a tangible upside for the people receiving work coin today? I mean, is it tradable? No, it's not. So right now in the testing phase, users receive IOUs and Ralkoan that will go online when the main it goes live. So that is what.

I imagine that's difficult to explain to people. I mean, so basically for Web3 users, I mean, this is something that we're used to. But if you go to Nairobi and say, please look into this. No, you don't need to smile. sort of thing that's I mean, what do you tell these people why they should do this?

Yeah, of course. You're saying it exactly right. It is different and that's why it's difficult and that's why it's actually so cool that it already works. Like all of that, the whole last year, and again we will publish much more about this, but the whole last year was super surprising to us,

just like the scale, how it works. And what those stories, those operators tell is very, very different. Right? So, for example, I don't know, when you, when you interview users

in Kenya and those universities, it's about Web 3, kind of rock and will hopefully soon be the widest dispute and Ferris Network, and you get ownership in it before it actually goes live. And just, I don't know, like young people find that cool and exciting.

And then you also receive a proof of person. Later on, if people actually start building things with it, you can use for that. So you're right. It's like those operators, they do a long pitch, and in many places because it's hard to explain.

But what will happen relatively soon is that Rokane will become a platform for other projects and protocols to also distribute their ownership because that was actually quite recent change. We're really, really excited about is kind of we want to bring the community with us and not only our tokens or other people should be able to do that too. And I think we will see that relatively soon. How do you police operators? So basically, I mean, if the operators have a much,

clear a picture of what the possible upsides of the token are, how do you prevent them from saying, look, I don't really want to explain this, but I'll give you $2 if you look into this op. First of all, right now operators receive, they're not receiving real coin I use. They're receiving stable coins paid by us, right? That is the case right now. When the many goes left, they will be paid by the protocol. How much do they get per person?

I do not have the exact numbers in mind because it's different for different locations. Later on there will be again like a community government auction mechanism basically going on to find the right price, given on how the market goes. And right now we just try to estimate, okay, what does the opportunity cost for someone to, I don't know, work an hour in Norway and work an hour in Cape Town and you try to cover that. And you understand, okay, how many synaps to those people make. and that is everything from $1 to like up to $5

per sign up depending on where you are I think that's roughly deranged but I can check it up and let you know later and to your question actually you asked one of the most important questions which is like how do you align operators incentives with the ones of the protocol right so in the extreme case

you could imagine an operator going or showing up in I don't know let's take as an example like an elderly home like people that have absolutely no idea what crypto is and the operator goes in there and signs up all of the people because that's just the easiest way to earn and reward.

So what do you have to do? And that's a hard thing to do. You basically have to measure kind of a quality metric in some way. And these are many things, right? Like users afterwards answering kind of governance questions,

like how much do they actually understand what is going on? That's the easiest thing you can do than afterwards, okay, do they actually transact with the protocol and things like that, because all of that also has to work decentralized, which makes it even harder. And then what do you want to do is you want to have a feedback mechanism to the operator. So operator earns more if the user actually is an active user and, I don't know, answers the governance questions in the right way. And that should be much more because then those

operators, they go to crypto conferences and not to, I don't know, like whatever, an elderly home in the extreme case. So that is a really hard thing to figure. out. And to be clear, like, one of the hardest things and really did not work in the beginning. So we saw all of those cases happening. We saw it happening, for example, in one occasion that, like, an operator onboarded people without phones because we did not have, like, this feedback mechanism implemented. And that's, of course, not great. But that's because of where we're doing testing. I'd like to talk about the WorldCoin, like the company and sort of the organizational structure. So I think WorldCoin is a U.S.-based company in San Francisco, but can you talk a little bit about the corporate structure?

Will there be a foundation? What does that look like? Yeah, so I will tell you where we are right now, but there are still many things to figure out. And I actually would love to brainstorm with you if you have great ideas. But so right now, there's a U.S. entity, like a normal company. we have people based in the United States. Okay, actually, so there's a U.S. entity, there's a German entity, and then there's a Swiss Foundation. So these are the things that currently exist.

And why did it is the case? We have a team in the United States, but that's actually very small at this point. Most of the people are in Europe, and there's this very funny backstory. We actually ended up in a small town in the middle of Germany. because during COVID, we were building harder devices. Like we had to go to an office, and we really started Rollcoigne in January before COVID started. So like in March, COVID hit. In January, we started working on it.

And it was really hard in San Francisco to go to an office or to a lab even to build things. The regulations were just super strict. And some of us, including me, had German passports. So we flew everyone from San Francisco to the small town called Tenetloa next to also a small town, Erlangen. and rented a big place there, rented like houses around it, and just flew everyone in there,

and we just had crunch time for many weeks. So anyways, that's why we were still here. We have a lot of hardware equipment, and it kind of became a meme in the company. Right, so many people in Germany, some of them in San Francisco, and there's the Swiss Foundation now. Yeah, so the Swiss Foundation should do the token issuance later on.

The thing I'm trying to understand right now, and maybe you have, like, good input here, here like good ideas is how to actually kind of set up the Dow structure in the right way. Right. Like so right now there's a company. It's called tools for humanity. But obviously like this me, I saw many times on Twitter directed towards me like if your currency has a CEO, it's not a like it's not a cryptocurrency and all of those things. Right. Like we understand that. That's not the not the goal. So we want to figure out a way like how we can give as much governance as we can to the community and kind of put a legal, legal structure behind that. But that's, that's still never works.

Cool. And Alex, your VC backed. So last year you actually raised 25 million at a valuation of 1 billion from the crypto All-Star, so A16C, Z, CoinBase Ventures, Coin Fund, SBF and so on. Let's talk about the business model of WorldCoy. So in a way, you've reserved 20% of the World Coin token token. for investors and developers. So basically inside us, right? Yeah. I mean, no, no. So how it's actually structured as 10% to the foundation and 10% to investors broadly specified.

So right now these are just internal investors, like as you said, like VCs. But again, we were trying to find a way how to broaden that investor base soon. But more about it later. So, yeah, that's the case. Okay. And so how does this square with the mission of a fair launch?

So basically if you say basically everyone, basically this cryptocurrency, the value proposition is basically that it's as widely distributed as possible and then basically 20% is retained by very small, I mean, you know, but compared to, you know, the entire webpocket. population by a very small set of individuals. How does this square up? So first of all, I think as you probably know, compared to other projects, it's actually a very, very small fraction, right?

So it's basically as far as we thought we can go in terms of just giving it to users and the community while still funding the project. They just have a simple economic question. In a regulatory world we live today, the best way to get, capital to build something like that, RVCs. And I know it's like an anti-meam in the crypto space. Actually, like Chris Dixon and people like that we're working with are some of the smartest people I know. So I'm actually really, really happy to have them. So yeah, and then you just make a calculation. I'm really flattered that at this point in time, like everyone says, like, it's crazy,

like whatever, 20%. But when we have been 10 people in the middle of the bear market in San Francisco, it sounded like an insane endeavor. And everyone gave us the feedback back down. Like, you will not make that work. You will have to kind of do more pre-mine. Otherwise, you will not be able to fund it and we really stick with it. And trust me, it was a really, really tough thing

to do and it will be an even tougher thing to do in the future because building hardware and being on the global scale that just requires capital. And it's a hard discussion. We have it over and over. So, like, of course, Twitter and the community, things like, it's a lot of investors

things. It should be more. So that's the trade of you're navigating. And yeah, if people have better ideas, what we can do, I would love to hear them. But just giving the situation, you launch a company today, you cannot do ICOs as you could in the early days. You have to get funding for that. It's like, what other options do you have? That's a question.

And because fundamentally, where you want to end up, right? Like, all incentives should be and will be aligned around the token, not around a company. That's the other important boundary condition. or like we do not want to sell IP of an orb or like I don't know see people building i don't know using those or like selling that the irisgaining technology or like whatever that all of that stuff is off the table right all of that IP goes in the foundation so all incentives are aligned around the token and that's why you have to have that that allocation reserved does it make sense yeah i think make sense. I think

there's examples and I think the fact that you're doing hardware makes it particularly unique because there's there's an added cost there that you don't have if you're just a software project. But like if you look in the Cosmos community for instance,

I'm citing this example because I'm close to that community. Projects are raising funds from foundations from you know, sort of like grants programs and things like that. And they're able to launch their projects and launch the token without, you know, like massive, like sort of VC backing. Like in your case, it's obviously different because of the hardware.

But yeah, maybe there's like maybe there's an opportunity here for someone to figure out a better model, especially for something that is so seems like it should be a sort of public good like not only the civil resistant identity but also like the open source hardware it really feels like it exists in public good territory and so there and in that case you know like what are the types of organizations that have money

that are less incentivized by just purely returns but more incentivized by like the vision and like supporting the vision and the mission whether that's you know like foundations in the crypto space or uh foundations or like non-profits that uh you know help people be financially sovereign or like this this sort of thing so maybe maybe there's a an interesting model here i totally agree with all of what you're saying and it it will become a public good like that's the That's the whole goal of what we're doing, right? And I don't know, like, it would be amazing if people figure out other methods, but to be honest, I don't know, it's kind of like an anti-meam in the crypto space,

I think we see it at this point. But again, all of our investors are, like, I don't know, we selected them a lot, like many, many people who did let it around and things like that. And the investors we have are very aligned with everything we're doing. and the only way they make money is that the protocol actually works and the token increases in value. There is no backdoor or something, so there are actually value land. And if you ever talk to Chris Dixon, you will understand why it's great to have someone like that with you. And the same is true for many other investors we have.

So I think it's actually wonderful that exists, like that you have like super, super brilliant and smart people that thought about the space for many years. And they will go on board and help you and you get funding from them. So I get it's an anti-meam and I get where it's coming from, but I love our investors. Yeah, so basically I totally understand the need for funding. If you look at coins that are meme coins, so basically coins that have no obvious utility, so say Bitcoin. I would ask, I mean, Waltcoin is also a meme coin. So basically, what's the meme for Wartcoin? just to comment

to that, right? I mean, one way and certainly not a perfect way to measure it is the genie

coefficient, as you probably know, and there's like all kinds of literature why it's maybe not the perfect metrics, but at least it's some. And like Bitcoin

and other projects are at 0.9. Rokin will be at 0.4, something like that. So it's much, much better. I don't know. Like,

everyone gets ownership in this new thing. Everyone, just simply for being a human, no matter where you are, you get ownership in something new that we all can create together. And it's like a new plain field. And that's really, really exciting, I think, to many people.

But you're creating value first and foremost. So, I mean, yes, I mean, you're positioning it as a public good. But you're creating value first and foremost for the people who've invested, right? I mean, so basically the VCs, they're in this for the money. They're not in it to make the world a better place. So if you give like the equivalent of what you would give a billion and a half people to 500 people who funded you in the beginning, doesn't that, do you think that doesn't make it extremely unlikely that the remaining people will kind of coordinate around that system rather than a system that doesn't have that, right? So basically if you have the entire distribution of Worldcoin and 20% goes to the people who kind of started it or financed it in the beginning, don't you think this will be forked? And I mean, I'd see where I'm coming from is that I don't see how this is how this is not going to arc people the wrong way.

I think that's fair. But again, if people have ideas, other ideas, what we can do here, I will be the first one to talk about that. Like maybe there's even a way how we can issue like, I don't know, like another token with like different rights or whatever. Like there's all kinds of things we can think about. We had this discussion with Balagia actually recently. So I totally get it. I think given the bounty constraints we had and we thought about this for like a lot of time and we just, you actually need money to make that work. I think it's the, yeah, it's the best end state.

that was achievable. Yeah, I'd like to talk about the regulatory side a little bit. So, yeah, I mean, you're aware of what happened in the fallout of Libra, and that project, I think, stirred a lot of shit to put things lightly in terms of like regulatory awareness around crypto and around these, you know, like kind of global currencies that might compete with national currencies. What do you feel as a state of things in the jurisdictions that you have started sort of like launching the project?

And are you concerned about, say, regulators in Europe, for instance, you know, like prohibiting these sorts of currencies from even existing as the MECA regulation hints at and is accelerating perhaps because of the Ukraine conflict. Yeah, I mean, of course we are concerned. So level one concern was certainly and is the United States, right? There's just a lot of, it's not even, it's, you're basically just flying blind. As I think you probably heard for many people, there's just a lot of regulatory uncertainty. And that's why we will not launch in the United States, at least the token, you will,

you'll be able to receive your proof of personhood, kind of your identity piece, but you will not receive the token. And also the team is located outside of the United States to large degree. We just don't know what will happen there. And like many people also don't know that, I guess. That's no surprise.

So that is level one concern. The European Union, as you just mentioned, like there's recent developments that are also concerning. I think particularly, the craziest thing that happened recently is kind of thinking about banning the proof of rock chains, which was just scary to see. I was in the room with the people writing the paper refuting that thesis,

so, or that regulation. So, yeah, yeah, I'm very much close to the people that are doing the hard work trying to not make, make this regulation not go through. Okay. So you know much more than me about this.

But, yeah, I mean, we think a lot about regulation. we have extremely talented people and our legal team thinking about that problem a lot. But yeah, so number one is we will launch not in the United States for exactly that reason. We will monitor the European Union

but otherwise we will just comply wherever we go. We are also obviously like in a simpler situation than Libra. Yeah. Yeah, it's unclear I think at this point. And I think like the the conflict in Ukraine will certainly

accelerate things on the regulatory front. I mean, I think just today, like Christine Lagarde made some comments about how we like really now need to regulate and like Mika needs to be fast-tracked and that will likely not be great for the industry, I presume. So like what's your goal here? Like, you know, if WorldCorp succeeds and, you know, we fast forward 20 years from now, how will it have made the world a better place? It will be a major public good

that the whole ecosystem is using to solve civil resistance. It will have been the biggest onboarding into Web 3 that the world has seen so far. I think that that's by far the most exciting thing for all of us, that it will give people access to a system that otherwise would just take much, much longer. I don't think it would not happen, but we're just in a position to actually accelerate it,

and we see that working. We actually see a path to go to a billion users and less than three years from now. And that was very, very surprising to us and crazy to us. Yeah, it will be something where people can try new things. Maybe UBI will come. I think in 20 years the most exciting thing actually would be that UBI is deployed at least to some subgroup of people

or something with that. And everyone has access to a privacy preserving scalable proof of personhood. It was like many, many answers in there, but I think you get the point. So, Alex, if you zoom out a bit, there's actually a couple of projects that I'm in a similar position in the Web 3 ecosystem, right? So I'm thinking of things like the good dollar, proof of humanities or Circles UBI. How do you see World Coin with respect to these?

Well, first of all, I'm excited to see other people solving, I guess, one of the hardest problems that there is in that space, right? So I think it will be, like, hopefully just like a great coexistence where we will figure out different things at different times and can just adapt and learn really, really fast. It's a way too big problem to be solved by one project alone. Well, I think it will be very surprising to people to see how fast the scales. Because there is actually, like, I think it will be at least double-digit millions by end of the year. So it will scale much, much faster than people expect at this point. That's everything we measure internally and we are really surprised by.

So Alex, I mean, the true test of time will be how many of these people will actually use their identity for anything, right? So basically because just because someone signs you up doesn't mean you're an active participant in the network and you're actually using this for anything at all, right? So basically, when do you expect the network to be live? Or when do you expect people to be able to interact with their identity? Well, I mean, we will open up the SDK and all of those things relatively soon. So less than three months, that part will be open source and people can start building with it. And then I'm excited to see what the community actually comes up with. there are many interesting things going on here

that will make it very different than what people are used to. Just to give you one example. One example is that those orbs lead to a very different network distribution than normally because you basically have operators, you have talent operators that show up in front in a certain city or geography

and then they get to high penetration really, really fast. So the density will be much, much higher compared to other crypto networks and that's what we already observe. So you basically versus like a normal crypto network, at least like broadly speaking, ends up being widely distributed, like equally all over the world with people that are interested in it. What the Rokane network will look like is you have clusters of like high penetration,

double digit percentage penetration, like different locations. And then it starts, it starts growing. That will have many interesting implications. It will hurt to tell what that actually will do and what will people build with that. but that was one thing that was very surprising to us. So in short, we are, like this identity part is a platform and like we need a community to build things with that, of course. So we will open source it, we will grow it.

And I think if it gets to a certain scale, many people will build with it because it's just, you will have access to many, many users and a lot of attention. So will you or your VCs actively incentivize the adoption through other projects. So basically, I mean, will you give out investments or grants to projects to actually use your SDK?

Yeah, I think so. However, I want to figure out a way how that it's also community governed, right? So that there's some community fund or community grants and like it's getting relatively fast. The community actually decides what to invest and what not,

but yeah, of course, it will happen. Where does the community currently convene? So basically if our listeners want to get an idea of what the thoughts in the community are, are there telegram groups or Discord or where do they go to check this out? We are launching. So right now there's not much going on here. We actually had to step from zero to one with all of the hardware and things like that. So relatively soon we open source the first parts of the system, launch a Discord, a telegram, all of those things and really involved the community and the most important decisions we're doing.

And how can people stay up to date on this? Is there a mailing list that they can subscribe to or follow you on Twitter? What's the idea? Well, I think the best thing will be to join our Discord. And I think we will certainly also do a mailing list. All of that stuff right now just doesn't exist. We have worked like really really hard over the last two months to just get that however part off the ground.

And now it's there. So the project will change very, very significantly in the coming weeks. And I'm excited to tell me more and show you more. Cool. But it really goes to kind of from now, of course, we didn't talk much about it. And that will change. So we'll talk much more about it. It will be open source and people can start building with us.

I keep my eyes open to see where this is going. Thank you for coming on. Thank you for coming on, Alex. It's been a bit of it. Thanks for having me. That was fun. Yeah. If I could just like, if I could just sit up here, like, so I feel like my, my, my, my squeamishness around, look, I mean, bottom line is like civil resistance.

If you, if you, if you figure out identity, you unlock a ton of use cases. And I mean, we've discussed this on the podcast at length with tons of people. And that's an important component to unlocking. like the full potential of crypto and like a world internet and like breaking down borders and whatever you want like that's a big problem that needs to be solved we talked about some of the projects like proof of humanity and all these other things that are trying to do this in different ways this is i guess this is the um you know the hardware option is a super efficient option but it does come i think with some with some drawbacks which like we which we discussed earlier and i think

I've come away from this still squeamish about getting my retina scanned to onboard the system, but confident that you guys will make the right decisions in order to make this as secure a system as possible. Yeah, I think that's, I think that's the takeaway from this conversation. I don't know. Federica, what do you think? Yeah, so basically my takeaway, way I think is. Yeah, I think biometrics is somewhere

I wouldn't go. To me, that's too invasive. And I think I've come away with this, with a renewed sense of that, you know, web of trust is the way to go. Because that's also, I mean, to me, that's the

only way that I can see that this can scale in a truly decentralized manner without being orchestrated. And I mean, you don't really want to have a conductor for this. So yeah, to me, it's web of trust all the way. Well, that would be cool.

We just don't see it working yet. But of course, if that works, it would be awesome. And again, we are also working on this internally. But it's just, it doesn't work yet. And no one has seen its scale. All right. Thanks for having me. Thanks so much.

Thank you for joining us on this week's episode. We release new episodes every week. You can find and subscribe to the show on iTunes, Spotify, YouTube, SoundCloud, or wherever you listen to podcasts. And if you have a Google Home or Alexa device, you can tell it to listen to the latest episode of the Epicenter podcast. Go to epicenter.tv slash subscribe for a full list of places where you can watch and listen. And while you're there, be sure to sign up for the newsletter, so you get new episodes in your inbox as they're released. If you want to interact with

us, guests, or other podcast listeners, you can follow us on Twitter. And please leave us a review on iTunes. It helps people find the show, and we're always happy to read them. Thanks so much, and we look forward to being back next week.