The ChatGPT guy wants to scan your eyeball with an orb. What could go wrong?

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Jordan Heath Rawlings Those of us who don’t own cryptocurrency or have plans to monetize AI or other plans to get rich, somehow from impenetrably complicated technology can sometimes get confused by how all these things work. What benefit do they offer? What’s the risk to us? Why does it all feel so vaguely dystopian? It can get complicated and then sometimes it’s simple, simple like this. See, the guy who made chat GPT would now like you to put your eyeball up to this orb he’s created so that he can scan your iris and record it, and in return you will get some cryptocurrency that doesn’t actually exist yet. Deal? Now, see that simple, right? Yeah, welcome to Worldcoin, which you cannot actually currently get in Canada first because it doesn’t exist yet. And second, because governments enrich developed countries like ours tend to have rules and regulations around things like convincing people to let you scan their eyeballs now for the promise of crypto later. But that’s not, so in many countries in the global south and some in Europe where world coin has already scanned, as I record this 1,832,825 irises. What do they plan to do with those scans? Why would people stick their eyes up to an orb for the promise of some digital money at some point in the future? Why am I unsettled? By the fact that this whole eye scanning thing is being overseen by the same dude who is also creating artificial intelligence? Look, today, I. Just want to figure out what the hell is going on here. That’s all.

I’m Jordan Heath Rawlings. This is The Big Story. Jacob Silverman is a journalist in New York who focuses on cryptocurrency. He is the co-author of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud. And he’s also the host of a podcast about the fall of FTX called The Naked Emperor. Hello, Jacob.

Jacob Silverman Hi. Thanks for having me.

Jordan Heath Rawlings You’re welcome. I’m really glad you could make time for us. I wanna maybe just start, for those of us who are not familiar with the cryptocurrency slash tech industry, who is Sam Altman and what is he known for?

Jacob Silverman Sam Altman is an entrepreneur and rising figure in the tech industry, I’d say, although within the industry is already pretty prominent and well regarded. He, he got us start earlier, at a couple different companies and he was part of Y Combinator, which was a funnily named kind of tech incubator that gave funding and support to early stage tech startups. So he has this vast professional network that he’s formed by basically being one of the main guys to, to help a lot of early stage startups get off the ground. And in more recent years, he’s become associated with AI through the company, Open AI which he’s one the co-founders of, and now through this cryptocurrency company called Worldcoin.

Jordan Heath Rawlings That’s what we’re talking about today because this is, even for somebody like myself and probably some of our listeners who, who don’t understand everything that goes on in cryptocurrency worldcoin seems strange. What is it?

Jacob Silverman It is in classic tech fashion or Silicon Valley fashion, a very utopian project, at least in in, in name. But it’s one of those utopian projects that can kind of seem a little dystopian practice. So basically, they wanna scan the eyeballs of as many people as possible all over the world, and collect that iris scan and through various promises of securing it and encrypting it and all that, use it as a form of identity to distribute their own token, a Worldcoin token to as many people as they can. They call it sort of a, a form of universal basic income. Beyond that, it, it’s very similar to a lot of cryptocurrency projects, I would argue, but in its ambition to basically give everyone in the world this token. It, it is a little bit unusual.

Jordan Heath Rawlings How does this exchange work? Why would people want to scan their irises and hand that over?

Jacob Silverman That’s a key question and I, I think what we’ve seen so far is basically, this is how Worldcoin does it. They have an orb, they call it this, this eye scanning device, which is…I mean, everything here sort of straddles the line between kind of sci-fi. Again, utopian, dystopian is sort of inter creative, but also a little troubling. And the, these orbs they’ve made, I believe a few hundred of them, but they intend to make thousands, and they’re sent to operators in various countries around the world. A lot of them in the global south. Those people then go out into cities and villages. They scan people’s eyes, the promises either you’ll get some Worldcoin tokens in the future, which, you know, the tokens haven’t been released yet. I think that’s important to note. Or they get something right then like a, a gift card or some local currency or something like that you can kind of see how some problems right there or how this is a, a little bit of a, unusual model and, but right now they’re contracting people to just go and, and scan eyes. And some people say, no thank you. And some people say, okay, I’ll do that for a gift card.

Jordan Heath Rawlings What do they want to do with these iris scans?

Jacob Silverman Well, Worldcoin emphasizes that this is really about having a, a universal ID. They call it a proof of humanity or proof of personhood. And this is a way of, in their mind solving this problem of proving that you’re a human being online and, and not a robot or some scam artist.

Jordan Heath Rawlings I could just click on all the pictures that have a stop sign in them.

Jacob Silverman Right? It it, it seems at times like a solution to a problem that doesn’t quite exist or, or perhaps a misbegotten solution. But that’s how they claim it and they do claim this sort of globe straddling universal ambition of they promise to keep our, our irises safe, but they want everyone’s, and they want to give everyone the token.

Jordan Heath Rawlings How much is the token worth?

Jacob Silverman Right now, nothing, because it hasn’t been released yet. It could happen this summer or sort of any day now. But Worldcoin is in an interesting stage where that it’s been around for a couple years, but still very much in, perhaps a beta or early phase. They’ve been started scanning eyeballs, but I think they’re perhaps in the hundreds of thousands or low millions, and the actual token hasn’t really been released. There’s been, an IOU essentially saying, we’re gonna give you x number of tokens in the future. So it, it still is all very tenuous despite the fact that this company has raised over a hundred million dollars just a couple weeks ago.

Jordan Heath Rawlings Let’s say I take the company’s word for it, that they want to give everybody a universal, identification system, proof of personhood, proof of who you are through an iris scan. That’s great and they’re promising to keep all my data safe, which is something tech companies, never fail at. If I wanted to look at this another way though, what could be done with those iris scans if, you know, not everybody involved was careful and benevolent in all those good things?

Jacob Silverman So I think there are a few concerns there about privacy and what might happen to the data here. One is that although Worldcoin makes a lot of assurances that it goes through various sort of, encryption and analyzation processes, that Worldcoin itself isn’t actually receiving an image of your iris scan. You still have to be able to verify your identity through these various processes, when you engage with their systems. So, you know, if you want to access your Worldcoin in one country or another. It sounds like you will be scanning your eye at some point. We’ve already seen some black markets seemingly developed for iris scans. There was some reporting out of China that Cambodian people were having their irises scan and then sold to consumers in China who wanna get in early on Worldcoin. So these are the kinds of things that inevitably crop up, I think with cryptocurrencies and with new products of this, of this kind. But when it’s of the magnitude of, hey, you have some America’s biggest venture capital firms, investing in another company that aims to scan everyone’s eye in the entire world. That’s, you know, reason to ask some questions.

Jordan Heath Rawlings I know that the cryptocurrency industry is already kind of a little bit of the, wild west around regulations, just because lawmakers have not really caught up with it. This seems like a step well beyond that. Is this legal? What kind of regulations govern private companies, gathering iris scans or other, I guess, bodily functions? I’m not, I’m not even sure how to ask this question, you know what I mean?

Jacob Silverman Sure, sure. I mean, I think we’re still in the area, which is a pretty broad and, and sometimes speculative. One of, you know, what are the downsides here? What could go wrong? Certainly around biometric data, there isn’t a lot of established policy, but I’ll tell you, I, what I think is a revealing anecdote, which I mentioned in my piece for the Globe and Mail, which is that. Sam Altman, one of the co-founders, he recently tweeted about trying Worldcoin for the first time as in getting his iris scanned and he posted a photo on Twitter and he said he did it because he was outside of the US, meaning he can’t try his own product in the US. At least legally they’ve been sort of doing some little pilot things here in the US. But, and that is because we do have securities laws and we do have some, laws, at least in, in, there’s a very good one in, in the state of Illinois that’s been used to enforce some biometric data, privacy protections. But in a large, a lot of places in the world, those kinds of protections don’t exist. And I think there is a lot of concern that this is operating both in a financial gray area with basically the invention and trading of unlicensed securities. And then in very much a privacy gray area with a mass collection of, of iris scans, of biometric data. Often from people in the global south who, you know, if something goes wrong here or they feel deceived, may not necessarily have recourse.

Jordan Heath Rawlings Maybe this is just my opinion, but it feels kind of exploitative to, to go after places in the global south where the economies may not be as advanced or as healthy and try to convince people to part with this crazy sensitive information in exchange for a gift card, or as you put it in an IOU, like there’s a power imbalance here that’s pretty serious. No?

Jacob Silverman Certainly and I, I think anytime that people from Silicon Valley who have basically traditional venture capitalists, investors, and traditional profit motives say that they have a humanitarian purpose or that they’re gonna provide some kind of financial empowerment or emancipation, I think that should always prompt some skepticism because the profit motive is clearly what’s at play here. And backers like Andreessen Horowitz, expect a return on investment. and that’s why we should also be concerned that they may collect very sensitive, personal biometric data on a mass scale because their incentive, of course, is to profit off of that data. And then when you go into certain areas in, in say, Kenya or Indonesia, places that they’ve been going, it doesn’t mean people of course are, are not sophisticated or don’t know how to make their own financial decisions, but it does indicate that people, you know, we know that people may be desperate or may need that gift card or that, or think they need that IOU. And we’ll take it in the immediate moment and it could lead to some bad consequences. I mean, there’s been some good reporting I think in Buzzfeed and in MIT technology review that have talked to people who do feel a bit exploited or sort of feel like they’ve been roped into basically a pyramid scheme when they, they hoped for, for something obviously a little more on the up and up, frankly.

Jordan Heath Rawlings What’s the end game for the investors you mentioned here? How do these iris scans turn into profit for them? Which is the whole point from their point of view.

Jacob Silverman It usually comes back to the token for crypto companies. I mean, if Worldcoin does end up in possession of a huge amount of personal data. I mean, there’s a lot that they could do with that. But more immediately, I think what the investors in Worldcoin and people who end up buying the token are worried about is when is this thing going to debut, which will probably be sometime this year. And, when can I sell it? Because almost invariably in these kinds of situations, there’s a lot of early hype. The price often rises within hours or days of its, of its, debut. And then the insiders typically sell to, frankly, less sophisticated or kind of late comer investors. A lot of everyday people who are only hearing about it now. Right? That’s what the dump phase of the pump and dump and you know, I think that’s the concern here is that not only is there sort of potential exploitation on the collection of personal data and distribution of this token, but also on the kind of market that’s being created and that we’ve seen be created so many times in recent years around crypto, which is that the regular kind of everyday retail traders are the ones who usually miss out or take the losses.

Jordan Heath Rawlings Again, as a cryptocurrency lay person, the prevailing feeling I’ve had about the industry, and I think many, sort of casual observers have had is that it’s, it’s had a very troubling past 12 months, to put it mildly. What does this kind of project, which is obviously as we’ve discussed a little bit beyond a traditional crypto project, what does it tell you about how the industry is reacting to its recent troubles? And I mean, you’ve covered a lot of those troubles, so you must have a sense of like where this is going.

Jacob Silverman Yeah, I, I think it’s interesting and revealing, we’ve had, not to get too deep into it, but we’ve had numerous bankruptcies over the past year and a, a lot of litigation and people going to jail and there’s a lot more to come. And one would expect, I think, a little more introspection, but one thing I think is very notable here is that despite a lot of criticism from the start for over a year about Worldcoin, they raised 110 million or so in venture capital and announced that just a couple weeks ago. There’s still some money there because these big venture capital firms see that it’s worth for them and they still have a lot of money in the bank, frankly, from their last fundraising rounds before interest rates went up. So I, I think it’s very interesting that crypto markets are in decline, the trading volumes are, are down, a lot of people are in the red or have their money stuck on FTX or other platforms that are going through bankruptcy proceedings. Yet you still have these venture capital firms pouring tons of money and a lot of hype and ambition into a company or a project like Worldcoin and not really listening or heating some of that public criticism. You know, they don’t necessarily want to listen to the regulators as we’ve seen in recent weeks. But, you know, I think there is good faith criticism coming from journalists and critics and people who have been burned by the market. And Worldcoin is sort of shocking as a project because it, it seems to fly in the face of a lot of that.

Jordan Heath Rawlings To take off the skeptic hat one more time here, if this all works the way Altman and company want it to. How does this A, coin but B, also, I guess the process of everybody having an iris scan that they can use for whatever purpose. How does this impact like global finance or security? It is a huge idea.

Jacob Silverman I suppose that they would become, if not preeminent, but very influential financial authority and intermediary. I mean, crypto typically speaks towards ideas of decentralization and disrupting existing power structures, but I think we’ve seen that in practice it doesn’t often do that or sometimes replicates existing power structures. So I would doubt that worldcoin, which has profit seeking investors, which just be able to sort of create a decentralized global financial network and kind of yield it to the people. I, I think, though the ambition there is is yeah, to have kind of a, a Visa with your eye perhaps or a MasterCard with your eye, and also to create this kind of global currency in the form of the Worldcoin token that ostensibly has value and is traded on global crypto markets. It’s a vast ambition. I don’t know if it’s even possible to achieve or how long it might take, but yeah, no one has ever really faulted in Silicon Valley for speaking in those world changing terms.

Jordan Heath Rawlings Well, not if it gets you another round of funding.

Jacob Silverman Exactly. And you know, a, as we just saw a couple weeks ago, Sam Altman’s backers are very excited about what he is doing and, and certainly with Open AI and he seems to sort of have both the pulse of the industry and, and as much backing as he wants.

Jordan Heath Rawlings So what comes next, for this project or scheme or nefarious plot or whatever you want to call it, depending on your point of view, they’re out there gathering more eyeballs, and we’re just gonna wait and see if this coin ever shows up? Like what are we watching for?

Jacob Silverman That is, strangely enough, what we’re waiting for basically is when is the coin gonna debut? Is this gonna follow the traditional dynamics of cryptocurrency projects that receive a lot of hype, which is that it rises a bit. Or there’s an immediate spike and then there’s often a crash or a long tail. The other sort of material immediate question is, can Worldcoin produce enough of these orbs, these iris scanning orbs, which I believe are manufactured in Germany, and then create this network all over the world of contractors and people who can then go into towns and and cities and scan the eyeballs of the world and then distribute the token eventually. That is the plan, and there’s I think few milestones you would look for in the immediate future except, okay, let’s see the token and let’s see if you actually managed to distribute this thing widely as you intend?

Jordan Heath Rawlings It’s always a great plan when we are asking if we can produce enough super orbs to scan enough people’s eyes. 2023. We don’t have flying cars, but we got the orbs.

Jacob Silverman We certainly have the orbs.

Jordan Heath Rawlings Jacob, thank you so much for this. It’s been a pleasure and a fascinating story one way or the other.

Jacob Silverman That’s right. The characters are always good in crypto. Glad to do it.

Jordan Heath Rawlings That’s Jacob Silverman, co-author of Easy Money: Cryptocurrency, Casino, and Capitalism in the Golden Age of Fraud, and Host of the Naked Emperor. That was The Big Story. If you’d like to subscribe to The Big Story at some point in the future when I create my own cryptocurrency, I will definitely give you some. You need to get 10, maybe 50 in other people to subscribe to get one token of a coin I haven’t named yet, but again, will definitely exist.

You can find us on Twitter @TheBigStoryfpn. You can write to us via email hello@TheBigStorypodcast.ca, and you can call us and leave us a voicemail and tell us please if you’d have your iris scanned. The phone number is (416)-935-5935. You can get The Big Story on every single podcast player imaginable and you can ask for it on a smart speaker by saying, play The Big Story podcast. Thanks for listening. I’m Jordan Heath Rawlings. We’ll talk tomorrow.