By Ashlee Vance, Bloomberg
Compiled by: Luffy, Foresight News
Nuremberg, Germany, is a picturesque city with a low-tech downtown. It has a castle and a cathedral, signs advertising German sausages, and rows of ice cream shops that tempt tourists. But on a weekday in mid-May, the city hosted a serious geek event.
Visitors to Josephs, a futuristic retail store off Main Street, came across a mysterious metal sphere the size of a cantaloupe. The Orb, a shiny chrome object, sat on a black pole that jutted out from a large rectangular wooden base, near a window at the edge of Josephs' main exhibition hall. Alex Blania, one of the creators of the strange object, was nearby. He sat in a chair at one end of the room as an interviewer peppered him with questions in front of dozens of German computer science and engineering students who were celebrating the success of local boy Blania.
Workers observing the Orb. Source: Bloomberg Businessweek
Europe has had some big tech success stories but has long lagged behind the U.S. in the number and quality of companies and entrepreneurial ideas. That’s why people are cheering for Blania. He’s CEO of Tools for Humanity Corp., which uses Orb to verify the identity of every person on the planet and is part of a cryptocurrency system called Worldcoin. Tools for Humanity is based in San Francisco and Erlangen, Germany. The company’s founder is Sam Altman, who is the main financial backer, along with Tiger Global Management, Fifty Years, Khosla Ventures, Andreessen Horowitz and dozens of other investors, who have donated more than $250 million to achieve, as the company’s website puts it, “a more just economic system.”
To achieve this not-so-simple goal, Tools for Humanity wants to create a global identity system for humans. Their idea is that artificial intelligence is developing so fast that we will soon need a way to distinguish humans from machines. In other words, in order to prevent the adverse effects of deep fakes, scams, etc. brought by super artificial intelligence from flooding the Internet, we must answer an existing question: robot or not? This is where Orb comes in. It takes people's iris images under the supervision of human employees and grants them a unique World ID, binding a real person to a machine-generated string. You can then use your World ID to log in to Shopify or Reddit or Discord servers, and everyone can be safer because they know they are facing a real, flesh-and-blood person, not an artificial intelligence.
However, this is just the first step in a very futuristic vision. Those who obtain a World ID can also receive a reward in World coin cryptocurrency WLD. Tools for Humanity, which manages World coin, Orb, World ID and all other products, believes that cryptocurrency is essential to solving the income and resource allocation problems that artificial intelligence may bring. Therefore, the company hopes to create a financial network to do things like regularly distribute grants to people in need. In this case, the World coin network will act as a non-governmentally operated financial backstop for people around the world.
Blania and Altman formally presented their World coin master plan a year ago and have received mixed feedback since then. On the one hand, they have convinced more than 6 million people to register for World ID using Orb, and the registration rate has been surging this year. The total value of the cryptocurrency WLD exceeds $550 million. At a factory in Germany, Orb is being mass-produced and will soon be distributed around the world.
On the other hand, Worldcoin’s plans strike many as absurd and dystopian, an Orwellian privacy nightmare. Many countries have already called off iris collection, with governments concerned that people standing in front of Orb don’t really understand what they’re signing, and that collecting biometric data is “unnecessary and excessive,” as Hong Kong regulators said in May.
Blania, 30, is well aware of the criticism and admits that Worldcoin’s plans got off to a rocky start. Bloomberg first reported the company’s moves in 2021, and it took months before the founders were ready to make their intentions known. “We got hit very early on,” Blania told Josephs students.
Over the past year, however, Blania and his team have tried to solve the problems facing Worldcoin one by one. They’ve improved Orb’s security technology and the way the company handles customer data. They’ve met with regulators again and again, and have successfully convinced countries like South Korea and Kenya to lift their bans on Orb. Yes, the Worldcoin project sounds crazy, and even Blania himself thinks it has only a 5% chance of success. Still, he insisted in an interview with Bloomberg Businessweek that governments and the public have not caught up with the coming technological changes, nor have they created the tools needed to deal with the impact of artificial intelligence when it does arrive. It’s better to have Orb and fail than never have Orb at all.
“That’s actually the cool thing about Silicon Valley,” Blania told the students. “You can raise $250 million with a crazy idea, and if it works, everything changes. And if it doesn’t work, at least it was worth a try.”
Blania is 5-foot-6 and slight, with an easygoing charm even as he talks about protocols, blockchains, and biometric systems. He knows all the high-sounding tech industry jargon, but approaches Worldcoin and the problems it’s trying to solve with the rigor of a typical German engineer.
Alex Blania
Sitting in a café by the Pegnitz River, Blania tells his story. He grew up in a small rural town, about 45 minutes by car from Nuremberg. His father had an unusual consulting job, serving as interim CEO at several companies in crisis. His mother worked in accounting and finance. As a child, Blania was interested in mechanics, electrical engineering, and computer programming. He worked on various projects at home: modifying an Austin Mini, building an automatic beetle counter to monitor the health of forests, and building a vertical farm.
During his university years, Blania developed a keen interest in physics and artificial intelligence. He studied for a master's degree in physics at the University of Erlangen-Nuremberg and later at Caltech, and seemed destined to become a theoretical physicist.
However, the stories and legends of Silicon Valley attracted Blania. He traveled to San Francisco from Europe from time to time to find a way into the startup circle. While studying at Caltech, Blania drove a beat-up Toyota Corolla to San Francisco every weekend to try to meet people in the startup community. These efforts eventually paid off. Before he knew it, Blania had built enough connections that he one day received a random email from Max Novendstern, a young Harvard graduate known for his novel ideas in financial technology.
It was October 2019, and Novendstern said he and Altman had been working on an idea for a cryptocurrency project and wanted to know if Blania would be willing to interview. “I didn’t know anything about cryptocurrency,” Blania said. “There was a two-page vision statement in the email from Sam and Max, and I couldn’t really understand any of it.”
Still, Blania admired Altman. He was the former president of startup incubator Y Combinator and was the new CEO of OpenAI. Blania took two weeks off from school to read as many books as he could about things like cryptocurrency and universal basic income. Altman was personally obsessed with the concept of universal basic income, which represents a network of unconditional, regular payments from governments to their citizens. Blania was also fascinated by the concept, and he began to believe that if cryptocurrency truly became mainstream (rather than just financial speculation and scams), it had the potential to provide people with more economic freedom and financial possibilities. "Another idea is that artificial intelligence will become popular, society will be reorganized, and we need infrastructure to ensure that they can benefit humanity," Blania said.
OpenAI released ChatGPT three years later, and the public hadn’t started discussing the impact of AI on a daily basis. However, Altman and Novendstern were already thinking deeply about the problem, and now Blania is too. Altman, who declined to be interviewed, has talked to Blania about the future many times, and how if AI is left unchecked, it could take over the internet and bring economic turmoil that can only be corrected by allocating money and computing resources to people around the world through a flexible financial system. Blania thought the Worldcoin plan was “outrageous” and “ambitious,” and he liked this combination so much that he dropped out of school to join the venture as a co-founder.
It seemed natural that the Worldcoin project would have been conducted entirely in San Francisco. However, the global pandemic steered the effort in a different direction.
In March 2020, Blania boarded a plane to Germany. He had planned to visit some old classmates to learn how to design a state-of-the-art biometric system. Just before the plane took off, President Trump announced that the United States would close its borders. Blania expected the restrictions to last only a month or two. As a result, Blania was left in Germany, and Worldcoin’s second headquarters was eventually located in the university town of Erlangen, where the team Blania assembled built the first Orb.
The Orb assembly plant in Jena, Germany. Source: Bloomberg Businessweek
Early Worldcoin staff spent months analyzing existing biometric systems and poring over technical documents, hoping to find the best way to register billions of people on a single identity platform. They quickly realized that some of the most common systems, such as facial recognition and fingerprints, did not meet Worldcoin’s technical requirements.
Its biometric scanners first need to confirm that it’s dealing with a real person. That means the scanner needs to check the creature’s heat signature, among other things. It also has to immediately confirm that the person being scanned is not the same person that has been previously verified. The only system that seems to fit Worldcoin’s goals is India’s National Biometric Database, which relies on iris scans as a form of identity verification.
Optical filters. Source: Bloomberg Businessweek
One of the downsides of popular biometric methods in smartphones is that, in a Mission: Impossible-style scenario, a human (or a superintelligent robot) could fool them by wearing a mask or copying a fingerprint. The iris, however, is much harder to mimic because it carries so much variation, something biometrics experts call entropy. The iris has diamond-shaped holes of varying sizes, called crypts, and lines that form rings around the outer edges of the iris, called sulci. Each person's iris also has a wide gradient of pigment, giving the eye a marbled look. Even identical twins have different patterns.
The Worldcoin team’s task is to take iris scanning technology from India and elsewhere and supplement it with a host of other techniques to prove that a real person is present when the scan is performed. The engineers must do all this while making the scan as fast and simple as possible.
Worldcoin could have designed a simple box to house all this hardware, which would have been more production-friendly. But the founding team felt it had to make a splash. They chose a shiny metal sphere that looked like a giant robot eyeball.
The first Orb designs were made in humble surroundings. Blania recruited Fabian Bodensteiner, a former classmate from the University of Erlangen-Nuremberg. After graduation, Bodensteiner founded a hardware engineering consultancy and reserved a space in his office in Erlangen for the initial designs. The small space was crammed with circuit boards, cameras, and beds, where Bodensteiner, Blania, and others slept next to the hardware when they needed to rest.
Bodensteiner. Source: Bloomberg Businessweek
By the summer of 2021, Blania and his team had built a prototype of the Orb and were testing it in the wild. Not only was the Orb spherical and eye-catching, but when people signed up, it would spit out a physical metal coin from a slot on the front of the device. (This “feature” was intended to make cryptocurrency payments feel more real, a gimmick that Worldcoin later abandoned.) Blania and his team decided to head to Erlangen’s city square to introduce people to the product and try to get them to sign up on the spot.
The event did not go smoothly. The device’s speaker emitted beeps and beeps, instructing people to move closer or further away from the Orb to improve the camera’s focus. Off to the side, a Worldcoin engineer had to wirelessly connect to the product and debug the software in real time to complete the registration process. “We were standing there like idiots,” said Chris Brendel, one of the early members of the Worldcoin team and now the head of AI and biometrics. “It was terrible.”
Three years later, the Orb is now a technological marvel. At its heart are several interconnected circuit boards that perform various tasks. One board is used to check if anyone is trying to hack the Orb or manipulate it maliciously. Another board contains an Nvidia Corp. chip that runs computer vision and other AI software through a series of neural networks on the device. Other sensors track the Orb's location via GPS and send and receive data to and from the product via wireless communications. There's also an aluminum plate wedged between all the electronics to dissipate heat.
Beyond that, the optics needed to be more discreet and customizable. Worldcoin wanted to allow people to walk up to the Orb and scan their irises without detailed positioning instructions or time-consuming adjustments. This proved to be a difficult task. During testing, the company found that some people would press their faces against the Orb, while others would stand at a distance and sway their bodies.
Orb main circuit board. Source: Bloomberg Businessweek
To solve this problem, Orb uses two lenses. A wide-angle lens assesses the scene and uses a neural network to predict the likely position of a person's eyes. A telephoto lens moves with a gimbal to get close-ups of people. Worldcoin worked with a Swiss company to create a lens that uses a novel focusing technology. The lens consists of a membrane and a box of oil that can be shaped by an electric current. The oil can be pushed into the membrane to change the focus of the lens in milliseconds and magnify a person's iris without adding any bulky mechanical parts. "It's much more compact than trying to do it with the traditional approach that requires multiple lenses," says Bodensteiner, who led most of the engineering work on Orb.
To further ensure the integrity of the authentication system, Orb also has a body heat sensor and two sensors that scan depth and infrared wavelengths, which can detect if a person is holding up a screen with an iris image instead of showing a live eyeball.
Orb prepares for lens calibration testing. Source: Bloomberg Businessweek
The manufacturer, Jabil Inc., assembles the Orb in Jena, a town with a long history of optical technology about two and a half hours north of Nuremberg. Carl Zeiss opened his first optical laboratory there in 1846, and Jena is still home to many optical industry veterans, some of whom still make Orbs by hand. The entire process requires about a dozen people working at several different stations to put the electronics together and test them before the final step of putting on the chrome housing and sealing everything. Each Orb costs about $1,500 to make, and unlike typical consumer electronic devices, there is no need to produce millions of Orbs or put them in fancy packaging. A second production line at the Jabil factory just opened that should be able to produce the tens of thousands of Orbs that Blania believes will be needed to register a billion people. Worldcoin has made 3,300 Orbs so far.
Irony and sci-fi doom hang over Worldcoin at every turn. With OpenAI, Altman seeks to create an AI system powerful enough to make something like Worldcoin a necessity. He frames the problem as he goes along, then pitches people on the solution. More importantly, one can only imagine how a super AI would feel about being relegated to “non-human” status on the internet, and whether it would be hostile toward Altman and Blania, and perhaps even others.
Indeed, many people are skeptical of Worldcoin. Last year, the Electronic Privacy Information Center, a Washington think tank, clearly described two major concerns surrounding Worldcoin in a statement. "Worldcoin's approach creates serious privacy risks by bribing the poorest and most vulnerable people to hand over immutable biometrics, such as iris scans and facial recognition images, in exchange for small payments," wrote Jake Wiener, the group's legal counsel. "Large-scale biometric collection like Worldcoin threatens people's privacy on a large scale."
World ID registration. Source: Bloomberg Businessweek
Regulators now agree with some of these views. When Worldcoin first launched, people in more than 20 countries could visit Orb and sign up. Now, the list of countries listed on the Worldcoin website has shrunk to 12, and many governments in Europe, Asia, and Africa have suspended registration, citing the risk of losing or misusing identities. In the United States, if people want to join the Worldcoin identity system but not receive any WLD cryptocurrency, they can scan their iris at a handful of technologically advanced retail stores. Given the regulatory uncertainty that still surrounds cryptocurrencies, Worldcoin still has a lot of work to do before it can truly become a mainstream service. Despite steady growth in Orb registrations over the past year, Worldcoin is still far behind its original goals.
Of course, people have been trading privacy for convenience for decades. Alphabet, Apple, and Amazon store reams of personal data on billions of people that are arguably more private and valuable than a random string of characters generated by a photo of an iris. Many people with smartphones already hand over their location, calendar, and email to the tech giant of their choice. A startup proposing to become a global broker of identity and finance is new, even if it’s not so different from the tech companies that have come before it.
On a recent weekday morning, a line of about 15 people formed in front of the Worldcoin registration point in Mexico City. The crowd, mostly young and middle-aged men, was in a historic part of the city, surrounded by bridal and formal dress shops, with quinceañera dresses displayed in the windows. The Worldcoin registration center is run by contractors, with white folding chairs in the waiting area and makeshift signs hanging on ropes advertising the service. A security guard and two local staff members, one wearing a Worldcoin hoodie and the other in a black T-shirt, worked the center, guiding people through the registration process.
Juan Juarez, 45, signed up a few weeks ago and brought his 18-year-old son, Santiago, to get scanned. Juarez has been thinking about the money he's made from Worldcoin's appreciation since he first signed up, and hopes to use the gains to invest in other cryptocurrencies. He also likes the technology's grand purpose. "I think it's a good thing because in the future it will help us see who is a real person and who is not," Juarez said. His son said he hopes to use the money he makes from Worldcoin to pay for his electronics studies.
In Singapore, signing up for Worldcoin has become something of a tourist attraction. Recently, at the Orb Center inside Centennial Tower, visitors from Bangladesh, China and India had their irises scanned in exchange for some cryptocurrency. About a dozen people, including an electrician, several students and others working in the tech industry, lined up to complete the two-minute registration process. Mitesh Kha, a 33-year-old Indian, was delighted by the quick payment. "It's free money," he said. "I'm happy to scan my iris and let Worldcoin get the data. According to the app, I can delete my data at any time if I want."
If Blania has any ill intentions, he’s hiding them pretty well. The Orb itself doesn’t store any personal data. Iris scans are immediately deleted from the Orb and never uploaded to the internet. The only data sent, he says, is an encrypted string of ones and zeros representing the iris. (People can, however, choose to share their data with Worldcoin for training purposes, in which case the encrypted information is sent over the internet.) Worldcoin used to manage this data centrally, but is now building relationships with universities and other more neutral parties to split up the string and store it in different data centers. A hacker would need to assemble all the parts and somehow crack its encryption to have a chance of stealing a person’s code.
Beyond that, nearly everything to do with Worldcoin is open source. Anyone can visit GitHub to download detailed schematics for the Orb hardware or examine the Worldcoin protocol. The organization will begin making Orbs in different colors and shapes this year to make them more user-friendly. The near-term hope for Worldcoin is that other organizations will choose to make their own Orbs and build services on top of the Worldcoin protocol. Blania and Altman’s ultimate goal is to have Worldcoin independent of them and run by a community of project supporters. They hope to see the service become a public good.
Iris scanning. Source: Bloomberg Businessweek
Some critics have praised Worldcoin’s efforts and intentions, but also called it fundamentally flawed in terms of security. “Worldcoin is doing something really important, it’s bringing the value of identity and biometrics to the forefront,” said Charles Herder, a cybersecurity expert and co-founder of identity startup Badge Inc. But Worldcoin also had vulnerabilities that could be exploited by hackers (later fixed). And according to Herder’s analysis of Worldcoin’s public documents, the service had flaws in the way it stored data. Plus, it’s still a company. “You have to trust that their business model isn’t going to change 30 years from now because they’re bankrupt,” he said. “They have incentives to monetize this data, and you have to trust that those incentives don’t trump their commitment to you.”
Altman initially backed Tools for Humanity out of his own pocket and later helped it raise money. Investors own 13.5% of Worldcoin tokens, the 113th-largest cryptocurrency by market cap. The rest is distributed to buyers or people who scan their irises.
To realize Blania and Altman’s ambitions and head off the crisis that AI could bring, they need the value of Worldcoin to soar. They believe that as AI begins to transform the global economy and endanger jobs, governments won’t act quickly enough. In theory, people who need money will be able to rely on the income provided by Worldcoin. “We need to try new things that don’t exist right now,” Blania said.
Speaking to students at Joseph’s University, Blania downplayed the response from regulators over the past year. He’s been explaining the technology to governments, and he hopes they’ll catch up in time. He said the sudden rise of AI technology over the past year has begun to alert governments to the threat. Worldcoin is an early warning system, not the evil identity hoarder it’s been misled to believe. “I think our predictions four years ago were correct, and the timeline matches up really well with where we are now,” Blania said. “Now it’s about execution and explaining to people; rest assured, we’re not going to steal your soul.”
