By Evan Spicer
Director of Cryptocurrency Investigations
The big news in the world of new cryptocurrencies towards the end of October 2021 was the release of Worldcoin. If you want some, you can get a little bit for free. All you need to do is get your eye scanned. What could go wrong?
MyChargeBack has seen bright new crypto ideas go wrong plenty of times, often with disastrous consequences for those who could afford it least: the consumers. We are continuing to develop tools to help get them out of those situations, but that doesn’t make it any less frustrating when we see new potential hazards pop up.
The idea — or part of it — behind the Worldcoin Orb is that the pattern of the human iris is even more personal than a fingerprint. The man behind Worldcoin, tech whiz Sam Altman, decided to leverage that fact to create a cryptocurrency with a global reach. To that end, he created hundreds of shiny metal spheres called “orbs” that are being installed in public areas of the world’s major cities. All you need to do is put your face up to the orb and it determines if your unique iris pattern has received its allotted dose of free Worldcoin. If not, you get a personal code representing your share.
Let’s look at this new cryptocurrency trend with an “eye” on consumer protection.
Among the stated principles behind the creation of Worldcoin is driving a broader adoption of cryptocurrency, leading to a more crypto-savvy population, with less fear of using it as part of their daily lives. A second goal is to create the infrastructure for a future basic universal income. After all, if everyone on the planet has a crypto wallet tied to their iris (figuratively speaking), it would make for a relatively secure and personalized account.
Whatever your opinion regarding Worldcoin’s goals, it’s hard to ignore that a number of potentially serious hazards and pitfalls seem to have been baked into Worldcoin’s cake. We’ve seen crypto go bad before, and that was before big silver spheres were placed in the world’s major cities to capture everyone’s personally identifiable information.
Worried about your eyeprint being added to some nefarious biometric database for ever and ever? Well never fear: Altman pinky-swears that Worldcoin deletes all of your private data and that the only thing that’s saved and transferred to their network is the code that your iris scan generates. Of course, that excuse has generated no small amount of controversy all on its own. After all, since the code is used to check future iris scans, the pertinent data is obviously being stored. This fact has earned Altman the undying enmity of the more ideologically motivated crypto communities: the libertarians, the privacy people, the anti-government types, and the anarchists, to name a few.
Truth be told, they have a point. MyChargeBack has learned from experience to take matters of data security very seriously. Among our clients are many who have through our efforts received substantial refunds based on the merchant’s handling of their personal data. On the other hand, much of our cryptocurrency forensic investigative work depends on digging up details of transactions that the merchants assumed to be untraceable.
But to Altman’s credit, he has succeeded in winning over a very impressive list of investors, including the major crypto exchange Coinbase, the billionaire co-founder of LinkedIn, Reid Hoffman and the legendary American venture capital firm Andreessen Horowitz.
The $25 million in seed funding that Worldcoin has amassed so far has resulted in a valuation of $1 billion for the company. This is no small figure. Worldcoin has become the best funded new cryptocurrency in quite some time. Not that that should make anyone too optimistic about its future.
The past decade has seen literally thousands upon thousands of “altcoins” (that is to say, any cryptocurrency besides bitcoin) appear on the market. Many have experienced a brief period of hype and promise, only to crash and burn. And sometimes that crash has even been planned ahead of time, in the hyper-modern version of pump-and-dump or Ponzi schemes.
Even many of the coins that were created with the purest of intentions and the savviest of business plans have failed spectacularly. Only a very tiny percentage have managed to stick around for the long term with anything approaching what might be called stability.
And what exactly are investors to do in the event that their deposits were solicited and accepted under false premises and then the underlying crypto platform disappears? Can they claim refunds from their payment methods such as their credit cards or bank wire providers?
The rules and regulations are almost impossibly unclear in these situations. Far too often the merchant is nowhere to be found or is in some overseas jurisdiction safe from litigation or criminal liability. MyChargeBack has been pushing for clearer and more unambiguous regulation of the crypto space with an eye specifically on maximum consumer protection.
While the rapidly increasing wave of regulatory attention being paid to the cryptocurrency space by the world’s governments is beginning to have a positive impact on some of the biggest risks and worst abuses, almost no attention has been paid thus far to the specific needs and concerns of consumers. MyChargeBack has helped to fill this void by developing best practices to track, trace, and recover their unjustly lost funds. While consumers very much appreciate our success in payment disputes, fund recovery, and crypto tracing, they and millions of others would appreciate a fully integrated solution even more. Worldcoin is ostensibly being given away for free for now so its adopters will for the time being be free from the headaches of payment disputes and lost funds. All they have to worry about is potential loss of privacy, identity theft, and being part of some nefarious biometric database.