This week, WorldCoin, an organization that aims to serve as proof of individuality in a world where it’s hard to separate humans from bots, raised $115 million in Series C funding.
Led by 10-year-old venture firm Blockchain Capital, whose stakes include Coinbase, Kraken and OpenSea, the investment brings WorldCoin’s funding to at least $240 million, even as the controversial organization – OpenAI – founded in 2019 by Sam Altman, CEO – has a lot to prove.
Yesterday, we talked to Blockchain Capital General Partner Spencer Bogart about how he found confidence in Worldcoin, which aims to create a global ID, 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 depended first on convincing hundreds of millions of people to use Bitcoin to mine a futuristic, tech-dense globe. Get permission to scan your irises.
Below is part of that conversation, edited for detail. You can also listen to long conversations here.
Your co-investors in this new round include previous backers Andreessen Horowitz, Bain Capital Crypto and Distributed Global. Will Khosla Ventures or Tiger Global, also previous backers, turn up again?
They can be part of this financing; I can’t believe they’re a big part of it.
How much of the company do investors own? I find it difficult to negotiate with Sam Altman given the power he wields and also his extensive experience on the other side of the table as an investor.
This is an accurate description. Sam is a formidable setter and knows how to manage the cap table. Again, I’m sorry. I don’t have this figure in front of me right now. Generally, companies sell 20% [equity] in each funding. Granted, things could go down or up significantly from there. I think in this case, the numbers are going to be meaningfully lower than the Series A, Series B, and Series C.
How long have you been talking to WorldCoin, and what inspired you to lead this deal?
Original Origin Sam was thinking: what if I could create a cryptocurrency that I could distribute to everyone in the world and everyone gets an equal share of it? To me, from an enterprise perspective, it’s certainly interesting [though] I don’t know that it’s something that we would be very excited about and would underwrite based on things that our team is generally interested in.
[Meanwhile] This basically requires ensuring that no one person can accumulate a disproportionate share of it, which requires people to be able to identify unique humans. And that really comes down to the part that we’re excited about, which is World ID. It is the ability to easily differentiate between machines and humans on the Internet [because] Most Internet advertising is supported by revenue and it costs just as much to service bot traffic as it does to service human traffic. This is the reason why various applications and service providers use CAPTCHA to differentiate between bots and humans. But this is no longer viable in a world of things powered by advanced automated systems and especially AI. It also doesn’t differentiate between unique humans, so I don’t know if the same individual is coming in to over-consume a resource.
This leads us to: OK, how can we provide a means to differentiate between humans and bots and ensure that each human is unique?
that leads to biometrics,
The crux of what defines humans is biometrics, and my first thought was: why build this custom hardware to scan eyeballs? Like, billions of people are already walking around with iPhones. Why don’t we use Face ID, right? The problem is that there is not enough randomness or entropy in the structures of human faces to distinguish between unique humans on the scale of millions or billions of people.
I didn’t know that was the case.
This is not something that happened to me. I didn’t think about the fact that once you cross one hundred million people, there’s going to be a lot of people who look like Spencer Bogart; The texture of his face will be quite different from mine. Fingerprints have the same problem; There isn’t enough randomness in fingerprints.
This leads us to two viable options, DNA containing enough randomness to be able to prove human uniqueness on the scale of billions of people. But you’re providing too much information with the DNA. Then there is jealousy. As it turns out there is an insane amount of entropy and randomness in the human iris. And in this case, the team has built in an insane amount of security. You get an iris scan, it doesn’t store your iris by default. It is immediately deleted on the device. It is used only to generate the iris code, which is a unique mapping or encoding of your iris. And it is compared to all others. And now, with these iris codes, we don’t know their name or location or anything. All we know about them is that they are unique human beings.
I’m guessing an enterprise strategy – helping companies cut down on their interactions with bots – is the most attractive opportunity for WorldCoin right now. You could also distribute this cryptocurrency to everyone, although it’s not clear to me how people would use it. But before that can happen, you need to get a meaningful number of people in front of these pieces of jewelry that are awkward and not easily accessible at a time when people are already nervous about biometrics and cryptocurrencies. WorldCoin says it has now scanned the eyes of 2 million people. How many are needed for this to be worthwhile? One billion?
These are valid questions. It’s about: Do you have a network of proven unique human beings? And it’s only going to be interesting for applications and enterprises at a certain scale. But I guess it would depend on the use case. By the time you get to 10 million unique users, there are already tons of applications that want to use it, while others aren’t going to be interested in using it until you get to 500 million or a billion or 2 Do not be on the network of Arab people.
Some of the other challenges here are yeah, obviously, orb distribution. Currently there are 200 to 300 [orbs] in the wild today, along with another 2,000 that have been built and are waiting to be deployed. Then there is the question of public perception. Ssomething that we’ve identified as part of the investment: is there going to be such a negative perception about how confident we are that it’s 100% viable, is the public perception going to be so negative that people won’t Want to participate?
So far the figures say otherwise. WorldCoin has already engaged nearly 2 million people by operating an on-the-ground strategy, and it is currently in beta testing. This is without pushing or pulling any levers on marketing; It is also live on the mainnet without the protocol. It is still in preliminary testing.
For something that could use this, Elon Musk has talked a lot about the bot problem on Twitter, and touted the idea that if we paid $8 a month, it would solve the bot problem. will help to solve. We think World ID is a low-friction way of solving the same problem and will be a high-fidelity solution. And there are many new applications and services that historically did not exist because of our inability to make this difference. What they are, I don’t know, but we are interested in funding them.
Again, you can hear more about the investment here, including why OpenAI itself could someday become a major customer of Worldcoin, why Bogart wasn’t bothered when hackers recently hacked several Worldcoin installed password-stealing malware on Orb operators’ devices, and why it’s fascinated by flash trades on the blockchain.
