Sam Altman, CEO of OpenAI, the startup behind the AI chatbot ChatGPT, is reportedly finalizing a funding round worth approximately $100 million for his ambitious project, Worldcoin. The initiative aims to develop a secure global cryptocurrency using iris-scanning technology. This potential injection of capital comes as a ray of hope in a crypto market that has faced significant challenges over the past year.
Worldcoin is engaged in ‘advanced discussions’ with both existing and new investors to raise $100 million in the latest funding round, Financial Times reported citing sources familiar with the matter.
AlexaBlockchain reached out to Worldcoin regarding the ongoing fundraising activities, but did not receive any comments.
Notable investors in the Worldcoin include Digital Currency Group, Hypersphere Ventures, Hashed, Kinetic Capital, Multicoin Capital, Three Arrows Capital, Khosla Ventures, Andreessen Horowitz’s crypto fund, FTX founder Sam Bankman-Fried, Variant Fund Co-Founder and General Partner Jesse Walden, Internet entrepreneur Reid Hoffman.
Worldcoin – A combination of cryptocurrency and global identification system
Founded by Altman and Alex Blania in 2019, Worldcoin has operated with relatively low visibility compared to its sister company, OpenAI, which recently secured a lucrative multibillion-dollar deal with Microsoft. However, it recently announced some major developments, including the release of the World App crypto wallet and a new partnership with Optimism Collective.
Worldcoin, an ERC-20 token built on the Ethereum blockchain, brings familiarity to investors in the world of cryptocurrencies. Just like other popular cryptocurrencies such as Tether (USDT) and Binance Coin (BNB), Worldcoin will operate and trade in a similar manner.
However, what sets Worldcoin apart is its ambitious vision of being more than just a cryptocurrency. It aims to establish itself as a global digital identification system, going beyond the traditional boundaries of digital currencies.
Sam Altman, the driving force behind Worldcoin, envisions a world where “the global economy belongs to everyone.” In pursuit of this goal, Altman plans to distribute Worldcoin tokens to every individual on Earth.
The project plans to employ iris-scanning technology to establish a global identification system, enabling users to access their own global currency, Worldcoin, free of charge.
Why Investors Are Backing Worldcoin?
Worldcoin, as a cryptocurrency, may not appear to offer any significant advantages over established cryptocurrencies like Bitcoin or others. So why are investors placing a $100 million bet on Worldcoin? Primarily because of their trust and confidence in Sam Altman, the driving force behind the project.
Altman’s track record and contributions to the tech industry, entrepreneurship, AI, and cryptocurrency have earned him a reputation as a visionary and successful leader. His ability to scale quickly is evident from the rapid rise of ChatGPT, which attracted 1 million users within just five days, and 100 million in just 2 months – making it the fastest-growing consumer application in history. This demonstrates Altman’s knack for capturing the attention and interest of a large user base.
With Worldcoin, Altman’s influence and reputation play a crucial role in attracting investors. They see his involvement as an assurance of potential success and growth. Additionally, the fact that over 1.7 million individuals worldwide have already registered with Worldcoin indicates a significant level of interest and early adoption.
Investors recognize Altman’s ability to navigate and capitalize on emerging technologies and trends. They believe that his expertise and strategic approach will give Worldcoin an edge in the competitive cryptocurrency market. While Worldcoin may not offer groundbreaking features, the confidence in Altman and the existing user base provide a solid foundation for investors to place their bets on the project’s potential success.
Worldcoin is valued at $3 billion
According to the Information, a tech-focused publication, Worldcoin’s tokens were valued at $3 billion following a $100 million token sale in early 2022. However, the past year has proven challenging for crypto tokens and projects alike. The collapse of FTX, the cryptocurrency exchange founded by Sam Bankman-Fried, triggered a significant decline in token prices and contributed to the failure of numerous crypto companies.
Bankman-Fried’s FTX had received backing from renowned venture capital fund Sequoia Capital, Tiger Global Management led by Chase Coleman, and Thoma Bravo. The exchange’s downfall, coupled with the subsequent scandal involving Bankman-Fried, led many prominent funds to curtail their investments in the crypto sector.
Given the current bear market and the broader crypto winter, securing substantial investment for a project within this space is seen as remarkable, according to insiders familiar with the fundraising efforts.
Worldcoin’s executives argue that their approach addresses two critical concerns stemming from the advancing capabilities of artificial intelligence: distinguishing between humans and bots and providing a form of universal basic income to offset potential job losses caused by AI.
Central to the company’s plans is an orb that utilizes iris biometrics to establish an individual’s unique identity. This process creates a digital World ID that users can employ pseudonymously in various everyday applications without revealing their true identities, the company claims. Once users have established their identity, they can receive Worldcoin tokens free of charge.
Despite Worldcoin’s ambitious vision, the project has faced criticism on several fronts, particularly regarding privacy risks associated with biometric scanning. In response, the company has dedicated a section of its website to address concerns about the orb, asserting that it will not store iris scans and that the device will not harm users’ eyes.
After conducting beta testing, Worldcoin is currently in the process of finalizing its blockchain protocol and is set to start recording transactions in the coming six weeks.