So, my understanding of the current play in this space is as follows:
- Create a large number of worthless cryptographic tokens.
- Distribute around half of them as "freebies".
- Keep the other half to yourself / distribute them among your investors.
- Start a hype by injecting your investors money into your currency.
- Hope that people will start to trade/speculate with your currency, buying it for real monies.
- As the trading volume ramps up, start extracting money from the system by exchanging your tokens for real monies.
- Profit!
Is this about right? I mean it's quite ingenious as you seem to create money out of thin air, but I really can't wrap my head around how this isn't outlawed as an MLM scheme by governments.
- Create a large number of worthless C-corp shares for a company with zero revenue
- Distribute 100% to the founders
- Onboard new investors through a series of progressively higher valuations, diluting less and less with each subsequent round
- Go public at a lofty, inflated valuation that leaves retail with little to zero chance at producing the 100x gains that early investors got to experience
- Profit!
Money is simply a representation of value. If you can create value out of "thin air", or even the perception of value out of thin air, then you can make a profit. That much has always been true.
What gives the C-Corp shares value, particularly the ones that trade at very high P/E ratios? Speculation on future growth, speculation on potential dividends, speculation on favorable market conditions, speculation on quantitative easing bringing yet more trillions flowing into stock market, etc.
What's interesting to me, is that people think our US Federal Reserve fiat monetary system is not an MLM scheme in the same way. We know who profits from the existing system: the older participants who got in early. We know who's been totally screwed by the current system: millennials and Gen Zers who can't afford housing, saddled with debt, living with their parents in their 30s:
Your definition of a business might be a “an organization that produces a product”, but that is not the legal definition. A business can even legally be a bundle of paperwork that owns someone’s nice car.
In the rare case that a business actually produces nothing, in bad faith, we call that a scam, and fraud, and people go to jail. The same standard does not exist for "tokens".
1) There are literally millions of empty and bad-faith businesses that you never hear about because they successfully fly under the radar
2) People definitely (though, to your point: not the general public yet) call out some tokens as being scams. It’s much more of a “wild west” (aka: lots of dirty business going on that no one knows how to identify much less stop), but people in the space can pretty easily tell if a token has integrity or not. Look at Beeple, for example. I think most people who read the story would agree he’s not scamming.
The government always plays catchup on these things, and now is a less than pristine time for financial supervision.
This seems to be the way this has always operated right the way back to Bitcoin - distribute tokens, and fund a market to provide initial "liquidity" until enough people are using it to maintain some semblance of value.
Fundamentally, the definition of money is a token of exchange that people are willing to use. What preferences one form of money over others is the government allowing/requiring tax payments in it. (Which presumably is now the case for bitcoin in El Salvador at least.) The easiest way to succeed at this is to provide funds to create a market - with the proviso that as more and more currencies get created, the "supply" part of the equation gets a bit out of hand. Something very similar happened with the 1840´s libertarian banking experiments in the US.
Governments ultimately execute the wishes and wants of citizens at large, and voters have collectively given a resounding yea to get-rich-fast crypto lotteries.
> Governments ultimately execute the wishes and wants of citizens at large
Not really; no (even theoretically democratic) has a flat distribution of citizen political power for that to be true in general; it is true in cases where the general opinion happens to be in line with elite opinion, or so strong as to overcome the power inequalities, but otherwise governments act according to elite opinion, not general popular will.
Well i took from your reply that you challenged the notion that citizens have _not_ wanted the get-rich-quick crypto jazz.
I wasn't saying that chargebacks don't exist. I was saying that the government dictating that you cannot lose all your money in a foolish endeavor would, in some parts be seen as infringing on your "freedoms".
Force safety nets was the discussion, as i took it. And some countries are resoundingly against forced safety nets.
Talking about the US specifically, the question comes down to infringing on liberties versus stopping scam behavior.
Everybody agreed it was a good thing when the Fed shut down several scam colleges and forcibly discharged all the debt students had taken on. People aren't really meant to evaluate whether colleges are "real".
On the other hand, gambling laws tend to be contested. Gambling is regulated - most Casinos don't cheat but may have unfair odds. People who support gambling argue that adults can make unwise decisions so long as we can assure Casinos are honest and post odds.
The alternative view re gambling is that gambling rewards part of the human brain that we are bad at regulating and the government should step in and prevent even "honest" gambling.
Both of those takes on gambling have merits. If you oppose gambling because it's unethical, would it be ok to ban people who collect trading cards at insane prices hoping to resell them? Likewise if you support gambling, don't you have to admit it's brought many to financial and family ruin?
The question re crypto is whether crypto is more like gambling or more like a scammy college. My position is that crypto is a scam, not an honest casino.
> I was saying that the government dictating that you cannot lose all your money in a foolish endeavor would, in some parts be seen as infringing on your "freedoms".
I mean, some people might think that, but every functioning state in the world has laws against fraud, at the very least, and generally various investor safeguarding laws beyond that.
To be fair, Keeping a lot of stock for yourself and self-promotion is also how successful startup founders make money.
The pump and dump aspect is that the reasons given why anyone should value the token are flimsy. If they were solid then it would just be a good investment.
There is a mechanic at the heart of investment that, purified of anything resembling social worth, becomes a gambling game that people can play for fun, despite knowing that it has no other value.
It's always marketing, on the missing dots in this kind of list. Otherwise people don't know where they can buy whatever it is you are selling. Underpants, apparently, in this case.
It seems to me that there are some not-uncommon diseases that could affect this, e.g. if someone develops macular degeneration, do they lose their savings? Or can they double their coin share?
What is the state of the science behind retinal-imaging-as-authentication? Are these patterns truly known to be stable over the course of a person's life?
Unfortunately, they have painfully admitted that they are not joking and they're serious about this ponzi scheme.
So now one of the creative ways of building an exit scam also involves having 1984 as a business model, even worse than the majority of cryptocurrencies out there.
I'm totally sure we should just take their word for it, on some magic network connected eyeball scanning apparatus developed by the cryptocoin industry.
As-if you can ever actually hash a biometric and expect it to match in the future. The whole idea of a hash is that a tiny perturbation makes the output completely different.
It almost by definition cannot work for biometrics.
> Touch ID doesn't store any images of your fingerprint, and instead relies only on a mathematical representation. It isn't possible for someone to reverse engineer your actual fingerprint image from this stored data.
Sure, I think there are a million attack vectors for getting these "orbs" to send the same person money multiple times. Crafting a face that doesn't generate a hash collision (which would be the goal here) is probably an even easier problem!
I'm just pointing out that perceptual hashes do exist.
> The whole idea of a hash is that a tiny perturbation makes the output completely different.
That would be a cryptographic hash you are describing. Not all hash functions share that property. As long as arbitrary input is mapped to a fixed size output it is a hash function. For example see NeuralHash [1] which is a hash function designed to be "insensitive to small changes in the input image."
> We are only a few months away from a global launch and we are running field tests in many locations around the world. In these field tests, people are waiting hours to receive their free share of Worldcoin [...].
Using dark patterns like artificially limiting supply before the product is even released to create an illusion of demand pretty much says everything you need to know about this. There are no interesting new concepts here, except that in addition to being yet another bogus coin, you're also expected to give up your biometric data.
I think the overarching idea here makes sense, but the devil is in the details.
1) It's going to be difficult to ensure that the 'Orb' device can't be hacked and allow bad actors to send a bunch of random codes to signup for a Worldcoin.
2) If there are bogus signups how do you deal with reconciliation when there are ID collisions?
3) It's going to take many years for this to get a critical traction and to deploy coins to individuals.
4) The value of this coin will be extremely small when it's divided amongst the world's population. Assuming it's spent shortly after it is received, this money will just flow back to the owner's of capital anyways.
Their "how it works" page has a whole section dedicated to your first question:
> Spoofing attacks involve presenting the Orb with modified, fake, or non-human irises. For example, an attacker might show the Orb a photo of an iris or an animal iris, hoping to generate a unique IrisHash. To defend against attacks like this, we’ve equipped the Orb with a suite of multi-spectral sensors and custom fraud-detection algorithms. This advanced anti-spoofing system complements the iris imaging system, and operates locally on each device.
> The Orb is also resilient to various forms of tampering, including attempts to modify its software, extract its cryptographic secrets, or disable its anti-spoofing system. This resilience is critical, since any of these intrusions might allow a hacker to generate fraudulent IrisHashes. The Orb’s embedded systems reliably detect advanced attacks of this kind, and prevent corresponding fraud.
> To further increase the difficulty of an attack, Orbs will be remotely monitored and compared to other Orbs. Such monitoring is based on non-biometric metadata from the Orb, including battery level, temperature, and network strength. Anomalies will be flagged and lead to Orbs being deactivated. This anomaly detection happens in a controlled environment in the cloud and therefore comes with higher security guarantees than device-level spoof and tamper detection.
> The Orb is also resilient to various forms of tampering, including attempts to modify its software, extract its cryptographic secrets, or disable its anti-spoofing system. This resilience is critical, since any of these intrusions might allow a hacker to generate fraudulent IrisHashes. The Orb’s embedded systems reliably detect advanced attacks of this kind, and prevent corresponding fraud.
Doubt. In the end this is a device collecting signals, signing them cryptographically, and sending them to the cloud. If there's an economic incentive someone will find a way to get it to sign fake signals.
There's also the centralization issue, where the manufacturer of these orbs essentially has total control over producing the currency.
The vision here is a first step toward a global UBI. If you're going to give everyone an income, you first need to know that each account is a real person. That's essential.
So this is a way to get there. I'm sure it will have glitches and hitches. That's fine, this is how you work it all out, by taking practical real-world actions.
The vision here is huge. Ultimately a complete transition of the global economy.
Will it get there? No idea. But I'm very, very excited to see someone working on it.
The thing about these "drops" is people will liquidate them into real currency as quickly as possible. If the goal is to distribute a currency to as many people as possible (so everyone has a piece of the currency to use) then you have to remove any possible off ramps. But, then you run into the problem of nobody _actually_ being interested in the coin since it has "no real value" (can't trade it for USD)
They don't solve the proof-of-humanness problem via biometrics, it's more of a web-of-trust kind of thing. Probably also broken as hell, but this is a hard problem being solved in new ways so that's expected.
What stops an Orb Operator from just opening up the Orb and publishing random hashes? Assuming that "privacy is preserved" and the hash can't be turned back into an iris, there should be no way to tell.
I also had a similar coin/currency idea to share with every human equally, but could not come with a good plan to distribute it, besides after carefully thinking this would not be truly necessary, because if people are free, productive ones will quickly make money, even if they start with zero. A bigger problem might be land and other world resources that are not currently being equally distributed.
Just let people mint it from thin air but make sure all minting is traceable on the block chain.
This will obviously create immense inflation, but since everyone is capable of just inflating their own holdings to match it's perfectly fair and the relative value of individual holdings should stay fairly constant.
How you actually price goods using this currency is left as an exercise for the reader.
So they say it’s about UBI, but… what’s wrong with the ways we establish human-ness now?
Usually it’s a combination of national ids, photo ids (also a kind of biometric) and respected persons like doctors or licensed engineers attesting you exist. No one method is dominant, which has its privacy benefits.
The eyeball scan, plus the cryptoasset incentive, seems like a strategy that could place this company as a very dominant broker of human-ness. Regardless of whether WorldCoin becomes a useful financial token.
2. What’s even good about the Orb versus something more boring
So the orb bootstraps a user into having a private key. So I have all the same privacy difficulties of managing my own key, don’t I? It’s not like I can pay for things with my eyeball.
So if we have special licensed operators, with controlled hardware, why not generate a key randomly with that hardware?
Presumably they have provisions for transitioning you to new keys when your iris changes, so… if that is done by a controlled hardware and a licensed orb franchise, why not just use regular national or photo ID methods, sign that data with the Orb-station’s private key, and we’re done?
Let me guess: Nobody has access to the data because it is encrypted from literally everyone so there will never be any conflicts of interest ever, right?
There have been studies which start with giving everyone the same amount of money, and then simulating random transactions. In a very short amount of time, one person ends up with 95% of the money.
When it is run different times, a different random person ends up being the one rich person. But it never ends up with everyone having about the same amount of money.
Sorry for the meta post, but it's quite funny how HN's legendary skepticism towards cryptocurrency manages to get even Sam Altman's project flagged on his own (former) board.
Start working on a way to print uniquely patterned contact lenses now, to be ready at launch. Even thisisnotaniris.com is still up for grabs, have fun with your infinite number of tokens!
