This week, Worldcoin, a collective that aims to serve as a proof of personality in a world where it’s hard to tell the difference between human and robot, has raised $115 million in Series C funding.
Led by 10-year-old Blockchain Capital, whose bets include Coinbase, Kraken and OpenSea, the investment has brought Worldcoin funding to at least $240 million, although the controversial organization — founded in 2019 by OpenAI CEO Sam Altman — She has a lot to prove.
Yesterday, we spoke with Spencer Bogart, General Partner of Blockchain Capital, about what gave him the trust in Worldcoin, which aims to create a global identifier, a global currency, and an app that enables payments, purchases, and transfers. Like many others, we wondered how it could achieve its goals when, for now at least, its mission depends first and foremost on convincing tens of millions of people to let Worldcoin scan their irises with tech-intensive futuristic balls.
Below is part of that conversation, edited for length. You can also hear the long conversation here.
Investors participating in this new round include former backer Andreessen Horowitz, Bain Capital Crypto and Distributed Global. Did Khosla Ventures or Tiger Global, also previous backers, do a rework?
They may be part of this financing; I don’t think they are a big part of it.
How much do investors own from the company? I think Sam Altman is difficult to negotiate given the strength he has and his vast experience on the other side of the table as an investor.
This is the correct description. Sam is a phenomenal founder and knows how to run the cover schedule. Again, I apologize. It’s not a number in front of me now. Generally, companies sell 20% off [equity] in each financing. Things can certainly move down or up from there significantly. I think in this case, the number would be measurably lower than the number on Series A, Series B, and Series C.
How long have you been talking to Worldcoin, and what motivated you to lead this transaction?
The original configuration was Sam wondering: What if I could create a cryptocurrency that I could distribute to everyone in the world and everyone would get an equal share of it? For me, from a project perspective, this is definitely interesting [though] I don’t know it’s something that we’d be very excited to go and underwrite based on the things that our team would normally be interested in.
[Meanwhile] This basically requires making sure that no one can accumulate a disproportionate share of it, which requires that people be able to recognize unique human beings. And that really gets into the part that we’re excited about, which is the world number. It is the ability to easily distinguish between machines and humans on the Internet [because] Most of the internet is supported by advertising revenue and it costs about the same to serve bot traffic as it does to serve human traffic. This is why many applications and service providers use CAPTCHA to distinguish between bots and humans. But this is no longer applicable in a world of advanced automated systems and especially AI-powered things. It also does not differentiate between unique humans, so I don’t know if the same person will come around to consuming a resource excessively
Which brings us to: Well, how can we provide a way to differentiate between humans and bots and ensure that each human is unique?
Which leads to biometrics.
The root of what humans are all about is biometrics, and my first thought was: why create this device meant to go scan eyeballs? Like, billions of people are already walking around with the iPhone. Why don’t we use Face ID, right? The problem is that human facial structures do not have enough randomness or entropy to distinguish between unique humans, on the scale of tens of millions or hundreds of millions of people.
I didn’t realize this was the case.
It’s not something that happened to me either. I didn’t think about the fact that once you pass a hundred million people, there will be a lot of people who look like Spencer Bogart; Their facial structures would be insufficiently distinguishable from those of mine. Fingerprints have the same problem; There is not enough randomness in fingerprints.
This brings us to two viable options, DNA that has enough randomness to be able to prove human uniqueness on the scale of billions of people. But you provide a lot of information with DNA. Then there is iris. It also turns out that there is an insane amount of entropy and randomness in the human iris. And in this case, the team built in an insane amount of protection. You get an iris scanner, it doesn’t store your iris by default. It is deleted on the device immediately. It is only used to create what is called an iris code, which is a unique designation or coding for the iris of an eye. And it is compared with others. And now, with these iris symbols, we don’t know her name or her location or anything. The one thing we all know about them is that they are unique human beings.
I think the foundation’s strategy – helping companies reduce their interactions with bots – is the most lucrative opportunity right now for Worldcoin. You can also offer this cryptocurrency to everyone, although it is not clear to me how people will use it. But before any of this can happen, you need to get a meaningful number of people in front of these weird and inaccessible orbs, when people are really worried about biometrics and cryptocurrency. Worldcoin says it has now scanned the eyes of two million people. How much does this need to be meaningful? one billion?
These are the right questions. It comes down to: Do you have a network of provably unique humans? And this will only be interesting to applications and organizations on a certain scale. But I think it will depend on the use case. By the time you reach 10 million unique users, there are already a bunch of apps out there that will want to use that, while others won’t be interested in using it unless you’re on a network of 500 million, 1 billion, or 2 billion people.
Some of the other challenges here are yeah, obviously, the orb distribution. Currently there are 200 to 300 [orbs] in the wild today, with another 2,000 manufactured and awaiting publication. Then there is the matter of public perception. sThe thing that we’ve indicated as part of the investment is: Are there going to be a lot of negative perceptions of this that, no matter how confident we are that this is 100% workable, the public perception will be so negative that people won’t want to participate?
So far, the data suggests otherwise. Worldcoin has already entered nearly 2 million people by running a bootstrapping strategy on capital-intensive ground, and that’s only in beta testing. This is without pushing or pulling any marketing levers; This is without even having the protocol live on the mainnet. This is only in the initial test.
As for some things that might use this, Elon Musk has been talking a lot about the bot problem on Twitter, and he’s promoted the idea that if we get everyone to pay $8 a month, it will help solve the bot problem. We believe World ID is a frictionless way to solve the same problem and would be a higher fidelity solution. And there are a bunch of new apps and services that didn’t exist because we couldn’t make that distinction historically. What these are, I don’t know, but we’re interested in funding them.
Again, you can hear a lot about investing here, including why OpenAI itself may become a major customer of Worldcoin one day, and why Bogart didn’t bother when hackers recently installed password-stealing malware on the machines of several Worldcoin orb operators, and why he was fascinated by flash deals on the blockchain.