The inception of Worldcoin has sparked a vigorous debate amongst European regulators, technology experts, and scholars alike. The company, co-founded by former Y Combinator president Sam Altman, aims to distribute a new cryptocurrency globally, through a novel approach which involves the use of an orb-shaped device to scan people’s irises in exchange for free Worldcoin tokens. But while Worldcoin might well represent a promising, novel addition to the evolving landscape of digital currencies, it's also undeniably riddled with ethical, legal and privacy concerns.
One of the most significant concerns relates to privacy and data protection. Under Altman's ambitious plan, Worldcoin's orb device scans the users’ irises to create a unique, non-reproducible identifier, which is then employed to verify that each participant receives only their fair share of Worldcoins. However, biometric data, which are classified as a special category under the General Data Protection Regulation (GDPR), raise serious privacy implications. Article 9 of the GDPR expressly prohibits the processing of such data, unless one of the exceptions under Article 9(2) applies. A breach of this provision can lead to hefty administrative fines, which, according to Article 83(5)(a) GDPR, can amount to up to EUR 20 million, or in the case of an undertaking, up to 4 % of the total worldwide annual turnover of the preceding financial year, whichever is higher.
The UK's Information Commissioner's Office (ICO), the French CNIL, and the Bavarian State Office for Data Protection Supervision are among the European data protection authorities that have already voiced concerns about Worldcoin. As one spokesperson for the ICO aptly put it, organisations must conduct a Data Protection Impact Assessment (DPIA) before commencing any processing that is likely to result in high risk, such as processing special category biometric data.
Likewise, representatives from the Bavarian State Office for Data Protection Supervision, and the French watchdog CNIL, have raised concerns about Worldcoin’s biometric data collection methods[^4^]. These authorities are questioning the legality of the collection and the conditions for storing the biometric data.
Beyond regulatory bodies, the academic community has also chimed in on the debate. Professor Sandra Wachter, an associate professor and senior research fellow in Law and Ethics of AI at the Oxford Internet Institute, has questioned Worldcoin's approach, saying: "Even though the goal of global financial inclusion is laudable, using biometric data to achieve this is extremely risky. This could set a dangerous precedent for data rights and user privacy. Given the potential irreversible damage, the processing of biometric data should be limited as far as possible
Many industry observers are making their comments public in the same vein, Trent Rhode, Editor of Technopedia wrote; “ Is Sam Altman’s Worldcoin a Dystopian Attempt to Steal Identities?”
In his editorial piece he attempts to define a balanced perspective of innovation and raises critical questions about data privacy, valuation, and potential exploitation.
Mr. Rhodes writes, “Digital identity leveraged by biometric data is a complex and important issue. In the case of Worldcoin, It raises eyebrows as people seem eager to exchange biometric data for 25 WLD, worth $2.21 each as of writing. The project is essentially trading biometric data, a sensitive form of personal information, for a handful of coins“
An excellent piece by IEEE Spectrum explores how Worldcoin realised that World ID could be a bigger deal than the cryptocurrency, and compares registrants’ expectations for the currency to signs that even before launch it is becoming a DAO (decentralised autonomous organisation) token, to give those registered a stake in the blockchain-based venture and a say in how it is managed. The IEEE piece argues there is no mention of this at enrollment campaigns it has observed
“Offering economic benefits, no matter how small, is certainly encouraging people to join the Worldcoin bandwagon, however. The potent mix of cryptocurrency’s charm and the universal digital ID’s democratisation potential attracts many, especially those without access to standard banking.” Published by Technopedia
However, Worldcoin is not without its defenders. Tools for Humanity, a company that builds privacy-enhancing technologies, has argued that under GDPR, Worldcoin's project relies on the users’ consent for creating the proof of personhood and for opting into data custody[^8^]. This viewpoint brings to the fore the controversial nature of consent as a legal basis for data processing, especially in relation to special categories of personal data.
Despite the escalating controversy, it is important to remember that Worldcoin and the broader landscape of cryptocurrencies represent a significant step forward in the evolution of the global financial system. They have the potential to offer financial inclusion for millions who are currently unbanked, and present new opportunities for innovation and growth.
However, it is equally critical to ensure that this progress does not come at the expense of privacy rights and ethical standards. Technology and finance must not be permitted to outrun society's ability to control their implications and impacts. As we navigate the intricacies of this new frontier, it is incumbent on regulators, technology companies, and society to actively engage in the conversation and shape the rules of the game.
While the jury is still out on the ultimate impact of Worldcoin, the real world appears deeply divided on Mr. Altman's vision of democratising a global currency. Worldcoin stands as a poignant testament to the legal, ethical, and practical challenges that surface when innovative technologies, propelled by influential leaders, craft narratives that allure the masses with shimmering prospects. The trade-off—surrendering personal and valuable information in exchange for a seat at the table of social recognition or the allure of economic gain—seems to parallel the unsettling tones of a dystopian Kubrick film, hauntingly coming to life in 2023.
The relinquishment of personal data, once it's no longer "yours to own," teeters on the brink of potential mismanagement and unforeseen ramifications. This scenario amplifies the pressing necessity for sustained dialogue among global figures and governmental bodies. Only through these conversations can we ensure that the advantages of such technological breakthroughs are thoroughly vetted and harnessed, all while safeguarding the sacrosanctity of individual privacy rights.
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