This week, world coina company designed to serve as a proof of personality in a world where it’s becoming increasingly difficult to tell a human from a bot has raised $115 million in Series C funding.
Run by the 10 year old venture firm Blockchain Capitalwhose stakes have included Coinbase, Kraken and OpenSea, the investment brings Worldcoin’s funding to at least $240 million even if the controversial Founded in 2019 by OpenAI CEO Sam Altman, the organization still has a lot to prove.
Yesterday we spoke to Spencer Bogart, General Partner of Blockchain Capital, about what gave him confidence in Worldcoin, which aims to create a global ID, global currency and app that will enable payments, purchases and transfers. Like many others, we have wondered how it can achieve its goals when its primary mission, at least for now, is to convince tens of millions of people to allow Worldcoin to scan their irises using futuristic, technology-intensive 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. Did Khosla Ventures or Tiger Global, who were also previous contributors, help again?
You could be part of this funding; I don’t think they make up a big part of it.
What percentage of the company do investors own? I guess Sam Altman is difficult to deal with given the power he wields and also his extensive experience on the other side of the table as an investor.
That is a correct characterization. Sam is an excellent founder and knows how to manage a cap table. I apologize again. It’s not a character I have in front of me right now. Generally, companies sell 20% of it [equity] in any financing. Admittedly, it can go down or up significantly from there. I think in this case the figure will be significantly lower than the A series, B series and C series.
How long have you been talking to Worldcoin and what motivated you to lead this deal?
The original origin story was that Sam wondered: what if I could create a cryptocurrency that I could distribute to anyone in the world and everyone would get an equal share of it? For me, this is certainly interesting from a venture perspective [though] I don’t know if it’s something we’d be particularly excited about based on what our team is typically interested in.
[Meanwhile] This requires fundamentally ensuring that no single person can accumulate a disproportionate share of it, which requires people to be able to identify unique people. And here we come to the part we’re looking forward to: World ID. It is the ability to easily distinguish between machines and humans on the internet [because] Most of the internet is funded by advertising revenue and delivering bot traffic costs the same as delivering human traffic. Because of this, various applications and service providers have used CAPTCHAs to differentiate between bots and humans. But that’s no longer practical in a world of advanced automated systems and especially things based on AI. It also doesn’t discriminate between individual people, so I don’t know if the same person is overusing a resource
This leads us to the question: Okay, how can we differentiate between humans and bots and ensure that each human is unique?
Which leads to biometrics.
At the root of what makes us human is biometrics, and my first thought was: why build this custom hardware to scan eyeballs? Billions of people are already on the move with an iPhone. Why don’t we use Face ID, right? The problem is that human facial structures do not have enough randomness or entropy to distinguish between individuals on the scale of tens of millions or hundreds of millions of people.
I didn’t know that was the case.
It didn’t occur to me either. I didn’t think that once you hit 100 million, there will be a lot of people who look like Spencer Bogart; Your facial structures will be almost indistinguishable from mine. Fingerprints have the same problem; There is not enough randomness in fingerprints.
This leads us to two viable options: DNA that is sufficiently random to demonstrate human uniqueness on a billion-human scale. But you’re providing far too much information with DNA. Then there are irises. As it turns out, there’s an insane amount of entropy and randomness in the human iris. And in this case, the team built insane protection. You will get an iris scan. Your irises are not saved by default. It will be immediately deleted from the device. It is only used to create what is known as an iris code, which is a unique mapping or encoding of your iris. And it is compared to everyone else. And now, with these iris codes, we don’t know her name or her location or anything. The only thing we know about all of them is that they are unique people.
I suspect that a corporate strategy – helping companies reduce their interaction with bots – is the most lucrative opportunity for Worldcoin right now. They could also give this cryptocurrency to everyone, although I’m not sure how people would use it. But before any of that can happen, you need to get a significant number of people in front of these weird and inaccessible orbs when people are already nervous about biometrics and cryptocurrency. Worldcoin claims to have scanned the eyes of 2 million people. How many does it take for this to make sense? One billion?
Those are the right questions. It’s about: Do you have a network of demonstrably unique people? And that will only be interesting for applications and companies above a certain size. But I think it will depend on the use case. When you reach 10 million unique users, there are already a number of applications that want to take advantage of that, while others have no interest in taking advantage of it unless you’re on a network of 500 million or a billion or 2 billion people.
Of course, some of the other challenges here are ball distribution. It’s currently 200 to 300 [orbs] in the wild today, another 2,000 have been manufactured and awaiting use. Then there is the issue of public perception. SAs part of the investment, we pointed out that public perception will be so negative that no matter how much we believe it’s 100% viable, people won’t do it. Want to get involved?
So far, the data says otherwise. Worldcoin has already onboarded nearly 2 million people through a fairly capital-intensive “boots-on-the-ground” strategy, and this is currently in beta testing. This is done without using or pulling any marketing levers; This is done without the protocol being available on the mainnet at all. This is only the case in initial tests.
As for some of the things this could use, Elon Musk has been talking a lot on Twitter about a bot problem and touting the idea that if we got everyone to spend $8 im. that would help solve the bot problem month to pay. We believe that World ID presents a less frictionless way to solve the same problem and presents a higher fidelity solution. And there are a number of new applications and services that historically did not exist due to our inability to make that distinction. I don’t know what those are, but we’re interested in funding them.
Again, you can learn a lot more about the investment Hereincluding why OpenAI might one day become a major Worldcoin customer itself, why Bogart didn’t mind when hackers recently installed password-stealing malware on the devices of several Worldcoin orb operators, and why he’s fascinated by flash trades on the blockchain is.
