Do Not Taunt Happy Fun Orb
April 6, 2022 2:35 PM   Subscribe

"Worldcoin promised to jump-start the global crypto revolution with an audacious plan: to give out digital money to all 7.9 billion people on Earth. […] [Worldcoin CEO Alex] Blania strongly pushed back on the suggestion that Worldcoin’s purpose was to harvest the world’s eyeballs in return for a cryptocurrency that may turn out to be worthless. That notion “is just very wrong. I don’t even know where to start, like this is just very wrong.” [...] “We didn’t want to build hardware devices — we didn’t want to build a biometric device, even. It’s just the only solution we found.”"

H/T to Metafilter's Own™ rusty, via the always-delightful Today In Tabs.
posted by Kadin2048 (50 comments total) 10 users marked this as a favorite
 
I'll reiterate my plea here: if anyone can hook me up with an Orb to do reversing/teardown, I would be absolutely delighted. They claim to do a dozen kinds of data acquisition, although I suspect a disappointing bluetooth webcam in a spherical trenchcoat.
posted by phooky at 2:38 PM on April 6 [15 favorites]


Oh crap! I'm an NFT! Godammit.
posted by SPrintF at 2:42 PM on April 6 [6 favorites]


“Ensuring a person is human, unique, and alive is an unsolved problem,” reads an internal Worldcoin deck marked as confidential, which was viewed by BuzzFeed News.

*checks radial pulse*

Whew.
posted by mandolin conspiracy at 2:43 PM on April 6 [4 favorites]


“Ensuring a person is human, unique, and alive is an unsolved problem,”

[opens trenchcoat to show dozens of eyeballs in little tubes]

psst hey buddy

get yours while they're fresh
posted by Halloween Jack at 2:45 PM on April 6 [7 favorites]


A lot to ponder here, for sure.
posted by Aznable at 2:46 PM on April 6 [6 favorites]


It's worth taking a step back to think just how awful this whole enterprise is. The article is mostly about their marketing and scanning affiliates feeling scammed in what looks like very direct labor exploitation. Also the biometrics they are collecting are not being collected with informed consent. There's a distinct air of colonialism about the whole enterprise. The cryptocurrency they promise will be the payment for those biometrics does not exist. And even if it did, it seems quite possible the whole thing is just another crypto scam.

And financing all this perfidy is Andreessen Horowitz, Khosla Ventures, and Sam Altman. Supposed leaders of the tech industry.
posted by Nelson at 3:09 PM on April 6 [6 favorites]


In some countries, especially those in Africa, people were reluctant to be scanned because cryptocurrency scams had run rampant.

[...]

All told, there is a disconnect between the Silicon Valley executives convinced that billions of people from diverse cultures will embrace their grandiose vision and the difficulty that Orb operators have faced on the ground as they gather eye scans from people around the world.

“They don’t care what’s going to happen to you as an individual,” one Orb operator said. “What they care about is what’s happening to their numbers, what’s happening to their Orbs.”


Sounds like Altman and Blania assumed they would find easy marks because "LOL Africa" and instead found regular people who can see through the scam because, well, it's a scam. Especially in Zimbabwe, where people understand how currency bullshit of various kinds can fuck people over. People who've lived through hyperinflation have seen things. Including predatory scams.
posted by mandolin conspiracy at 3:15 PM on April 6 [11 favorites]


[opens trenchcoat to show dozens of eyeballs in little tubes]

Morphology? Longevity? Incept dates?
posted by The Bellman at 3:15 PM on April 6 [15 favorites]


And financing all this perfidy is Andreessen Horowitz, Khosla Ventures, and Sam Altman. Supposed leaders of the tech industry.
Andreessen Horowitz, for one, is heavily vested in the crypto pyramid.
posted by oh.that.courtney at 3:18 PM on April 6 [1 favorite]


This is gonna end with having to watch an ad to live another day.
posted by NoThisIsPatrick at 3:19 PM on April 6 [6 favorites]


I got I guess halfway through and it was just too much. I mean, appalling? Or just frightening. I was just talking to a co-worker today about how much money and power corrupt people. It is the story of humanity, I guess. This terrible thing. Elon Musk torturing monkeys and pigs so he can be the first guy to implant electronics in brains*. They think they can get away with doing whatever they want, ethics be damned. I guess because they do.

*PCRM (The Physician's Committee for Responsible Medicine) has the documents and is trying to help.
posted by Glinn at 3:19 PM on April 6 [4 favorites]


I ask this as an honest question: is there any cryptocurrency scheme that isn’t a scam? Every time I hear of it, it sounds like the “free energy” spiel. Combined with “blockchain “, which is a solution in search of a problem, it’s just a non-starter for me.
posted by JustSayNoDawg at 4:01 PM on April 6 [10 favorites]


This whole cryptocurrency thing seems to me like the plot of a Neal Stephenson novel.
posted by fuse theorem at 4:07 PM on April 6 [1 favorite]


Spoiler: It's the third "future" timeline of Cryptonomicon that never got written.
posted by The Tensor at 4:35 PM on April 6 [7 favorites]


From the article:
[...] the startup primarily plans to make money through the appreciation of its currency. “You distribute a token to as many people as you can,” Blania said. Because of that, the “utility of the token increases dramatically” and the “price of the token increases.”
Uhhhhh... lolwut? This feels like an almost perfect distillation of cryptobrain. Just distribute these tokens and they'll be useful, perhaps even dramatically so, and hence the price goes up. No further explanation or reasoning necessary. It's just so vacuous.
posted by mhum at 4:41 PM on April 6 [9 favorites]


is there any cryptocurrency scheme that isn’t a scam

Some of them seem well-meaning and not intentionally scams. Those are the naïve ones that are destined to collapse or be hacked.
posted by Nelson at 4:49 PM on April 6 [7 favorites]


I ask this as an honest question: is there any cryptocurrency scheme that isn’t a scam?

At this point I don't know of any that are not scams, if only based on the economic fundamentals or energy use or both. Some may argue that Monero or others like it are... okay-ish, but you're still consorting with money launderers, tax evaders and the black market and it's still a speculative ETF asset.

Everything else that includes a deflationary asset model - particularly proof of work chains - is effectively a Ponzi bag holding scheme with extra steps. The relationship between Bitcoin and Tether in particular is totally insane and is basically under fully centralized capture and price pumping due to how Tether just prints billions of fake Tether dollars that are supposed to be pegged 1 to 1 with the US dollar.

Proof of Stake systems are often held up as solutions to the problems of Proof of Work systems, but everything I've read about PoS chains is that it's just PoW with less steps because you can just buy your way into more control or value of PoS systems. I mean it's right there in the name, Proof of Stake.

That being said there are end uses cases for a blockchain as an immutable public ledger but without a mining reward basically no one wants to spend their electricity and computer cycles to maintain it for free. And if no one wants is incentivized to maintain it it's not going to be secure and will be even more vulnerable to attack across multiple surfaces, including just taking over the whole network, and it loses all benefits of being decentralized.

Most if not all of the problems that a blockchain could solve are also easily solved with a centralized database held and verified by multiple trusted parties and public accountability. Like you could pretty much solve most of the problems that blockchains could, in theory, solve just by using a spreadsheet and repository checks with something like Github where there's change logs, checksums and a public record of changes and public mirrors of those databases.

Shoot you can do more secure transactions per day

One of the really scary things - out of many - of this whole insanity around ETFs and blockchains is that a whole lot of people - particularly millenials and younger - that are investing real world money in all of this as a retirement fund and as a hedge against inflation.

Considering how badly they're getting screwed with modern economics and debt culture I can't say I blame them.

But a lot of people involved in this aren't considering the many endless ways this all goes wrong.

There's no guaranteed reason why the main Bitcoin blockchain will continue to gain value even with more and more adoption. At some point the difficulty in solving the cryptographic puzzles becomes economically or technologically unviable, and almost anyone can just copy-paste the code and force a hard or soft fork of the chain.

Which has already happened a bunch of times, notably in the BTC vs BCH (Bitcoin vs Bitcoin Cash) hard fork and split where BTC has been co-opted by centralized vested parties who didn't want to increase the block size to reduce mining difficulty and speed up transaction rates and they have a vested interest in keeping block sizes low, difficulty high and mining fees high, and instead tried to fundamentally alter Bitcoin from the original Satoshi white paper specs by bolting on layers of services like Segwit and Lightning Networks, which are basically extra steps and channels designed to try to have their cake of high fees and small blocks while increasing transaction rates and reducing transaction costs at the same time, and this has failed spectacularly and now the going mantra isn't that Bitcoin was ever meant to be digital cash to be spent but now it's digital gold that's supposed to be a stable store of value. Which it's not.

Another big picture problem in all of this is that - by design - the structure of Bitcoin and most of it's related forks or related technology means that it's not physically possible to mine all of the (in Bitcoin's case) artificial cap of 21 million whole coins without facing the problem that you'll run out of energy and atoms in the known universe before you can mine them all due to the difficulty scaling as the blockchain progresses, and we're already seeing network effects of these limitation.

Like this point gets totally glossed over and missed by almost every cryptocoin enthusiast I've ever met and this point sails right over their head that, no, you don't get to keep solving exponentially increasing difficulty cryptopuzzles without exponentially increasing power consumption and computing cycles and - by design - there's no solution to this or end game that doesn't violate the laws of thermodynamics.

Related to this is the looming threat to these blockchains through quantum computing and cryptography, which will make most of these technologies useless through making solving the prime number crypto puzzles trivially easy instead of difficult, which will likely make the perceived value of these systems crash and plummet to zero because now they're no longer secure in the way that they were secure with traditional plain old silicon digital computing.

Worse, the perceived value of cryptocoins is probably accelerating research and funding of quantum computing, and the side effect of this is it's going to break cryptography and privacy as we know it today.

Everything about this is awful. It's not a solution to our modern economic woes. It's not going to liberate the masses. It's just more of the same economic abuse and bullshit except now it's weaponized, de-centralized and difficult to regulate.

And the longer this all goes on the worse it's going to get on a global economic scale. Right now it's already bad enough that despite the artificially inflated market caps and "paper" value of all of these networks if all of the known ETFs crashed to zero it would probably be a global economic crisis on levels we have never scene before, especially since it's mainly going to be all of the little people and bagholders that are going to watch their savings evaporate into nothing more than wasted heat and electrons and they're not going to get bailed out.

The whales and centralized exchanges aren't storing their value in ETFs. They extract the gains they make and convert it to fiat, or owning property or other traditional systems. They mainly hold huge quantities of coin to manipulate market movements for pump and dumps because there's basically no regulation against moving the markets like that, and even if it was regulated it would be hard to enforce without completely breaking cryptography or owning more than 51% of a given Bitcoin-type proof of work network.


What's really wild to me is I've been following Bitcoin basically since the very start, like 2008, back when I was still drinking a lot of tech libertarian koolaid and being very excited by it, because the whole concept is really seductive and is just obfuscated enough to hide the fact that it does the thing that deflationary currencies and/or Ponzi schemes do.

And I remember trying to explain it to someone really early on, maybe someone non-techy. It might have even been my very non-techy Grandma, but that timeline doesn't quite line up so maybe I saw something about earlier concepts of cryptocurrencies or some earlier similar electronic cash tech or maybe I was talking like a cryptobro to someone else.

Whomever it was, I clearly remember them asking questions that I thought were ridiculous at the time but in hindsight they were clearly very astute because they basically called it out as a Ponzi scheme and maybe even made a reference to the Dutch Tulip craze. (Which was, historically speaking, less crazy than most people think it is.)
posted by loquacious at 5:14 PM on April 6 [36 favorites]


> JustSayNoDawg: "I ask this as an honest question: is there any cryptocurrency scheme that isn’t a scam?

Once I stopped thinking so much about how cryptocurrencies worked (e.g.: blockchain, proof-of-work vs. proof-of-stake, etc...) and started thinking more about what cryptocurrencies were trying to do, I've more or less settled on seeing cryptocurrencies as basically modern incarnations of wildcat banking with somehow even less regulation. They're really just attempts at private currency. Famously, wildcat banks frequently failed because they would often issue more bank notes than they had assets to back them. Reading through some of the early Bitcoin stuff, I am under the impression that the pseudonymous Satoshi Nakamoto thought the real problem with currencies, private or not, was the "issue more bank notes" part (hence the cap on the total amount of possible BTC) but completely divorced from the "assets to back them" part. Namely, that somehow simply having a restricted, finite supply of something was sufficient for that something to be valuable, despite the fact that it had nothing guaranteeing that this something could be exchanged for something else of actual value (e.g.: a sandwich, some gold, etc...).

One notable exception to this lack of backing assets are the so-called stablecoins which are allegedly backed by some kind of asset, although it seems that in at least some cases (e.g.: Dai), the backing asset is other cryptocurrency. These are, in my mind, pretty much the same thing as wildcat banks and largely vulnerable to the same kind of failure (i.e.: bank run), though I'm under the impression that in some (many?) cases, there may be non-trivial friction in actually redeeming a stablecoin for the asset that was allegedly backing. For example, I'm pretty sure that you can't actually take a Tether coin (pegged 1-to-1 with USD) and swap it for the USD that Tether allegedly holds to back it. You can sell it on a token exchange for USD but I don't think there's a route to actually redeem it for something out of Tether's reserves. This kind of friction probably makes it harder for classic bank runs to manifest.... but it also makes it harder to know whether or not there were any backing assets to begin with, in which case we're back to where we started with unbacked, non-stablecoin cryptocurrency.
posted by mhum at 5:25 PM on April 6 [3 favorites]


Hear me out. Help fund my launch of Meatcoin, the first cryptidcurrency built on the foodchain. It will be a Proof of Steak system.
posted by otherchaz at 5:30 PM on April 6 [16 favorites]


Does this cryptocurrency do anything different than the usual really slow append-only data log?
posted by clawsoon at 5:30 PM on April 6 [2 favorites]


Depending on intestinal health, about 2 to 5 days after consuming Meatcoins, logs will be generated.
posted by otherchaz at 5:38 PM on April 6 [27 favorites]


I'd appreciate it if this discussion didn't become just another "criticize cryptocurrency" session. I mean I'm here to criticize cryptocurrency too, it's scams all the way down. But we've done a lot of that on Metafilter.

This specific story is much more specifically awful. It's labor exploitation. The cryptocurrency doesn't even exist yet, a major point of contention. They're claiming this all has to do with universal basic income somehow but the reality of that is hard to believe. The near-term goal seems to be to trick a lot of people in poorer countries into letting some company digitize their eyeballs. The cryptocurrency isn't the worst of it, it's the colonialism.
posted by Nelson at 5:40 PM on April 6 [9 favorites]


Cryptocolonialism?

This is interesting:
As the company’s data consent form states, data gathered by the Orb will be used for “purposes such as training of our neural network for the recognition of human irises.”
To me that sounds like they don't actually have a working algorithm for iris recognition. They're hoping to create one in the future, and then sometime after that they're hoping to create a cryptocurrency which they can distribute to the people who contributes their iris images, people who are waiting for their money.

If they would've just paid people for their iris images, it would've cost them $5 million or $10 million so far. How much capital does the company have?
posted by clawsoon at 6:23 PM on April 6 [3 favorites]


What a shambles. Every few paragraphs another screwup appears. Conflicting name of *another* cryptocurrency project? Check. MLM-like marketing, with downlines? Check. Weird reference to a Woody Allen movie and palantirs? Uh huh. Cryptocolonial arrogance? Got it. Legal problems? Yep. And "[t]he currency has not yet been launched," of course.
posted by doctornemo at 6:29 PM on April 6 [2 favorites]


> clawsoon: "How much capital does the company have?"

Don't know how much they have now, but according to Crunchbase, they've raised $125M so far: $25M in the initial round in Oct. 2021 and $100M in another round just last month. The $100M round seems to be coming from two big Silicon Valley VC heavy-hitters, a16z and Khosla Ventures.
posted by mhum at 7:14 PM on April 6 [2 favorites]


"harvest the world’s eyeballs"

For a moment there I thought this was a brainwane sci-fi short story post. And speaking of sci-fi:

"That notion 'is just very wrong. I don’t even know where to start, like this is just very wrong.'"

Ipse dixit fallacy. Tell 'em, Spock.
posted by BiggerJ at 7:25 PM on April 6 [1 favorite]


I ask this as an honest question: is there any cryptocurrency scheme that isn’t a scam?

My current, considered opinion remains that there is, but since explaining why in-thread has become more likely to provoke bickering than healthy, respectful discussion I can no longer be arsed doing do except in response to private messages.

That said: Worldcoin strikes me as absolutely run-of-the-mill grandiose fintechbro "disrupter" move-fast-and-break-things horseshit. I don't think anybody running it has a fucking clue how anything works, except possibly VC Scamming 101.
posted by flabdablet at 7:29 PM on April 6


How can these people be jailed?
posted by eustatic at 8:13 PM on April 6


From the comments, "The Onion is gonna go out of business at this rate." What even is this? It sounds like a real life dystopian sci-fi Bond plot of some kind where even the writers couldn't quite figure it out, but bad things are going to happen.
posted by blue shadows at 9:37 PM on April 6


Cryptocuecat?
posted by They sucked his brains out! at 10:12 PM on April 6 [5 favorites]


"UBI via crypto currency" is one of the few actually-interesting ideas I've seen in the crypto space, but, like everything else in crypto world, they've made a real train wreck of it.

The big promise of capitalism is that it solves problems by letting markets generate solutions in response to money-backed demand for solutions. However, this problem solving mechanism fails when there are people with problems but no money to buy solutions to them. The UBI solution is then to just give people money and let the market do its work.

It's been verrrry slow going getting governments to try UBI at any kind of scale. So it seems natural to they a 'wild cat' solution via a crypto currency to catapult is into the post-scarcity world of the future. Of course, the giant problem for this sort of scheme is going to be identity and fraud prevention; these chuckle heads failed to find a good solution to these core problems.
posted by kaibutsu at 10:23 PM on April 6


The UBI solution is then to just give people money and let the market do its work

I'll add for those who don't know the history that a lot of currency/nationalist policies have succeeded simply by both providing currency and the demand to pay by taxation. This is effectively a double-sided make work program, but it does have positive knock on effects in a keynesian way.

What doesn't work is providing currency but having no taxation policy and instead just a pyramid scheme.
posted by Reasonably Everything Happens at 10:41 PM on April 6 [1 favorite]


It will be a Proof of Steak system.

You're late to the market, there is prior art.
posted by automatronic at 1:16 AM on April 7 [1 favorite]


Maybe I'm late to the party with this, but: did these chuckleheads actually name their Ponzi scheme "Worldcoin," as in a riff on Worldcom, the now-defunct long-distance carrier whose name lives on as a synonym for cooking the books to artificially inflate your stock price?

Do these people actually want to push us toward living in a William Gibson novel, or are they just militantly ignorant of everything that happened more than five years ago?
posted by Mayor West at 5:54 AM on April 7


The claim that collecting eyeball scans is somehow related to UBI is one of the most cynical parts of this enterprise. They say the biometrics are necessary to establish identity to be sure you only give money once to each person. That sounds plausible but it's hardly the most important problem with UBI.

The biggest problem with UBI is the I. You have to be able to afford finding (or creating) that money to give to people. There's a lot of thoughtful economic writing around this, how national financial systems work, and I don't really understand it all other than to know it's an interesting idea.

But I'm pretty sure "invent a new cryptocurrency and give it away while skimming 20% for ourselves" is not on the bingo card of anyone serious about UBI. Are they planning on bootstrapping an entire new global economic system? Bitcoin is the best established cryptocurrency and you still can't use it to buy things ordinary people need: food, shelter, oil from non-war-crime sources. What exactly is someone off the grid in a poor country supposed to do with 3.919343 Worldcoins sitting in some not-bank-account?

Worldcoin seems even worse than magic beans; at least you can cook and eat beans.
posted by Nelson at 7:40 AM on April 7 [2 favorites]


New investigative journalism article from Metafilter's own Mat Honan's publication. Deception, exploited workers, and cash handouts: How Worldcoin recruited its first half a million test users
MIT Technology Review interviewed over 35 individuals in six countries—Indonesia, Kenya, Sudan, Ghana, Chile, and Norway—who either worked for or on behalf of Worldcoin, had been scanned, or were unsuccessfully recruited to participate. ... We found that the company’s representatives used deceptive marketing practices, collected more personal data than it acknowledged, and failed to obtain meaningful informed consent.

... with the ability to cash out ending last fall, for now the promise of $20 or $25 worth of Worldcoin amounts to an IOU from the company. Any tokens users may have in their digital wallets are, for all intents and purposes, worthless.

... What makes the crypto version even more harmful than other forms of data colonialism is that decentralization, the core tenet of blockchain, makes for “very limited accountability…when things go wrong,” ... Simply put, it’s just cheaper and easier to run this kind of data collection operation in places where people have little money and few legal protections.
posted by Nelson at 9:28 AM on April 7 [3 favorites]


The biggest problem with UBI is the I. You have to be able to afford finding (or creating) that money to give to people. There's a lot of thoughtful economic writing around this, how national financial systems work, and I don't really understand it all other than to know it's an interesting idea.

This is where a cryptocurrency can play an interesting role. You can /design in/ the income: Instead of going strictly to miners, one can generate new coins in ordinary user wallets. The problem is then just making sure that those generated coins are actually worth something; Bitcoin proves that it's possible. The second problem - avoiding 'overheating' through taxation, etc - can also be designed in to the system, but likely requires some real thought to get it right, and probably ongoing mechanisms for interventions.

(Bitcoin+Ethereum of course claim to have no such mechanisms, but just make interventions in an ad hoc way. And the cryptocurrency world has seemingly no interest in thoughtful systems design... As 'Line Goes Up' put it: "It’s a movement driven in no small part by rage, by people who looked at 2008, who looked at the system as it exists, but concluded that the problems with capitalism were that it didn’t provide enough opportunities to be the boot." The 'gotta get mine' outlook doesn't lead to thoughtful economic policy.)
posted by kaibutsu at 10:00 AM on April 7 [1 favorite]


The problem is then just making sure that those generated coins are actually worth something; Bitcoin proves that it's possible.

Like I said, Bitcoin has so far failed to prove it's possible.

What has worked in some places without banking infrastructure is mobile phone based payments. Most notably M-Pesa in Kenya. There's absolutely no need or reason to inject cryptocurrency into the mix if your goal is helping people by giving them money. It does work great if your goal is profiteering though. Like keeping 20% of the cryptocurrency you created out of thin air for yourself.
posted by Nelson at 10:41 AM on April 7 [3 favorites]


there are end uses cases for a blockchain as an immutable public ledger

Fewer, I think, than its proponents think. Blockchains are a neat technological solution to a theoretical problem which, it turns out, doesn't come up too often in the real world.

The problem blockchains (ostensibly) solve is the question of how to build a universally trustworthy record if no individual party can be trusted to maintain its integrity. AFAICT they are mostly good at that (with some caveats that if one party has sufficiently high motivation and resources they can overturn the system). The thing is, while in the world of abstract cryptography the paranoid assumption "you can't trust anybody" is taken at face value as a starting point, in any actual society that's not how things work.

I'd contrast blockchains with another major online model for verifying integrity and identity: certificate authorities. CAs are not all that complicated. Any acceptable certificate used for a secure transaction online has a lineage of attestation going back to one of a fairly small number of highly trusted authorities. This is where blockchain fans froth at the mouth, because of course you have to take your trust of those authorities on faith, don't you, and how do you know they are worthy of that trust?

But a certain amount of highly reposed trust is kind of how the world works. At the end of the day, I assume the water that comes through my tap is clean, that my car won't explode, and that if my credit card number is stolen I won't be liable for charges made in my name. Those assumptions are based on faith in specific entities and their regulations, and they're not the sort of faith you can put on a blockchain (i.e. there's no way to build a consensus-based mechanism for ascertaining water quality). Sometimes that trust is misplaced and really bad things happen as a result (ask the people of Flint, MI about that)! But there's not really an alternative, if you're going to live in a society, to trusting in a certain level of functioning and good-faith from the institutions of your society.

So from my point of view, everyone who wants to put, say, monetary transactions on the blockchain is looking at my life and saying, "you currently trust a million institutions to keep your routines humming along. I can make it so you only have to trust 999,999 institutions, in exchange for making a lot of the stuff you do more complicated and resource-intensive". And that's a pretty shitty deal, because if an institution I depend on breaks down or betrays me, that hurts and maybe kills me, but there are still 999,999 ways that can happen even if all my money has somehow been taken to the magical land of complete paranoia where I never have to trust anyone.

Add to that the fact that societally, people are frankly comfortable with centralization and trust. People like to keep their passwords in one place (LastPass or even Google), their finances in one place (Mint), their news in one place (RSS oh wait nobody but me uses RSS anymore, fine, Twitter), and so forth. They are willing to trust institutions that let them streamline this even when those institutions (Google, Facebook, Twitter) probably don't deserve that trust. Nobody wants to live in a trustless society.

Broadly, bitcoins are what happens when you take an interesting math problem and pretend it's a good description of anything in the real world.
posted by jackbishop at 10:52 AM on April 7 [7 favorites]


It's an even shittier deal, if in the process of making your distributed system workable, you add layers and layers of centralized but basically unregulated authorities like exchanges, wallet stores, currency bridges, etc. There was a case recently where a software exploit on smart contracts on a DAO allowed for the "theft" of a whole bunch of NFTs. I scare quote theft because, if you're happy that the authority for ownership of a thing is a blockchain, and the authority for what operations you'll allow on your blockchain property is a coded contract, can theft even be said to have occurred there? I would say yes, but only in the land of governmental laws, maybe, the very central authority they're trying to end-run.
posted by Jon Mitchell at 12:04 PM on April 7 [1 favorite]


Apropos of my discourse on trust above and how far mathematical models are from reality, James Mickens has pointed out that, notwithstanding the many discourses on theoretical security risks, there are really only three threat profiles individuals in the real world have to worry about: sketchy entities who don't actually know you but want to steal your identity/scam you (defeated by TLS and a bit of common sense), vengeful but probably not too tech-savvy personal enemies who want to hurt you (mostly defeated by the same technique), and government-size actors you've managed to somehow induce to taking a malign interest in you (nothing you do will help and they'll just torture or kill you to get what they need).
posted by jackbishop at 1:25 PM on April 7


I was briefly curious about the size of the Beanie Baby economy. Glancing around briefly I saw an excerpt of a price guide for Stripes:
* Issue price: $5
* 1998 value: $250
* Predicted 2008 value: $1k
* on eBay, 2022: $1
posted by Pronoiac at 10:13 PM on April 7 [2 favorites]


bitcoins are what happens when you take an interesting math problem and pretend it's a good description of anything in the real world.

To be fair, that's also the signature move of huge amounts of mainstream economics.
posted by flabdablet at 6:28 AM on April 8


Blania described a futuristic world awash in Orbs of varying shapes and sizes, where each person would be assigned a unique and anonymized code linked to their iris that they could use to log in to a host of web and blockchain-based applications.
I'm not an expert on iris scanning, but this seems to imply that this iris-scanning tech will have to exist on the devices one uses to "log in" to these new services. I'd be surprised if my 720p webcam would cut it. Is this going to be the CueCat all over again? Nah, the concept is so broken it'll never get past the data-collection phase.
posted by achrise at 10:20 AM on April 8


bitcoins are what happens when you take an interesting math problem and pretend it's a good description of anything in the real world.

To be fair, that's also the signature move of huge amounts of mainstream economics.


That's not entirely fair. Most of the problems in economics aren't mathematically interesting.
posted by jackbishop at 11:09 AM on April 8 [3 favorites]


To be fair, that's also the signature move of huge amounts of mainstream economics.

Well, usually economics tries to create models that are in some way predictive of reality.

Bitcoin is a model that has been temporarily summoned into reality through sheer force of belief.
posted by Kadin2048 at 1:19 PM on April 8 [1 favorite]


So, after finding out that these guys have somehow raised another $100M (at a $3B valuation) recently from a16z and Khosla, I got a little curious to see if I missed something here. Could their business plan really just be "line goes up"? After a bit of digging, I've come to the conclusion that it does seem to be pretty much that. The vast majority of things the Worldcoin people have been writing about involve their Orb and the iris data they're gathering and all of that. They've actually provided almost no information about what is actually supposed to happen with Worldcoin. However, I managed to stumble upon this tweet which links to Wayback Machine archives of delisted YouTube videos posted by Worldcoin as training materials for these Orb operators.

First things first: Worldcoin is not a UBI scheme. Their entire system is based on a one-time grant of Worldcoin, though they mention some kind of vesting period so that people don't get all their allocated Worldcoin at once. As far as I can tell, there is simply no I in the UBI and never mind the B, though they do seem intent on achieving the U. Specifically, in one of the videos, they say that there will be a total of 10 billion Worldcoins. Given that that they are keeping 20% of coin pool to themselves and their investors (which is already not a great sign), that leaves 8 billion coins to distribute which is just about the current population of the world.

Anyways, here's some quotes from the training materials. From this one (~2:40) regarding how to pitch Worldcoin:
After I explained what Worldcoin is, I like to ask the user "have you heard of Bitcoin?", for example. And if they say yes, now's your opportunity to tell them why Worldcoin can be even better than Bitcoin. And the reason for that is as follows: Bitcoin only has a few amount of people holding it so even though it's very valuable it can't be used every day because, well, quite frankly it's just in the hands of a very few rich people. However, the reason why Worldcoin will be better than Bitcoin is because we aim to give it to every single person in the world. So that way we can actually use it and get the benefits together.
From this excerpt, I'm inferring that this guy, Shravan Nageswaran, Worldcoin's head of growth, is leaning pretty heavily on a kind of "network effect" benefit to simply having lots of people holding Worldcoin... but I don't see how network effect really applies here. I suspect a lot of this comes down to what this guy thinks "use" (as in "using Worldcoin") really means.

Which brings us to this bit from this video (~1:50) about Common Questions:
Question number two that we see most often in the field is "You're giving me this Worldcoin but why is this valuable? And can I just give it to you for some cash?" And if someone asks if they can exchange Worldcoin for cash, your job is to say "no". Because as a distributor not only are you supposed to educate people on what Worldcoin is but you need to encourage them to hold onto it and realize its true value. Now, sure you might be wondering why is Worldcoin valuable but for that let's take a look at any currency in the world and let's learn that a currency is really only valuable as people believe in it. So that's reason number one why you shouldn't exchange it for cash. And reason number two is, quite frankly, because you can't, right. So, Worldcoin has in place a vesting system and what that basically means is we don't give you 100% of your Worldcoin right when you sign up. We basically unlock it little by little over time. So, at the end of a few years you'll have all of your Worldcoin unlocked and by then you'll be able to be a significant player in this new financial system. So that's the answer to question number two.
Once again, we find ourselves deep in cryptobrain. The closest he comes to answering the question "why is this valuable?" is "because people [will] believe in it" which isn't really any kind of answer. Also, regarding the whole "currency only has value because people believe it" idea, I would counter with the chartalist view (i.e.: a sovereign power that can effectively levy taxes in a given currency gives that currency an intrinsic use value). But, also, the observant reader will note a contrast/conflict between this snippet's HODL philosophy and the previous snippet's "if everyone has Worldcoin, then everyone can use it unlike BTC". Worldcoin has value because people can "use" it (but how are they using it? *shrug*) but also because it has value you should hold onto it and not use it. And also he claims that you can somehow become a "significant player" in this new financial system? WTF? I'm sure they're going to explain how that's going to happen when everyone gets allocated one (1) Worldcoin... except for the founders and investors who are going keep 2 billion-with-a-B Worldcoins for themselves. Even assuming that's spread across 2,000 individuals, that still gives each of them on average a one-million-fold larger allocation than any random schmoe. Good luck to all our future significant players in this new financial system.

Meanwhile, we can do a little calculation of how much each person could theoretically be getting from a Worldcoin allocation. If we assume that Worldcoin somehow attains the current market cap of BTC, the largest cryptocoin right now (~$800B), that works out conveniently to just about $100 per person. If we assume that Worldcoin only attains the market cap of ETH, the 2nd largest (~$380B), then it drops down to $47 per person. If we go down to the 3rd largest (Tether, $80B), then we're down to $10 per person. As you can imagine, once you start going further down the list of existing cryptocoins by market cap, you get rapidly shrinking valuations. By the time you're at #10 on the list, you're at less than $3 per person. And keep in mind that this is a one-time allocation that vests over some (unknown) number of years.

So, what even is going on here? How and why did big-time VCs commit $100M to what appears to be a pure Underpants Gnome business ? Aside from the ever-present possibility that, yes, Silicon Valley heavy hitters really are this foolish there may be one other thing going on here: the Orb itself and the iris data they're capturing. IMHO, the only way this isn't just shoveling piles of money into a furnace is if the real play here is to develop a universal biometric ID system and that the whole crypto angle is just a really bad smokescreen for it. I also think that this is a bad plan but at least it's a plan and not just blind faith that line goes up.
posted by mhum at 6:21 PM on April 8 [5 favorites]


So, what even is going on here?

Oh wait, I forgot to mention a third possibility aside from foolishness and pivoting to and/or secretly-actually-being-all-about biometric ID systems. Namely, that the VCs and/or founders can just treat it as a straightforward pump-and-dump scam. However, it seems like there are faster and easier ways to do a pump-and-dump (c.f. 90% of crypto) that don't involve specialized (custom?) hardware and extensive field operations.
posted by mhum at 6:45 PM on April 8 [1 favorite]


I can't think of a single thing they've done with their Orb that they couldn't have done better, faster, cheaper and way less creepily with a phone app.

Every single aspect of this thing is a pointless, overcomplicated shitshow. It's a bizarre, delusional 21st century art piece of the most expensive kind, and I can only hope the VCs who bought it get exactly as much enjoyment from their spending as they deserve.
posted by flabdablet at 12:24 AM on April 9


Thank you for the detailed rundown on the financial chicanery, mhum. I didn't have the patience or stomach to work that hard.

why did big-time VCs commit $100M

I like your theory they really just want the biometrics. Another explanation is that VCs are really not as smart as we give them credit for. They tend to invest based on trends and gut instincts about founders. The explanation could be as simple as "crypto is hot and I like these guys and their audacious plan to collect biometrics from the entire world".

Andreessen Horowitz in particular has bet huge on cryptocurrency, this investment is consistent with them. Sam Altman's on the record saying he's excited about UBI and maybe that's sincere but I feel certain there's a profit motive involved. I wonder which partners at the firms were leading the investment.

I think it's remarkable that the $100M raise was announced on March 22 and this Buzzfeed story came out just two weeks later, April 5. Technology Review's big story came out April 6. Both stories represent months of investigative journalism and I have to think Worldcoin knew these stories were coming. Probably the VCs knew too, although maybe not in detail. I suspect they invested in Worldcoin not despite the colonialist awfulness but because of it.
posted by Nelson at 7:44 AM on April 9 [1 favorite]


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