Front Burner - Worldcoin’s utopian aims, dystopian fears

Episode Date: August 9, 2023

A metallic orb scans your iris and turns it into a numeric code, providing a unique ID that confirms you as human. This is the process people in dozens of countries are undergoing for Worldcoin, a new cryptocurrency project that’s handing out free tokens and even local currency in exchange for biometric verification. The project claims it can prove our personhood online and enable voting, financial equality or even the distribution of a universal basic income. But even before its official launch late last month, Worldcoin was already facing accusations of deception, exploitation and crypto-colonialism in countries like Kenya and Sudan. Today, Jacob Silverman explains the utopian promises and dystopian fears surrounding Worldcoin. Silverman is co-author of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud, and he’s also the host of Front Burner’s special series The Naked Emperor. For transcripts of this series, please visit: https://www.cbc.ca/radio/frontburner/transcripts

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Tamara Kandaker. So imagine this. You're in a room looking at a metallic orb. It's just a bit smaller than a bowling ball. You walk up to the orb, look into a black window on the front of it, and it scans your eye and then captures the details of your iris. Those details are then changed into a numerical code and this code becomes a digital ID. Proof in a time of bots and advanced AI that you are human. A little further back maybe, and I slide open.

You got it? Yes. So now it's taking the picture, isolating the iris, generating a hash, testing the hash against the known database of hashes to see if it's unique. This might sound like utopian or dystopian fiction, but it's not. It's the very real process OpenAI founder Sam Altman wants you to go through so you can use his new cryptocurrency, WorldCoin. I started thinking initially that it would be quite powerful if you could have the biggest network, like the biggest financial and identity network imaginable. You could have something truly global. Although it's been testing since 2021,

WorldCoin officially launched two weeks ago. In exchange for scans of their eyes, its backers have been offering people WorldCoin tokens or straight up cash. And they say they've already done this in 34 different countries. AI entrepreneur Sam Altman, who runs the company behind ChatGPT,

is offering people £40 worth of a new digital currency to visit physical scanners in cities. Well, and Kenyans from various parts of the country continue to flock at the key ICD grounds in Nairobi for WorldCoin registration. According to WorldCoin, their network could be a solution for global inequality, election fraud, and giving out a universal basic income. But the project is already under quite a bit of scrutiny.

There is a black market and accusations that the collection process for iris scans is deceptive and exploitative. Jacob Silverman has been watching the WorldCoin rollout pretty closely, and he's on the show today to talk about the concerns around it. Jacob Silverman has been watching the WorldCoin rollout pretty closely, and he's on the show today to talk about the concerns around it. He's the co-author of Easy Money, Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud. And he's also the host of FrontBurner's special series, The Naked Emperor. Hi, Jacob. Hi, thanks for having me. So, Jacob, I think to understand WorldCoin's ambitions, we should maybe start with the most famous person associated with it, co-founder Sam Altman. And for people who don't already know who Sam Altman is, how would you describe him?

Sam Altman is a rising tech mogul or maybe is already risen. I mean, this is certainly his moment because he is also in charge of a company called OpenAI, which makes chat GPT, one of the most popular or best known of the generative chat apps. one of the most popular or best known of the generative chat apps. And he's become very big in this world of AI and its various new forms and of cryptocurrency and tries to think in these big kind of world-spanning projects. Yeah, I understand he's also a bit of a doomsday prepper in that he believes in a lot of like utopian, dystopian ideas about tech. I wonder if you can tell me a bit of a doomsday prepper in that he believes in a lot of like utopian, dystopian ideas about tech. I wonder if you can tell me a bit about that. Yeah, he's 38 years old, so firmly in the millennial category. And he espouses a lot of the sort of messianic slash apocalyptic AI views that you hear from people in his cohort. That is that AI might somehow save the world,

but also it could be a disaster like nuclear weapons. I'm more worried about an accidental misuse case in the short term, where you know, someone gets a super powerful, like, it's not like the AI wakes up and decides to be evil. But I can see the accidental misuse case clearly. And the bad case, and I think this is like important to say is like lights out for all of us. So there are, of course, some contradictions and problems, I think, with this kind of worldview. But it's how he talks. And he claims to own some land in California, I believe near Ojai, that has kind of the requisite prepper gear in case there's some disastrous or world ending event. You know,

in a lot of ways, he seems frankly like a typical or highly representative example of this kind of rich Silicon Valley executive who's at once, you know, partying in Tulum, Mexico with friends, but also talking about the end of the world. Right. Okay. And so this is where we get into WorldCoin, which seems to be trying to solve a bunch of the problems that Sam Altman is worried about, starting with something WorldCoin calls the problem of personhood. And what does that mean? Sure. The problem of personhood refers in part to this idea that increasingly online, you don't know if someone is a human being. There's a lot of advantages we like about the WorldCoin solution. And I think although the privacy vision is different than what people have maybe traditionally thought about, I think it's one that's very compelling. The ability to say, I'm a human, I created this content, or I'm at least endorsing this content. That's going to turn out to be important too. There's the old cartoon that no one knows your dog on the internet.

Now there are lots of bots and other sort of automated actors. The idea is also that in the age of AI, there are going to be perhaps infinite kind of digital actors spun up on command on the internet. And you need a way, kind of a universal CAPTCHA test almost, to prove that you're a human being. And I think you have to start at the very beginning by asking, is this actually a problem? And is this something that we want them solving? But that's what they claim to be doing. Right. And tell me a bit more about WorldID and how it's

supposed to solve this problem of personhood. Sure. Well, the technical aspects are pretty complex and go over a lot of folks' heads, including mine at times. But they claim that they're using basically an iris scan, a biometric data scan of your eyeball, which is done via these orbs that they're manufacturing. To sign up, just find the nearest orb right on the app. You can even book a guaranteed time to visit. I mean, it all sounds dystopian pretty much off the bat, or at least rather science fictional.

And that you basically have a digital representation of yourself, an ID that's confirmed through these orb devices and through the world ID network, but is supposed to be secure and solving these concerns that they have about cyber attack and things like that. Again, there's not much reason to necessarily think that Sam Altman's company, which is actually called Tools for Humanity, but they pretty much refer to everything as WorldCoin or the WorldID. There's not much reason to think that they have definitively solved these issues or advanced on the technology beyond anyone else, but that is the message that they're selling.

So WorldID is one part of the WorldCoin project. and the other part of this is a cryptocurrency, like a digital coin, kind of like Bitcoin or Ethereum that you can trade online. And if you read the language from the project, it sounds very altruistic. I was reading their white paper and it says that they want the network to be globally inclusive, owned by the majority of humanity. They want it to be a public tool that enables democratic voting and creates a path for a universal basic income. And how do they claim WorldCoin will be able to do all of that? Yeah, the aspirations sound nice, certainly in the abstract. And they are, I'd say, sort of typical of a kind of techno-humanitarianism, especially one that we heard more in the earlier days of crypto just a few years ago, before a lot of, frankly, crypto projects collapsed outright.

With this network, with the WorldID project, what I think is worth pointing out is that there is this token called WorldCoin. It runs on the Ethereum blockchain, like a lot of other crypto tokens. And like a lot of crypto projects, giving out the token is sort of an inducement for people to use the network to grow the project. In their case, they are wrapping this in a lot of democratic, egalitarian, emancipatory language. I can't necessarily tell you how receiving a few dollars worth of a volatile token that's traded in unreliable crypto markets might liberate one financially. But this is kind of the broad, vague story of financial inclusion that a lot of people in tech and crypto have tried to tell for a number of

years now. I mean, you'll hear a lot about banking the unbanked or giving people financial tools, especially in the global south, where they may not have traditional banking access. Again, in the abstract, I think some of this stuff sounds helpful. But then when you drill down into the details, well, how does this actually work? What if something happens with the network? Is there a local world coin subsidiary that can deal with problems? I mean, is it legal in some particular countries? Many kinds of questions like these, you start to see that this kind of world-spanning financial network maybe isn't viable in practice. In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem.

Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years. I've talked to millions of people and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo. 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together.

To listen to this podcast, just search for Money for Cops. I guess it's worth underscoring, since Sam Altman is the CEO of a company that made ChatGPT, which is really accelerating AI's ability to impersonate people, it's hard not to see this as an attempt to solve a problem that he's creating, right? Yeah, there has been some writing and argument in that direction that Sam Altman, in particular, seems to be sort of pleading with the public, don't stop me from doing the things that I'm doing, which of course seems a little disingenuous. But we hear that a lot around AI. I mean, if you think AI is so dangerous,

then why not stop or slow its development? Maybe it should be developed in a lab like a biocontainment type lab, but the equivalent for the computational world, you know, if this is like a disease or nuclear device. So let's talk about what this rollout has actually looked like around the world. WorldCoin says it's already in 34 countries and that more than 2 million people have signed up for a world ID, although they did say they'd be at a billion at this point. So what has the company been doing to get irises scanned in all these different countries? They have used contractors mostly in a lot of countries around the world. But again, I refer broadly to the global south. I mean, countries in Southeast Asia,

like Indonesia or in sub-Saharan Africa, where they hire local contractors, people who don't necessarily have any affiliation with even the tech industry. And they'll go out into towns and cities and villages, sometimes with cooperation from local business or political leaders, you know, they'll set up a stand somewhere. And this has been going on for a couple of years, there's been sort of a soft rollout. And people had their eyeballs scanned and were given either usually a gift card or perhaps a little bit of local currency, maybe nothing, maybe a promise of future WorldCoin tokens. So it's important to note that WorldCoin, the token,

the cryptocurrency that's supposed to help power and grow this network, only actually appeared a couple of weeks ago in the initial coin offering, as it's called. But people received IOUs saying, you know, you'll get $10 worth of this at a later date or something like that. So even just in the way I've told it so far, you can see that there's a lot of variation. There's sort of a set of practices, perhaps, but, you know, some people thought they were exploited. Some people got nothing. Some people are only now getting those tokens. I think a representative story is that a couple months ago, Sam Altman tweeted about how he signed up for WorldCoin for the first time for his own product.

But he did it overseas, not in the U.S. where he normally is. And that's because the company seems to be hesitant to actually roll it out in the U.S. because of securities laws and perhaps biometric privacy issues and things like that. So while it aspires towards this universality, WorldCoin doesn't seem to be able to be one thing yet so far. You mentioned that they've been really making a push in the global south, and you kind of touched on this, but there have been investigations saying that WorldCoin's collection process has been deceptive and exploitative. And I wonder if you can unpack that for me a little bit. What are the criticisms that they faced on that front? I think it resembles in some ways a kind of MLM,

multi-level marketing scheme, or an exploitative scheme to just extract names and signups and data from people. I think some contractors were basically working on commission or volume. And a lot of people who were convinced to sign up in various locales around the world have said that they didn't necessarily know what they were getting. There's already been reports of a small black market in credentials where basically people were signing up actually in Cambodia and somehow the credentials were being sent to Chinese customers who are essentially buying the credentials of people, the iris scans of people in Cambodia. Wow. You know, I've seen this world coin push in places like Asia and Africa being described as crypto colonialism. Why is it being called that? It's a term that I think is very interesting and evocative and I think very useful at times, actually, because crypto, you know, sometimes the vision is supposed to be egalitarian and emancipatory and liberating you from the shackles of traditional finance or from an autocratic government. But what we find out often in

practice is that when crypto is brought into other countries that perhaps lack financial governance, it can sort of set its own rules and feel like it's replicating some of the exploitative practices that it claims to be against. And, you know, monetary policy, broadly speaking, is a big deal. It is considered generally the sovereign authority of a national government, even if you perhaps don't like that government. So when you have outside corporations, for-profit corporations funded by Silicon Valley venture capitalists coming in and saying, we are going to set up our own kind of parallel unregulated financial system with our own private currency, it scans your eyeball. I think you can

understand why people feel like that's sort of an imposition and perhaps kind of seizing some financial and economic power actually for world coin. So just getting back to the privacy concerns around this, there is obviously an ick factor to the idea of getting your eyeball scanned. Even Sam Altman himself has acknowledged this. But I'm wondering if that's rational, because WorldCoin says your eye's image is deleted by the orb unless you opt in to letting them store it. So should people still be worried about privacy with our biometric data? I think certainly so, because the thing about biometric data is it's pretty much

immutable, unchangeable. Your fingerprints, unless something horrible happens, God forbid, are not going to change, and neither will your iris. I think it's still hard to trust them or to really know what happens to that information or whether it actually does stay on the orb. There's been some reporting in the past that indicates it doesn't. As you just said, you can opt in to have them collect it more. And it's certainly going to be a target for other unscrupulous actors, even if you do trust WorldCoin and Sam Altman and everyone else. So that's what I think gives me pause. I mean, certainly for a lot of people, that ship has sailed or they trust Google or Apple with their fingerprint for their phone.

But, you know, this is still something I think we should always take seriously, especially because, you know, there aren't that many laws, actually, or regulations around biometric privacy in particular. In the U.S., you sometimes see lawsuits in Illinois, which is one of the few states with a good biometric data privacy law. But this is still pretty new territory. So once your iris scan is potentially out there, we don't know necessarily how that might be used going forward. Right. So essentially, the idea, as I understand it, is they want to scan the eyeballs of all 8 billion people and then use that one-time ID to give people crypto. But how does the company plan to make money? That's a good question. I think it's backers would certainly like to know, though they also were able to buy a lot of the token very early. I think there's a sense that just by simply being in control of a large network with people's

financial information could be very valuable. I mean, WorldCoin doesn't really talk very much about its own business plan. I mean, they pledged to be responsible stewards of people's data. There are there are been accusations that they collect more data than they claim. That was in an MIT Technology Review article. Their offices or warehouse in Kenya that they had was raided. Now tonight, foreigners and Kenyans operating WorldCoin will not leave the country unless with express permission

from the Directorate of Criminal Investigations. This is the latest in the circus involving some Ottomans WorldCoin, which has been scanning eyeballs for the last three days in Kenya. Their business has been called illegal in Kenya and other places. There's certainly concern in Europe. And there's a lot of speculation that these kinds of crypto tokens are, for example, United States unlicensed securities, sort of like selling an unlicensed stock.

So just offhand, there isn't a clear path, I think, for WorldCoin to be a major going business unless it somehow becomes the kind of middleman or centralized actor it claims not to be. Like a lot of crypto, the project and Sam Altman and company preach decentralization and user control and kind of democratic governance from the people. But these kinds of projects are inevitably controlled by who is distributing the token, by the financial backers of that company. I mean, WorldCoin has raised over $100 million in venture capital. So despite the kind of civic-minded and public-spirited rhetoric, I think it is going to be looking for a business model, which probably means being somehow at the center, being a middleman in this financial network.

Yeah. So I should say WorldCoin has issued statements saying some of the reporting against it has been inaccurate and that some is a narrow look at the project's early testing phase. So it doesn't reflect the real operations. And the CEO of the company that developed WorldCoin, which you mentioned, Tools for Humanity, has also said the security concerns are more of a gut reaction than objective criticism. So that's their statement. I think it's totally worth noting, especially because they have a big hill to climb, I'd say. And I think that is maybe one of the problems with this project is, you know, a lot of people need that reassurance. And this will be, I think, an issue for as long as WorldCoin is functioning, is that can they get people to let go of those very natural

questions or concerns, I think. So we mentioned how the coin itself hasn't rolled out in the U.S. and Kenya is actually stopping world coin operations completely. But you've written that world coin is part of a trend of big tech projects being launched before regulators really have a chance to evaluate the risks. So talk to me a bit about that. What other examples have we seen of this? I think the big comparison is Uber. You know, this is a company that goes into new markets and sets up shop. And, you know, there's a general attitude in tech that you move fast and break things, or it's better to ask forgiveness than permission. There sometimes is an outright disdain for regulations or laws or incumbent authorities. And I think their sense is

that, hey, if we can get big enough, we can make ourselves important and develop the kinds of relationships that prevent us from being shut down. You know, I'm speaking a little speculatively, but that has been the general rulebook that Uber has followed or that even a company like Amazon before, which is this idea that you get really big and monopolistic and devour or push out your competitors. And then, you know, the local economy or transport system or whatever might be actually needs you. Right. Whether or not WorldCoin really does blow up, I'm wondering if something needs to change here, because it seems like we're often caught off guard and it takes countries a while to realize what's happening and then it's too late. So what needs to happen to stop that in the future? Yeah, I think these kinds of things are potential warnings or learning experiences for regulators and people in government and also people in business who either want to emulate world coin or do things differently.

You know, we need to get our footing right on anything related to biometric data security or these new kinds of financial networks that are popping up on blockchains and in the form of crypto. I mean, we've certainly seen the last year the U.S. government playing a lot of catch-up since the fall of FTX and Canada dealing with some of those issues, too, related to FTX and Celsius. And that's something that still hasn't really been figured out globally. It's something that's being figured out, I think, country by country, sometimes through bruising experience. People in crypto perhaps would say that they sometimes raise their hands in horror when a country like India or China outlaws crypto.

But from those countries' perspectives, they have a self-interest and a responsibility to look after their own monetary policy and their own people. The one difference I think you see here is that even some crypto people, while perhaps believing in the technology or these kinds of networks, a lot of them actually do have criticism of Sam Altman and see him as egotistical or sort of this project as a little too grandiose. It's more about elevating world coin to some globe spanning network and not really about the future of finance or something like that. Okay, Jacob, thank you so much. This is really interesting. I appreciate it. Glad to do it. Thank you. All right, that's all for today. I'm Tamara Kandaker.

Thank you so much for listening and we'll talk to you tomorrow.