This Week in Startups - Meta's 47.5% take rate + Worldcoin CEO Alex Blania: onboarding the globe to crypto | E1434

Episode Date: April 13, 2022

First, we cover Meta's announcement that they will be taking 47.5% creator fees on their Horizons platform (2:17) and A16Z’s Crypto lead Chris Dixon ranking number one on the Forbes Midas List. Then, Jason and Molly chat with Worldcoin CEO Alex Blania to talk about the crypto project he launched with OpenAI CEO Sam Altman (11:08). Worldcoin is scanning people’s irises with custom-made hardware and aspires to reach over 1 billion people (23:21). Alex addresses privacy concerns, scaling challenges (32:45) and more. (00:00) Molly Intros today’s crypto episode (02:17) FB taking 47.5% cut of all transactions in their Horizon Worlds Metaverse (08:07) Chris Dixon named #1 VC in the world by Forbes (09:49) Coda - The All-in-one doc for teams, get a $1,000 credit at https://coda.io/twist (11:08) Interview with Alex Blania of Worldcoin (22:16) Odoo - Get your first app free and a $1000 credit at https://odoo.com/twist (23:21) Worldcoin’s iris-scanner “Worldcoin Orb” (31:32) iTrust Capital - Visit https://itrust.capital/twist to create your Crypto IRA today (32:45) Discussing the controversy surrounding Worldcoin’s iris scanning Check out Worldcoin: https://www.worldcoin.org FOLLOW Alex: https://twitter.com/alexblania FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

All right, everybody, Jason is out sick today, so no live stream, but light a little candle for him because he's not feeling great. There was, however, some crypto news that we couldn't miss out on. So I'm doing a solo show all about crypto. I know. I didn't see that coming either. Meta just announced that it will be taking a 47.5% creator fee on the platform, as in if you create digital goods on the meta platform, you will pay meta, 47 and a half percent of one. whatever you sell it for. And that is not a typo, nor did I misspeak. We will go through the arguments for and against this, but I think we can also assume this is a pretty big opening for

Apple or Microsoft to come in with a smaller fee. And then some news, A16Z's head of crypto investing, Chris Dixon is number one on the Forbes Midas list that came out earlier this week. And then finally, Jason and I sat down with World Coin CEO, Alex Blania, to talk about his Crypto project. You might have heard about WorldCoin. This is the organization that is scanning people's irises in exchange for free crypto with the intent to distribute a token to everyone in the world. There has been some controversy about this recently, but Alex was a great sport. We went super deep in the interview, and it's a great crypto show. Stick with us. This week in Startups is brought to you by Coda. Coda is the all-in-one dock for teams. If you've got a stack of niche

workflow tools or if you're buried in docks and spreadsheets. Coda is the doc that brings it all together. Startups can get a $1,000 credit at coda.io slash twist. Odu. Odo is a fully customizable and fully integrated suite of business apps that lets you build and scale your stack as you build and scale your business. Your first app is free forever and right now Odu is offering $1,000 off your first implementation pack at odu.com slash twist. That's ODOO.com slash twist. And I trust capital. Did you know that you can invest in crypto through your retirement account and still get the same tax advantages as a traditional IRA? Visit I trust capital slash twist to start investing today. All right. Let's do a little bit of news today, basically because it is an all crypto episode of this

week in startups. And both of the news stories that I want to highlight today are related to making a bunch of money on crypto. First of all, there have been reports that Facebook will evidently be taking a 47.5% cut of all transactions in their Horizon world's metaverse. I think I saw this in Casey Newton's newsletter and also on CNET. NFT Twitter is, to put it, mildly pissed. But we do want to clarify a couple things about this. One, 47.5% of anything is a high fee. No doubt about it in the digital world. However, and this is important to note,

Horizon World's creators won't actually be selling NFTs. Meta right now only lets people sell user-generated skins and animations, basically the kind of thing that you could buy in Fortnite. However, if you compare this to other NFT-enabled Metaverses or even any other digital goods marketplace, it doesn't look great. And then when you look at NFTs, specifically Decentraland and Sandbox,

which are both blockchain-based metaverses with NFTs, they charge creators 2.5% and 5% respectively. OpenC takes a 2.5% cut of each transaction on its platform. CNET noted that many NFT creator take rates fluctuate between 2.5% and 7.5%. So again, a massive discrepancy. Apple, which has obviously gotten a ton of negative attention for its 30% app store fee, is still charging 17% less on those transactions than Facebook is.

So here's a quick breakdown of Facebook's fees for every item sold in Horizon World. A 30% cut goes to meta via the Oculus platform. And then 25% of the remaining 70% goes to the meta app store. So not only is it high, that all adds up to that 47.5%. it's super confusing on top of that. Punk 6529, which is a popular crypto-focused anonymous account tweeted the following. The future of work is giving meta 47.5% of your salary, apparently. Uh-huh.

Okay, let's do a little bit of a reality check. The 47.5% number looks completely insane on paper. It is objectively very high. Apple's 30% apstor fee also looks really, really high on paper. But Facebook, much like Apple, would argue the following most likely. I don't think Facebook has responded, but we can assume that something they'd be likely to say includes the fact that the cost of manufacturing and selling Oculus headsets and also creating a fully immersive digital world is so expensive that it validates this much higher fee for using the platform. Last year, Facebook spent $10 billion on reality labs projects. That's the Oculus segment.

And then according to The Verge, Facebook now has about 18,000 people. people working on reality lab. So spending a lot of money on this. The same goes for Apple, getting over a billion iPhones into people's hands while creating this what they call safe and secure version of an app store. And to be fair, it really is, right? The well-cureed, highly secure app store did create an ecosystem in which developers could get paid for making apps, which had never happened before.

In January of this year, Apple noted that 600 million people use the app store every week across 175 countries. and that, quote, developers selling digital goods and services earn more than $260 billion since the App Store launched in 2008. That is a side note, more revenue than Starbucks generated over that time period. So what these two big tech giants is saying is we're creating a platform that no one else has the scale and resource to create an insane investment in capital and time developing hardware, maintaining this app store, and then in Facebook's case, creating a digital world.

On the other hand, these marketplaces like OpenC that are charging 2.5% take rates, for example, have a really, really low operating cost comparatively. Meta's platform also supports developers who are making money from selling apps that people actually use. We had Ryan Engel on the show in episode 1322. He's the founder and CEO of Golf Plus, which makes the Quest VR game called Pro putt. He told Jason that he was happy to develop for Meta and pay the MetaQuest 30% take rate because they had real users paying real money. Meta recently put out VR sales figures and the Quest Marketplace has crossed over a billion dollars in all-time sales in February. 124 apps earned more than a million dollars in yearly revenue and eight earned more than

$20 million with 350 plus total apps in the store. So all of that goes back to this sort of potential argument that without a marketplace to make money, no one would make any money. And so Meta is saying, we're giving you a chance to make money and we're taking, you know, our share. Chamath, you know, him as an all-investee. One shared an anecdote actually from Bill Gates saying a platform is when the economic value of everybody that uses it exceeds the value of the company that creates it, then it's a platform.

So I guess we're headed in that direction. I wonder what you think. Have we convinced you with the devil's advocacy is 47.5% a fair take rate given Facebook's tens of billions of dollar year per year investment? Or will creators continue to mock it? I'm assuming given the little that we know about the NFT universe that they're going to continue to mock it. But I guess we'll see. Another quick note related to crypto Forbes released its annual Midas list earlier of the best or most successful VCs in the world. and the number one venture capitalist, number one in the world for the first time,

was A16Z's Chris Dixon, you know, the one who leads the A16Z crypto investment team. So all signs point to crypto being a winner in early 2022. It was reported that Dixon was raising $4.5 billion for new A16Z funds on top of the $2.2 billion that A16Z crypto already raised in 2021. Dixon, of course, had a huge hit with Coinbase going public in 2021 and had invested in every single Coinbase round is how committed he was to that company and it paid off nicely. He was also an early investor in Oculus before it got acquired by Facebook.

I'm sorry, meta. So what does this all mean? I mean, I guess it means there's a lot of money to be made in various crypto projects right now. And again, like I've been saying, the people who understand it are the people who are in a position to make money from it right now, and yet there's still a lot of uncertainty about what it's all going to look like in the future. And that gets us into today's interview with World Coin CEO, Alex Blania. This is that crypto project that we've been talking about that's been scanning people's irises in exchange

for free crypto and has run into more than a little bit of controversy as a result. We have a little bit of a good cop, bad cop situation with me and Jason. We get into it with Alex, and he was a very good sport for coming on and explaining, in his own words, what WorldCoin is trying to accomplish. So let's get to that interview. Enjoy. Efficiency is one of the main components in startup success. Everybody knows this. And that's what Coda is all about. Coda is the all-in-one document for teams. Your text and tables live together in the same document, which helps any team collaborate more efficiently. They've got thousands of templates to work with. Or you can repurpose templates published by some of their best innovator,

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Molly and I have a great guest today. We've been watching this crypto project for well over a year. I thought this was a fascinating idea. I said so on Twitter, and I am a crypto skeptic. But a friend of mine, Sam Altman, is associated with the company in some way. We'll find out in a moment. But the company is WorldCoin. You can find them at worldcoin.org.

And the founder is Alex Blania. And welcome to the program. program, Alex. Thanks for having me. Excited to be here. Thanks for coming on. Now, obviously, in that year since we, everybody has been talking about World Coin, I think it's fair to say things have gotten pretty interesting. There's been a lot of press, maybe a lot more press than you would have liked. Alex is already cringing. Tell us, before we dive into sort of the controversy, though, tell us about your vision. Like, What is your intent for WorldCoyne and what are you trying to build?

I think a little bit of history, kind of context about the project, certainly helps here. So Sam back then had this very simple idea of what would happen if we could launch a token by giving ownership and a token to really every person on Earth simply for being a human. Right. Like this would be a dramatic reset. It would dramatically accelerate the transition into crypto, would create this big network. And that's exciting for many different ways.

he certainly came at it from his UBI perspective back then, right? Kind of UBI will have to make it work in the coming decades, probably. And we should clarify for people who don't know, yeah. Correct, correct, correct. And even if Rokane cannot fully solve it, it can certainly be the infrastructure for that. So this was the very simple idea, launch a new token, give ownership in it to every human on Earth. We started thinking about it deeply and realized that the first fundamental problem we will have to solve to do this is what is called proof of unique humanness. and that's a different thing than identity.

It is basically you can prove to a protocol that you are unique to the protocol without revealing your identity. And that would be a very powerful thing to do. So you can log in wherever you are, you can say, okay, I'm unique to this service, not only Rolkoin. Say I'm unique to that service.

I've not used it before. That is a very critical thing to solve, especially for Rolkoin, because if we don't solve that, the system itself is not what is called civil-resistant, meaning one person can claim if it's a malicious actor, multiple of those shares,

founding shares in Rollcoin, and that can be thousands of them, so the whole system would immediately break down. So you really, really have to solve that, and it's a tough not to crack. It really, really is much harder than it sounds initially because you really want to make it work everywhere.

It should work from Norway to Africa for truly everyone, just for being a person. So it always includes many things, and it's a very complicated technical question as well. We will talk more about that, I guess. So you said the term is proof of humanness. We call it proof of

personhood. Like other people in the ecosystem call it, call it proof of unique humanness. So proof that you're a one of one human on the planet, as opposed to how crypto works today, proof that you're a wallet. Proof that you've that this wallet exists in the world, which I could wake up

today and make 10,000 of them with a bot. You know, it costs a little bit of money, I guess. So that means how do you get proof of humanness, I guess is the next card. And did you look at multiple concepts to doing this to get to the one that you chose? Will you have others? Yeah. And so let's go into that because that's where this idea, I think, in people's mind,

starts to become like a James Bond villain concept as opposed to what I, obviously, your intent is, which is to just give everybody participation in a global crypto project. So let's talk about how you got to the certain biometric you're using. Right. So as a first, kind of just to set the stage, building our own hardware, and I think you brought this up. So we came to the conclusion that we need to build our own hardware that basically uses biometrics plus what is called zero knowledge proofs in crypto to issue that proof.

And we will talk more about it, what that actually means. But we obviously in the beginning, we did not want to build our own hardware. Because when you're a small startup, this sounds like a crazy endeavor. So this was not at all what we hoped the outcome would be. So basically we looked in many different ways to solve the problem. And while it starts with the fundamental ones like K.YC, it goes on to with like, Know your customer. Know your customer.

So you basically call someone, you show them your passport, and there's a database with your passport and basically an API that connects the database to whatever service you're using. Well, looking deeply into that, if you really want to make it inclusive for everyone, that just fundamentally doesn't work, because for many parts of the world, it just does not work. So we kind of excluded it quite quickly.

Things like email addresses, phone numbers, all of those things, they are not civil-resistant enough, so they would immediately break down. It's relatively easy to create multiple of them. And then there's another thing we look quite deeply into, which is called Web of Trust. So you basically try to analyze a network,

and you try to allocate different trust factors to everyone into the network, and you try to understand, like, who is actually a real person there versus a bot. Almost like a credit check, sort of. Yeah, I mean, like basically every social network is doing that in their back end in some way. Like Facebook has a big team working on things like that. There's some crypto projects working on this, but the TLDR is it does not yet work, at least.

There is no functional prototype on a large scale. It's really hard to bootstrap, which is, I think, the hardest problem. You kind of need trusted seats, what is it called? Like, you need people that you can trust. These are real people, and they can then start verifying each other. So, like, if I have your past part. Like page rank is how this started. Like the New York Times said, I'm sorry, Google said,

hey, the New York Times, NASA, Whitehouse.gov, whatever they'd link to. They're not going to link to something that is horrible. So page rank 10 was these top sites. Page rank 9 was who they linked to and so on and so on. They created an algorithm for that. So we get that. And the zero knowledge proof,

for people who don't know is the ability for me to convey some information to you, a counterparty on a transaction, let's say some piece of information without giving you that piece of information. In this case, it's I'm Jason Calacanis and she's Molly Wood and we did a transaction. She knows it's me. I know it's her. Or I have the amount of money in my account to cover this transaction without sending her my bank balance, right?

It's just a way to say the zero knowledge proof is you have zero knowledge of the underlying data, but you do know the answer to the question. Is that a good way to explain that? I think this is a brilliant way to explain it. I also really like the page rank analogy because that's very close to the original papers on this whole topic, so that's a really good one. At the end of the day, though, you were like,

none of that is good enough. None of this is good enough. And basically there are, but biometric is just a fundamental solution to that, right? Like if you just, you don't talk about specific problems, you just, okay, you take something that makes a person unique, like biologically, and you use, that as

which is why passports now are moving to that. When you go in and out of a country, they're checking your iris.

Am I correct? In some instances, like not every country, but I think kind of a really good example to that is certainly Athar. So in India,

if you want to be part of the social welfare system or actually, I think at this point, almost everything you want to do on a national level, you do that with your

Atar card. So basically, Indian government has realized at some point, okay, we have a big corruption problem. It's really hard for us to keep track of identities.

So they rolled out what is called AdHR and they used biometric methods to do that. But knows your knowledge proofs. So this is occurring in India today. They have a system called AdHAR, A-D-H-A-A-A-R. That's a 12-digit unique identifier that's obtained and you have a card. It's sort of like your social security card, but it's linked to a biometric, correct? Correct, correct, yeah. And they did this because people were trying to scam whatever, welfare.

or whatever system it was. Food banks, whatever. Got it. Biometrics are the solution. And then you're like, oh, crap, we're in the hardware game. Right. But actually, you're not fully there yet because you can think about whatever. Maybe we can use phones.

Maybe we can use like already existing hardware. But then there comes another really tough one, which is all the systems you use in your daily life. If it's face ID, if it's the fingerprint sensor on your door, all of those things, they're basically a one-to-one comparison. So basically your iPhone knows, okay, this is how Jason looks like. There's an embedding stored somewhere on that phone. Jason tries to lock in again. New embedding is created compared to this one previous one.

If that matches, you can use your phone and do whatever you want. For this whole proof of personhood or proof of unique humanists, however, you need to create a new embedding and compare it against everyone else before. So it's a one-to-end comparison. And those error rates basically explode. So if you were to use a phone, a face ID, or, similar technologies after 10 million people max, at least that's what we calculated,

you would reject everyone because you could not distinguish them anymore. There's just not enough information about everyone. That makes total sense. So it's fine to use face ID to open your phone. The chances of it being confused are one in millions. But if your goal is to put 7 billion people on a global cryptocurrency, that means if it was one in every 10 million,

you would have whatever that is, a hundred, every billion, you'd have thousands of mismatches, and that could be somebody's entire, that could be some catastrophic issue, correct? Yeah, actually, actually, it's actually much worse than that because it's not that you just continue to scale and you just, whatever, one in a 10 million or something, reject them, but rather, after some scale, you just have to reject everyone because you cannot distinguish them at all anymore. Ah, got it.

So it's even, you basically just hit a wall. Basically, there was the other, other big insight. So we realized, okay, we really have to build our own hardware, and the only biometric identity fire that really works on that scale is the iris. So the muscle of your eye has a lot of information in it, entropy is how you call it, mathematical information in it. It's non-invasive, and it's very kind of easy to image in that sense. So we realized, okay, that's the path to go down,

and you cannot even use normal iris scanners for that. So we really had to build our own lens. we had to build down an imaging system to get a resolution we need. So anyways, that was the first big problem we really have to solve is this proof of personal problem. And if you solve that and you have a unique token, you can really start rolling this out

on a really large scale and you can build many, many other things in the future. Listen, when you start scaling quickly, your company needs to be run professionally. And Odo is the software that helps you maintain control of your fast running business. Odo suite of business apps let you run your entire, company on one platform. This means you don't need to keep adding a bunch of different SaaS products.

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Your first app is free forever. And Odo is offering a $1,000 credit on your first implementation pack. Go to Odu.com slash twist for $1,000 off. That's ODO.com slash twist. So did the normal Irish scanners out there work or were they just not high fidelity enough? Is that the issue? they do not have high enough resolution. Because again, most of them are used in this other use case

where you try to look in to somewhere. It's trying to open your door, so it just needs to know that you're close enough to your door. Correct. Right. So you made this device. Tell us about the orb. We made this device.

It's a really cool device at this point. It's a 20 centimeter sphere. It has a custom lens in there to make that image of your eye that is high enough resolution to make that comparison work. it has a lot of security sensors in there as well because that's the other big problem you have to address. One is just checking uniqueness. The other big problem is people will attack the system

as much as they can because basically if you succeed with your attack, you can create multiple identities, you can get multiple of those tokens and you make money. So it has a lot of hardware security features and what we also call presentation attack security features in there. So basically there are neural networks on that device that check that you are a real person,

not a display or something. something else. And you've started to pilot these orbs. Where are you at with that? I had heard that, you know, like 100,000 people had their eyes scanned already. I don't know if that's true or not, but I saw some headlines go by. How many orbs did you make? And then how many people have you scanned?

Because I know the coin's not out yet, so you're kind of scanning people as a test or something. And then with the promise of future coins. Okay. So let's actually take a step back. I think it's important to understand, right? So there's a token and there's this platform, basically, proof of person that anyone else will be able to use, by the way. It's an open protocol.

It's not only for the World Coin token. So you build a Defy app, you can just use that WorldCoin login identity. So these are the two things that exist. And for this Proof of Personnel, we build this orb. But this orb is not operated by us as a project or a company, but rather from people all over the world that earn Roelcombe with every sign of they initiate. So it's a decentralized model. And that turns out to work really well.

It's, of course, really hard to deal with all the edge cases because there will be many of them. But that's the general idea. So like Facebook Connect, if a website wants to use LinkedIn logging, Google login, Facebook login, Twitter login, if I make a website or bank or whatever, I could use World Coins login. And I could do that for free or I have to pay a couple of Whirlcoin tokens or something to authenticate each person. person? How does that work? Yeah, correct. Like this whole monetization we have not figured out yet because it will really depend on how people end up using it in most instances. But that's generally correct. So the user, you receive basically two set of keys, one for your token and one for your identity,

your proof of personhood. And everyone else, as you say, as Facebook login can just integrate that in their app in their product. And then probably you're right, they will need to pay some brook coin to... How many world coins will there be? Did you say? It's going to be a trillion world coins. It will be, you know, 100 per person, 700 trillion or a thousand per person. How are you thinking about? There will be 10 billion tokens ever created. So it's a cap supply system.

10 billion. 10 billion. And you came to that number because that's in our lifetime, how many humans will be around or something? Basically, we realized in the beginning we need around 20% of the circulating supply to actually fund the whole operation and really get it off the ground. and then you have $8 billion left, which is as many people are there. Got it. So when will the tokens launch? And how will you price them initially?

Or does a market just pick? I mean the market will just price them, and we will launch them later this year. And this will be a big event to watch out for for sure. Are you selling those tokens in advance the 20% to fund the project? Are you selling those to venture capitalists like Indrisen Horowitz, etc., who like to buy these tokens? Yes, that's correct.

Have you sold them yet? I mean, it's actually equity rounds, right? So those investors, they buy equity in an operating company, and then later they can choose to buy tokens as well. Got it. With a warrant, a token warrant. Got it. What will you put those tokens value at for them at the start?

Because this has been a point of contention, like, oh, the VCs get to get first shot at the tokens. That's not fair. Crypto's supposed to be fair. I don't know why people expect crypto to be different than corporations, but what will you price them at if it's, If you have 10 billion tokens, you're going to sell 2 billion to fund the project, or you just charge a dollar each and raise $2 billion? 10 cents each and raise $200 million?

I mean, I cannot talk about the actual valuation right now, how we do that, but basically it's with a normal funding round, right? Investors look at technology, investors look at the data we have, and they try to think about the upside of this project. Got it. So I would guess, well, if it's a billion-dollar company out of the gate, 200 million, if it's people value it at 10 billion, it would be 2 billion. So between those two numbers, perhaps.

is where you wind up. And that will fund you going out and scanning all these people's irises. And then how many tokens will they get? They will get one token each is the idea. And they'll be like one Bitcoin essentially. And then we'll see what a Bitcoin is worth in the world. And you reserved one per person for everybody on the planet.

So two important things here. The first one is the users, they will not receive a one time token, basically, but rather you receive a continuous flow over multiple years. And we have not locked this in yet because we're still like, it really depends on those testing that we can talk about in a second, but we have not locked this number in yet. So user, user, you sign up for WorldCoin,

and you know how many you will receive over the coming years, and then basically every week you get a small part of that. Got it. So if this were it would be looked at like a Bitcoin, because you're making one for each person, essentially. If it was a Bitcoin, they would get a hundredth of a Bitcoin a year. Maybe it increases when they're retired because they would need more money, then could be one concept.

I don't know how it could work. Maybe you get 50 basis points for your first 20 years on the planet. Or maybe if you're in a country where you needed the money because of prenatal or like early stuff, maybe people in Africa who maybe need the money early for education get 10% a year for, or 5% a year for the first 20 years or life. Maybe in a developed economy, you get 50 basis points and then you get the bulk of it at the end where retirement is the issue because it's an aging population. All of this would be amazing ideas.

in general right now it's it's really thought as there's one rule that is the same for us everyone will have the same unlock schedule Jason hates that sure enough well no I mean he wants a VIP option

not it wasn't even VIP I was actually thinking more you know what a person in Europe needs might be distinctly different than you know what a person with a shorter lifespan right in Somalia needs like wherever the shortest lifespan is

giving them one you know one two percent giving them 2% a year where the lifespan might be under 50 in some places. Like, that's not good. They need early when they need to get education if they were going to spend it on such things.

Of course, but I think here it's actually really important to just state again that what WorldCoin does, it gives access to all of those people. All of those people end up with fundamentally an identity and a wallet. And everyone else can access it too. So even though that is the economics

of the Rolkine token, there might be other tokens that launch on their World Coin Protocol with different economics. makes to solve different problems. Oh. So it is really, really like the first step to get this kick started. So the world coins for identity, but then in a developing nation,

if they wanted to give UBI to a certain group of people, they could do like, where they call those ERC 20 tokens or something off of Ethereum. So there'll be some sort of concept like that. Somalia or Italy could have a different token. India could have a different token that. And you, even you could, you will be able to launch a JSON token and give that Jason token to every human on earth because you think this is how it should be. Fascinating. Listen, pretty much everybody knows someone who has invested in crypto at this point and lots of people have exposure to different tokens themselves.

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Has there been a controversy? Yeah. I couldn't expect that standing hundreds of thousands of people's irises and giving them free money would cost any kind of attention. Well, one question about the giving them free money is that the token hasn't launched yet, right? So the payment as such that people are receiving for having their irises scan. Talk to me a little bit about the decision to build out the iris scanning first and then compensate people with a token that does not yet exist. I mean, first and foremost, they actually will receive something relatively soon, but you really have to think about it in a way.

You have a company, you have a project that needs to build many, many things at the same time. Right? So one is the technology, it's a completely new hardware device that doesn't exist yet, that itself is extremely complicated. Then you have a growth mechanism that is distributed, so you have people all over the world that used it to basically verify other people, right? And there's many, many economic mechanisms around that to actually. actually make that work and make it click and how to set up the Q&A around this and all of those things.

So this itself is very complicated. And then of course you have you have an app, you have a protocol, all of those different layers of technology you have to make work at the same time. So basically what happened in the last few months is that we tested different parts of those system in different parts of the world for different reasons. And we just, we have been in a quick testing mindset. So the number of orbs has been quite low. It has been a total of around 30, sometimes 40 of early prototypes,

and even those devices, they change, right, because we went up in iterations of those devices. And then we just try to cover as many parts of the world as we can possibly do in the shortest amount of time and understand what works with different people, what is really, really hard concepts to get across and what is not, right? Like, how does the app need to look like? Or if you have, if you interface, I think the Tilder is in Norway,

things were quite easy, but if you talk to people that have never heard about crypto and you need to explain them what is a private and public key first, this has many applications on your product. So many, many things that have to be tested and have to be done right in a short amount of time

on a global scale, right? And that is basically what happened. So on the point you just raised, this was actually just one of those tests. For example, in Norway you have different tests where we tested app or things like that. And another important point is that we actually don't need that

biometric data, but rather, does the optics work in sun or in snow, like all of those different things, you just, you cannot simulate that. So of course, people felt like yeah, it's a test, but people felt like they were going to get coins, so maybe they just felt

like they should have gotten them now. I mean, you could just give everybody a dollar for doing it, like just hand them a dollar. That is what will happen basically in the coming I think three weeks. It's basically all of those people, they just received, some Ethereum and some other tokens

so whatever. In their wallet if they figure out how to log in. And they also will of course receive real coin later on and they even can claim brookane again when it actually launches. So they're the happy people. All right.

So let's talk about privacy. If they still have their wallet, to be fair. Several of them didn't report that they lost access to their wallets. Oh, but if they use their iris, can't they reset their wallet? Yeah, they can't just reset it. especially those people.

So that might be tech support issues, yeah. Yeah. Early stage tech support issues. So, okay, well, let's dive into the privacy issue. I give you this iris. You have my iris. It's encrypted somehow. What if you get hacked?

Like this is, I guess, people's great concern. And then. So there's the pragmatic one of hacking. And then there's another one, which is, what are you telling people in the terms of service you will allow to happen with my iris. If the federal government says, or if India's government or an authoritarian government,

China's government says, or they subpoena you and say, give us these 10 people's irises. We think they're terrorists. And they're actually journalists. Are you going to give it to them? Can you give it to them? We can't.

Explain technically why. Yeah. So let's understand the basics because that is really important to get right. So a few statements up front. One is Rollcoigne. is in fact, I think, the most privacy-preserving way to solve that problem to date.

Much more privacy-preserving than anything. You use your Facebook login, you Google login, all of those things. And I will explain in a second why. Second, we really do not want to do anything with that biometric data. In fact, we're incentivized to stay away from it as far as we can for obvious reasons, because that is not core of what we're doing. Core of what we're doing is we just want to solve that one problem and move on. Everything will be open-source.

So there is, we have clearly, incentives in that direction. So let me talk now about technology. Basically what happens is you show up in front of an orb. You want to be verified. You want to get your Vulcan account. The operator, which is the person using the orb, presses a button.

15 seconds later, you're basically verified. And you get your account with your proof of person and your Vulcone tokens in there. What happens on the backbone, though, is on that orb locally, there are many neural networks for many different reasons. many of them for fraud detection, but let's talk about

identity part first. So iris is imaged. A local hash is calculated out of that iris image. And what it implies in the first case is you cannot go back from that iris hash to the actual iris image. So that's a one-way function.

So it creates a number. Hatch is a fancy way of saying a long number based on my eye and my iris. And then the number is unique, but you can't reverse engineer the number into an eyeball or an image of an eyeball. Yeah, correct.

So, and then that is the only biometric data about you that is leaving the orb. It is sent to also a blockchain, so not a central database, but another blockchain where it's compared against all the other people that have signed up before that. And then what happens on the user side of things, on your phone, is that the user is proving with a zero knowledge proof plus that blockchain, that that user is included in that kind of, uniqueness blockchain, without revealing who the user actually is. So that means, let's talk about the worst case, even if I would have Molly's

Iris hash. I would have no idea what your actual account is on the blockchain side. And the same is true for any other service. So whatever, you log in in a defy app, or you whatever, even a conventional service, that service will never know who you actually are, just that you are unique to

that service. And that is a very, very powerful thing, I believe. Right? So it's in a... I have a follow-up question about that real quick related to like a lost wallet. Right. If it's all anonymized and all you have is this hash

and you're just in this mess that says you have signed up once before and you go back and you're like, I lost my wallet, scan me again so I can prove I'm here, isn't that not going to work? Because the idea is you can't be scanned more than twice, more than once, but also your identity is not connected to this hash. Right.

Wallet Reset does not work that way, but identity reset works that way. So you lose your wallet. So just like in crypto, you hear horror stories of people losing their wallet with five Bitcoin in it, that's on you. So you get this added security, but if you don't have your backup code or whatever to unlock the wallet, that's on you. So how is the wallet secured? Right.

So anybody who was scanned in these tests, who then, and you know, it seems like it in some cases it was happening in countries where and in places where people had very low familiarity if they lost their wallet. They can just sign up once more because we basically I mean, these have just been tests, right? There is no reason why we actually start those hashes. So during the test, they could just sign up again.

There's no coins in the wallet right now. But when the coins are on the wallet, the wallet would be secured by two factor, a password, whatever somebody chooses, like a standard email account. Right, you have the same, you have the same procedure as you have of any other Ethereum wallet, basically.

So if you lose it, it's on you. If there's stuff in it. So all the people who have been scanned so far are effectively, like, they're just training data, but they're sort of non-persons with respect to wanting to sign up again in the future? All of them will be able to sign up again once the actual main it launches. And that's important for many reasons, right? Like the product was not perfect in many different ways, like many of them maybe.

You didn't understand it because all of those different reasons, right? But what were they compensated with? They presumably were compensated with a token. So if they keep it or some fraction, then they get more, and that's fine. Then they get that token they get for this initial test signup, plus the one that actually happens when the main. So they get paid twice.

They get paid twice, and that's fine. Okay. Yeah. I mean, I think there's also going to be expectation of, well, if I did this, do I get a $40,000 Bitcoin? Like people's in people's minds, I think they're thinking, Molly, right. Well, I got one of these. I was one of the first people to sign up.

Now it's going to go on a tear and it's going to become worth, you know, what Ethereum's worth. The fact is. I mean, what if it did? And you just sort of happened to be, I mean, that is sort of interesting that just because you're in the test, then you can sign up twice. No one else on earth will be able to sign up twice except for these 500,000-ish people. And then if this token is eventually worth $10 million, they would be. Score.

Yeah. I got a score. Paid twice. Congrats on getting in early and being a beta tester. you know, you got an extra coin. I think it's cool. But I mean, the truth is, if there's 10 billion coins, the chances of these things,

you know, being worth more than a dollar each is going to be low. I mean, it would take the entire world, a large group of speculators would have to think this becomes the most important project in the world and they just run up the tokens. There's just a large supply of tokens is what I'm saying. I mean, it takes quite some years to get a full supply, right? because basically every user you sign up

gets some broken token, so it takes seven, 10 years depending on how fast we are. Even can take longer. Like, depending on how quickly we actually are with this onboarding, I think it would take seven years if we sign up a billion people

in less than two years after Maynup. I mean, Bitcoin's going to be 20 million, right? Or 21 million? It's like, it's capped at a certain number of Bitcoins. I think it's 20, or maybe it's 21. So here, you're talking about a much bigger pool, right? So the idea that they would become worth thousands of dollars.

I think is, you know, each is probably not what's going to happen here. But this could be a great identity system for people around the world to log in. I think it actually could be much more, right? Because there are many interesting things coming together here. Like one is, as you say, identity. But the other big thing is you have this onboarding happening with those orbs all of the world. And they actually lead to very different networks.

They lead to highly localized ones. where usually crypto networks are like some people in a country or something, sign up for service versus for WorldCoin, you will get to double-digit numbers of users in a certain location quite quickly. And if what we see in those tests and those numbers are very, very promising, we actually can get 2 billion people scale quite quickly. That's our big bet. What countries do you think will benefit from this the most

and which ones are you targeting to hit double-digit percentages first? Is it the emerging world? Is the modern world? Are you going to do this in Barcelona? Are you going to do it in... Internally, the simple idea is just make it as kind of equal distributed as we possibly can. And of course, this hits some walls because, like, in some places, it's harder regulatory-wise or even kind of just raw growth-wise.

But the general idea we have internally is make it accessible as much as we can, as quickly as we can. You're going to make 50,000 of these devices is... A year. A year. It will be much more. devices and are the devices like nodes where I can be like an entrepreneur. So if I got 10 of these devices, I'm getting paid every time I put somebody on. Is there some sort of, I don't want to say multi-level marketing, but is there compensation for an individual?

If Molly and I wanted to get one of these each and start scanning people at our farmer's market and explain the concept as evangelist, is that how you're going to distribute these? That's exactly right. So you receive those orbs. You send up people at a farmer's market. You explain what Rollcoigne is about and why it is acceptable. cutting and then those users receive real coin and you receive real coin for every sign of you did, right? How many war coins do I get for signing somebody out?

Or undecided? That actually depends on what the market price will be at the time because that those operators, they have an opportunity cost, right? It's like one hour signing people up versus working somewhere. It needs to make sense for them. So there is a- What's happening with the operators now? It sounds like there's been some concern about operators who haven't, who did get people,

in WorldCoin that doesn't exist yet or who are concerned about whether or when they're going to get paid? No, no, no. All of them got paid. That is very easy to answer. All of them got paid in stable coins right now, right? Because they obviously, they spent time of their life to do this and we just paid them as stable coins. Perfect. What do people, go ahead, Ma.

I mean, are you surprised at some of these stories showing blowback? I mean, like, obviously you have very well-thought-out technology-based answers to all these questions. and yet that's sort of not how the real world works. Like, were you surprised it? I mean, when you show up with a creepy orb and start scanning eyeballs and developing nations and people aren't quite sure why and they think they got paid in a thing that doesn't exist yet, like, did it surprise you that there was this controversy?

I think the part that surprised all of us is just how much attention that would be to like a very, very early phase of this whole thing, right? Because even all of those stories you just mentioned, these have been many months back. right so this was when literally the company was 10 people or like whatever maybe 15 people right in a small town in Erlangen and in Germany so it was very early in the project and of course many things do not work and I think the thing that's certainly surprised at this is how much attention even those like very very early tests got I think the thing that does not surprise us is that it's obviously a very new idea and it will take a while for people to understand all of the implications of this and I think it will change quite quickly once we actually launch domain it and start onboarding a lot of people

and people realize, okay, wow, this actually is on track to be the biggest project in crypto. Yeah, I mean, if you look at the chart that Sam Maltman shared back in October, October 21st, you have a pretty quick ramp in just six months to 100,000 people getting scanned.

And it was operators, I guess you called them operators, these folks who are taking the orbs out. And from Chile to Indonesia to Norway, France, Zimbabwe, Indonesia, Kenya, India, just different operators going out and getting students on board. And people want to do this. People want to be involved in crypto. And the operators have figured out a way to get people out there.

And it's obviously... And actually, those numbers got much better since then, by the way. Which is... Where are you at now? What's a total number? So... Because you have the first, this doesn't count the first quarter of this year. Yeah. So the thing we look at internally is how many signups does one orb do on average a week, right?

Because then you can do simple math. So right now one is around between 700 and 800 a week on average. The best ones do more than 2,000 a week. Wow. So even at 1,000 a week, that means an orb can do 50,000 a year. And you're doing 50,000 orbs. Right. and 50,000 will only be the first year.

So, like, basically, how the production ramp up works this year, end of this year, it will be 6,800. Next year, it will be, well, 50,000 plus 6,800. So we basically hit full production scale in November, mid-November this year. Maybe we're not 50,000 orbs doing 50, just 1,000 a week. Yeah, that's 700,000 a year. That means 10 years you have everybody on the planet. It should, it actually can go much quicker than that.

Yeah, no, I'm just, if you guys, got to 500, I mean, if you did 500,000 orbs, you would, yeah, be, you'd be able to get there a lot quicker, right? Well, basically, if we stay, all of this sounds crazy, I know that part. And let's see, certainly all kind of saturation effects will kick in and what's not. But just following the production schedule, multiplied by the numbers we measure right now, there's actually a path to onboard a billion people in less than two years, which would be significant. Is WorldCoin, it's a dot org, is it a for-profit company? Well, it will be a decentralized organization, right? So kind of this whole idea of a company will not exist, hopefully, kind of as soon as as even possible.

So it will be first all the IP will move to a foundation, and then it will be what people call a DAO. However, we really need to figure out what this really means in practice. but all of this technology will be open sourced and people will be able to build things with that. And instead of getting shares in a company that IPOs, everybody who participates will get tokens. So if you're the CEO or the founder or Sam

could have whatever a million tokens, if they become worth $10,000 each, you make $10 billion. If they become worth a dollar each, you made a million dollars. Or whatever you pay for it. So that is the really important and I think also really exciting and cool part is that all incentives of users, investors, founders, all of them are aligned around

this one single thing, which is the token. And that's also how we structure the whole organization, how we structure all of the fundraisers. Everyone is aligned around this token. And if the project works, the token will increase in value at some point. And it's utility token, not a security. Right.

But you're only taking accredited investors into the project so you don't have to deal with securities issues, I would assume, early on. That is, I mean, that is the main reason. I think there are many other reasons why you want to work with some of the best investors of the world. Exactly. Yeah. Right.

How will the, this is sort of a dumb question maybe, but if it's all going to be open sourced and then become a Dow, how will the investors and founders make money? Is it because you'll own most of, or a significant chunk of the tokens? Right. You own those tokens. more and more people will start using this whole protocol

and so the demand for the token will increase the price will need to increase as a consequence and that's how us and the users earlier you had 20% of the tokens would be going to fund the project and fund the project means the investors and the founders and the employees. 10% goes to the foundation, 10% goes to investors

pretty much. And the founders would be part of the investor pool I would assume. Founders are part of the foundation pool. So like, Oh, the foundation pool, got it. Fundation pool, right. Got it. Awesome.

This is the brave new world. Instead of stock options, you get tokens. And if they appreciate it, they appreciate it. If they don't. That is a new thing. And then do they have, do the people who are the insiders of the tokens, do they have to hold them for a certain period of time? Do they have a lockup?

Because, yeah, and then how does that work? They can sell them over some period of time, 10% a year. How do you mitigate that? Because we have securities law. And so with this new token, economy that's occurring in parallel to securities law, we have, hey, you can sell in secondary as a private company, no problem, but when you become a public company, you have to file, you have to sell them over some period of time, there's some regulations. What is the best practice

in a private token sale? Basically, you just have a quite aggressive and long, full lockup, and then a linear unlock schedule over two years. Got it. So you're locked up for some number of years, five years, ten years, and then you can sell? No, it's less than that. I, Yeah, I don't want to comment on. Yeah, well, what's the best practice in the industry? Lock up for a year or two and then you could sell. Yeah, log up for a year or two and then linear unlock over two years. So you don't have like those supply shocks in the market.

Got it. Yeah, I mean, that's, and people have been pretty clear. That's what happened with Solana and other breakout projects was that the insiders who bought these tokens had to sell them over time. If not, somebody clears the whole position and early position, it could tank the whole thing. Right. Right. Which is what happens with lockups for employees and early investors. there's anything. Well, this is fascinating, continued success with it. When will people in America

be scanning their irises? When would people see this at their farmer's market or university? As soon as Jason gets the orb. Yeah. I'm not going out and orbing people. It's a little too sci-fi for me, but I would certainly create a wallet. I don't have a problem with it. It seems like, yeah, I mean, I think the government and visa have a lot more information on me. Apple has a lot more information on me with my phone and where I am and Chrome with my search history and like, it feels like other, my ISP. It feels like a lot of people have a lot more information on me. Although a biometric does feel scary.

In this case, it's because it's hashed, I think it's less of an issue. So when do people in America start getting scanned? Well, America is actually an interesting one because as you probably know with crypto, there's a lot of regulatory uncertainty. I think it's a good way to frame it. So you really do not know as a project. as a founder, what are the exact rules I need to follow to launch in that country. So basically we will make the identity piece accessible quite soon.

Like there will be, again, bett us for developers really, really soon. But then when the free tokens, like even giving free tokens in America, lawyers are going to be like, uh, not clear, not clear. Let's see how that plays out. right, yeah. Well, I mean, this is, I mean, I think something, I don't know how you feel about as a crypto person, but America really needs to catch up here and make the rules of the road super clear.

Because you have all these American investors who want to pile in. And then we, we hear in the, you know, people who are investing in private company world have to play by all these crazy rules. I don't know what I want to say crazy, but we have a regulatory framework that is intense and detail and expensive. And then crypto has a very fluid one. And by all accounts, it's innovation and money's moving very quickly in the crypto space. And very slowly in the startup private space, entrepreneurs are clearly voting with their time to do this more fluid one and do it outside the United States.

Right. No, I think you're exactly right. Many of the best, the world's best investors are here. Many of the smartest kind of people, developers are here. So it would be, I think the US really needs to kind of accelerate this whole thinking framework around crypto and Web3 and make it much more easy for projects and then they have to. The complication, of course, is, well, then what do you do with existing securities law? And the framework I liked was, or the framework I came up with, so I like it by default, is maybe just scaling the regulation to the size of the project. So if you're doing, you know, a $10 million crypto project, you know, you can do $10 million, file one piece of paperwork as an experimental project and don't take more than $1,000 from

a thousand people, whatever the math is, you know. You can take up to $1,000 from 10,000 people. Okay, now you want to do a $100 million project. You got to file like, you know, 10 pages of paperwork. And you have to know anybody who does over $10,000, but anybody under $10,000, you don't have to KYC them or whatever. And it's a little more fluid. right? You come up with some system that is, you know, matches the potential downside or fraud or risk profile.

I mean, this is the part I really do not know how to solve the best. I'm a physicist, not a lawyer. So I don't know that part really well. Well, okay. Yeah. The lawyers always get paid is the one rule I found. And the more complicated, the more they get paid. So, right. More complexity seems to be what will happen. Right. Well, appreciate you coming on. Anything else, Molly, have that you wanted to touch? Well, I guess on that regulation question, is that part of the reason that the tests and the beta period rolled out? It's certainly yes in Norway, but also in what might be considered developed countries where penetration, like crypto penetration and knowledge is pretty low. Like there is still that sort of outstanding question of why start in these countries where people may not have known what they were signing up for?

I mean, to be honest, this was actually like this one part I really did not like appreciate about all of those. reports is because the simple answer is just no. Like we launched quite equally across like, we have been in Germany, we have been in France, in Norway, in Spain, right? Like, but not the US. That's, that's right. And also Indonesia and Kenya, right?

Because the whole idea is to make it accessible all over the world. And then you also, you should not shy away from Indonesia and just start in Norway way. it's easy. So you really have to also start where it's hard. Why do you have to start where it's hard? If all you're doing is like gathering hashes to train a network to recognize hashes. Oh, because you really need to understand how you build your products. So also people that do not live in Norway, but live somewhere else, actually understand it.

Actually, no, what's what is going on? Got it. You want to solve for hard, not just the layouts, right? Because you want it to be a world coin, not a. That's exactly right. Yeah. EU coin or a dictator coin. Right. If you would only launch in whatever, Europe, you could do KYC. Everyone here has passports.

This is the easy part. But if you really want to make it accessible for everyone, you have to do new things and you have to really do things that are much harder. This is certainly the most interesting crypto project, I think. It's definitely on my list of the top five most intriguing. Thank you so much, Jason. Yeah. We wish you continued success with it. We're going to be watching. It's really fascinating. and I'm interested to see where you take it. So continue success. And thank you for coming on the project. Hey, everyone.

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