Everything you need to know about Worldcoin
Welcome back. So here’s a fun fact: Barbie and Oppenheimer have been such blockbusters that their success is impacting the economy. According to Bank of America, cardholders spent 13.2% more on entertainment the week Barbenheimer hit theaters than they did the same week last year. And to the surprise of absolutely no one? A Barbenheimer ERC-20 token already exists.
Today: Unpacking Worldcoin, Bitcoin’s week in headlines, and Japan’s latest embrace of web3.
What in the Worldcoin…?
Forget Barbenheimer, crypto had its own prominent launch in July. Worldcoin finally went live last week—to plenty of hype, confusion, and controversy.
In a nutshell: Worldcoin, which has been in the works for over three years, is the highly anticipated brainchild of OpenAI CEO Sam Altman and Tools for Humanity CEO Alex Blania. Worldcoin’s main products are a human identity verification system plus the WLD token and a crypto wallet.
What’s the “why” here? Worldcoin believes that advances in AI will make it increasingly difficult to distinguish between humans and machines on the internet. It also believes that AI will create an abundance of wealth for humanity but kill many jobs by doing so.
The project intends to tackle these problems by…
Creating a sort of digital passport with “proof of personhood.” Worldcoin scans users’ irises (via dystopian-looking orbs that are touring the world) to create personal identification codes that are saved on a decentralized blockchain as World IDs.
Distributing a universal basic income (UBI) to holders of a World ID. Users get access to WLD, an ERC-20 token in which the UBI is supposed to be paid out.
But Worldcoin is controversial. The wave of criticism can be divided into two camps:
Issues with Worldcoin’s construction. Ethereum cofounder Vitalik Buterin suggested that putting biometric proof of personhood tech into the hands of a centralized company comes with inherent privacy and security concerns.
Issues with the WLD token. WLD launched with a staggering market cap exceeding $22 billion, but its tokenomics pose a red flag for many. The project reportedly raised north of $500 million from VCs and allocated 25% of WLD’s supply to insiders, raising questions about the incentive structure behind the project.
A global database of human IDs issued after an eye scan, paid for with useless Worldcoin token, connected with all financial transaction data of each individual managed by a centralized non-profit collecting sensitive data for KYC/AML.
WHAT COULD GO WRONG?
— Anita ⚡🏳️🌈 Bitcoin for Fairness (@AnitaPosch)
Jul 24, 2023
Zoom out: Worldcoin is a complicated project, but one thing is clear—realizing its audacious vision won’t be a walk in the park. From navigating regulatory landscapes and ethical questions to engineering robust tokenomics, Worldcoin faces an uphill battle.
Hodlers Thrive, Miners Strive
Bitcoin found itself in the headlines several times last week in both good news (for BTC hodlers) and bad (for BTC miners).
The good news first: New data from Glassnode shows that long-term Bitcoin hodlers (addresses that hold coins for at least 155 days) now control a record 75% of BTC’s circulating supply.
The balance held in these wallets increased by 62,882 BTC to a record 14.52 million BTC this month, surpassing the previous peak registered in May.
The numbers suggest that “HODLing is the preferred market dynamic amongst mature investors,” according to Glassnode. Looks like investors are increasingly bullish on BTC’s long-term upside potential.
The bad(ish) news: Mining experts predict that the Bitcoin network’s hashrate (which measures the total amount of computing power connected to the blockchain) could drop as much as 30% next year.
Why? Bitcoin’s upcoming halving in April 2024 means that miners’ rewards get cut in half, so the cost to mine a block effectively doubles—bringing miners’ break-even point to between $20,000 and $30,000.
Miners who aren’t profitable would be forced to shut down their operations, which would lower Bitcoin’s hashrate.
In the end it’s survival of the fittest. Efficient equipment and low power costs will be crucial for miners to survive the next Bitcoin halving.
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Japan Is Bullish on Web3
In a world where regulators are growing wary of crypto, Japan set its sights on building a web3 future. Prime Minister Fumio Kishida announced last Tuesday that Japan is planning new web3 policies in the latest expansion of its inclusive stance on crypto.
Quotable: Kishida reiterated that “web3 is part of the new form of capitalism,” referring to Japan’s recent efforts to craft new policy guidelines for stablecoins, NFTs, and DAOs.
Big picture: Where other countries fear crisis, Japan sees opportunity—but that hasn’t always been the case. Japanese regulators clamped down on crypto after the Mt. Gox hack in 2014 and are only now reversing course. The country’s emerging pro-web3 stance could make it a serious contender for becoming one of the world’s crypto capitals.
In other news:
Meta remains “fully committed” to its metaverse ambitions despite a $3.7 billion metaverse-related loss in Q2.
The rebranding of Twitter to X sparked optimism among DOGE holders.
The DOJ wants SBF behind bars for witness tampering.
U.S. Rep. George Santos was reportedly involved in a crypto version of the Nigerian prince scheme.
Shibarium, the upcoming SHIB-based layer 2 blockchain, went live for public testing.
Crypto Job Board
And that’s what you need on your radar today in crypto. Would you get your iris scanned by one of Worldcoin’s spooky orbs? Curious to hear your thoughts, so hit reply and sound off. See you next Tuesday!