This week, World Currencyan outfit that aims to serve as proof of personality in a world where it’s harder to tell a human from a bot every day, raised $115 million in Series C funding.
Led by the 10-year-old venture capital firm blockchain capitalwhose bets have included Coinbase, Kraken and OpenSea, the investment brings Worldcoin funding to at least $240 million, even as the controversial The organization – founded in 2019 by OpenAI CEO Sam Altman – has a lot to prove.
Yesterday, we spoke with Spencer Bogart, General Partner of Blockchain Capital, about what gave him confidence in Worldcoin, which aims to create a global identifier, global currency, and app that enables payment, purchases, and transfers. Like many others, we have wondered how he can achieve his goals when, for the moment at least, his mission rests above all on the belief of tens of millions of people to allow Worldcoin to scan their irises. help of futuristic and tech-rich globes.
Below is a portion of that conversation, edited for length. You can also hear the longer conversation here.
Your co-investors in this new round include former backer Andreessen Horowitz, Bain Capital Crypto, and Distributed Global. Have Khosla Ventures or Tiger Global, which are also former backers, rebuilt?
They could be part of that funding; I don’t believe they are a big part of it.
How much of the business do investors own? I guess it’s hard to negotiate with Sam Altman given the power he wields and also his vast experience on the other side of the table as an investor.
This is a correct characterization. Sam is a formidable founder and knows how to manage a cap table. Again, I apologize. It’s not a number I have in front of me right now. Typically, companies sell 20% of the [equity] in each funding. Granted, things can go down or up significantly. I think in this case the number will be significantly lower than Series A, Series B and Series C.
How long have you been talking to Worldcoin and what motivated you to pursue this business?
The original genesis was Sam wondering: what if I could create a cryptocurrency that I could distribute to everyone in the world and everyone would have an equal share? For me, from a business point of view, it is certainly interesting [though] I don’t know if that’s something we’d be very happy to go underwrite based on things that our team is generally interested in.
[Meanwhile] this essentially requires ensuring that no one person can accumulate a disproportionate share of it, which requires people to be able to identify unique human beings. And that really gets into the part that excites us, which is World ID. It is this ability to easily distinguish machines from humans on the Internet [because] most of the internet is funded by ad revenue and it costs as much to serve bot traffic as it does to serve human traffic. This is why various app and service providers have used CAPTCHAs to distinguish between bots and humans. But that’s no longer viable in a world of advanced automated systems and especially things powered by AI. It also doesn’t distinguish between unique humans, so I don’t know if the same person comes to overconsume a resource
This brings us to: okay, how can we provide a way to distinguish between humans and bots and ensure that each human is unique?
What leads to biometrics.
The root of what defines humans is biometrics, and my first thought was, why create this custom hardware to scan eyeballs? For example, billions of people are already walking around with an iPhone. Why don’t we use Face ID, right? The problem is that human facial structures don’t have enough randomness or entropy to distinguish between unique humans, on the scale of tens of millions or hundreds of millions.
I didn’t realize that was the case.
It’s not something that crossed my mind either. I hadn’t thought about the fact that once you get past a hundred million people, there will be a lot of people who look like Spencer Bogart; their facial structures are going to be sufficiently indistinguishable from mine. Fingerprints have the same problem; there is not enough randomness in fingerprints.
This brings us to two viable options, DNA random enough to be able to prove human uniqueness on the scale of billions of people. But you provide way too much information with DNA. Then there are the irises. It turns out there’s an insane amount of entropy and randomness in the human iris. And in this case, the team has built insane protection. You get an iris scan, it does not store your default iris. It is immediately deleted from the device. It is only used to create what is called an iris code, which is a unique mapping or coding of your iris. And it is compared to all the others. And now, with these iris codes, we don’t know their name or their location or anything. The one thing we know about all of them is that they are unique human beings.
I guess a business strategy – helping companies reduce their interaction with bots – is the most lucrative opportunity right now for Worldcoin. You can also provide this cryptocurrency to anyone, although I don’t know how people would use it. But before any of that happens, you need to get a significant number of people in front of those weird, hard-to-reach orbs, when people are already nervous about biometrics and cryptocurrency. Worldcoin says it has now scanned the eyes of 2 million people. How many does it take for it to become meaningful? One billion?
These are the right questions. It’s about: do you have a network of unique humans? And it will be interesting only for applications and enterprises of a certain scale. But I think it will depend on the use case. By the time you hit 10 million unique users, there’s already a range of apps that would love to use it, while others won’t be interested in using it unless you’re on a network of 500 million or a billion or 2 billion people.
Some of the other challenges here are yes, obviously, orb distribution. There are currently 200 to 300 [orbs] in the wild today, along with 2,000 more that have been manufactured and await deployment. Then there is this matter of public perception. SOne thing that we’ve flagged as part of the investment is, will there be such a negative perception of this that no matter how confident we are that this is 100% viable, the public perception will it be so negative that people won’t want to participate?
So far, the data says otherwise. Worldcoin has already onboarded almost 2 million people by applying a capital-intensive field start-up strategy, and it is only in the beta testing phase. This without pushing or pulling any leverage on marketing; it is without having the protocol even live on the mainnet. This is only in the initial tests.
As for some of the things that could use it, Elon Musk talked a lot about a bot problem on Twitter and touted the idea that if we made everyone pay $8 a month it would help solve the bot problem. We believe that World ID is a less restrictive way to solve the same problem and will be a more faithful solution. And there are a range of new apps and services that didn’t exist because of our historical failure to make that distinction. I don’t know what it is, but we want to fund them.
Again, you can learn a lot more about investing hereincluding why OpenAI might itself become a major Worldcoin customer one day, why Bogart wasn’t bothered when hackers recently installed password stealing malware on the devices of several Worldcoin orb operators, and why he is fascinated by flash transactions on the blockchain.
