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Sam Altman, the chief executive officer of OpenAI (the creator of ChatGPT), is introducing a cryptocurrency called Worldcoin. He has reportedly lined up $100 million from high-profile venture-capital investors, and he has already released a World App crypto wallet that can be downloaded to your mobile phone. Altman has big plans for Worldcoin as the first-ever cryptocurrency to be held by every person on the planet.
So what would this new crypto mean for Bitcoin (CRYPTO: BTC), currently the world’s most popular digital currency? After all, in more than a decade, Bitcoin has never fulfilled some of its earliest ambitions — such as replacing fiat currency or becoming a ubiquitous form of online payment. Could the rise of a new competitor force investors to rethink Bitcoin’s valuation?
What is Worldcoin?
Worldcoin is an ERC-20 token for the Ethereum (CRYPTO: ETH) blockchain. What this means in practical terms is that Worldcoin will look (and trade) much like the cryptocurrencies that investors are already familiar with. Some of the biggest cryptocurrencies by market cap are ERC-20 tokens, including Shiba Inu (CRYPTO: SHIB) and Uniswap (CRYPTO: UNI). So in this regard, Worldcoin is not breaking any new ground.
What makes Worldcoin stand out is the fact that it has aspirations to be both a cryptocurrency and a global identification system. With a tag line of “the global economy belongs to everyone,” Sam Altman plans to distribute Worldcoin tokens to every single human on planet Earth.
Image source: Getty Images.
And this is where things get a little bit, well, creepy. To pick up your free Worldcoin crypto token and sign up for a Worldcoin ID, you will need to give Sam Altman a scan of your eyeballs. That’s right — Worldcoin has created a proprietary iris-scanning tool known as the Orb. Once you’ve had your eyeballs scanned with the Orb, you’re good to go. According to Altman, this step is necessary to verify that you are a real human and is not meant to be an invasion of your privacy. He won’t even ask you for your name.
However, it’s easy to see how some people on YouTube are going to have a field day with Worldcoin. The launch of this cryptocurrency sounds like the plot of a dystopian sci-fi film: The creator of the world’s most powerful AI system has created a digital ID tracking system for all humans on earth and is now requiring that digital ID to invest in crypto. Already, one Ethereum developer has called Worldcoin “unrealistic and scary.”
Worldcoin vs. Bitcoin
That said, Worldcoin has at least two advantages over Bitcoin. One, of course, is superior technology. Bitcoin is still using proof-of-work blockchain technology from 2009 that requires mining and energy-hungry computer-driven mining systems. Worldcoin, on the other hand, uses the latest proof-of-stake technology from Ethereum, as well as technology from different Layer 2 scaling solutions for Ethereum. According to Worldcoin, “gas-free” transactions — meaning free — will become the norm. In layman’s terms, there will be no transaction fees of any kind when you move around your Worldcoin.
Worldcoin also seems poised for much faster uptake than Bitcoin. More than 1.7 million people around the globe, for example, have already registered with Worldcoin. Contrast that with Bitcoin, which took nearly 14 years to get to 1 million unique wallet addresses holding 1 bitcoin or more.
And don’t forget that Sam Altman has some ChatGPT magic dust he can sprinkle on top of Worldcoin. ChatGPT skyrocketed to 1 million users in just five days, which could explain why investors are willing to give Sam Altman $100 million for this new crypto project. He knows how to scale quickly. Just imagine the cross-promotion opportunities! What if every time you used ChatGPT, you saw a friendly reminder to sign up for Worldcoin? Or if the only way to pay for a premium ChatGPT subscription was via Worldcoin?
How to value Bitcoin?
At the end of the day, though, Worldcoin’s plans for global expansion seem a bit too grandiose. Altman, for example, wants to get to 1 billion users in two years. But the Earth’s population is 8 billion people now, so the ultimate goal of getting Worldcoin into the hands of every single person on Earth seems impractical at best. So I really don’t think Bitcoin has anything to worry about for now.
However, if Worldcoin does gain early traction, that’s when we will need to have a serious discussion about Bitcoin’s future valuation. Many of the most optimistic price predictions for Bitcoin — such as $1 million per coin — are based on the fundamental notion that Bitcoin will continue to chip away at the world’s financial system. From my perspective, Worldcoin (by virtue of being free) has the best chance of any altcoin to replace Bitcoin in poor and developing markets.
For now, I’m putting Worldcoin on my watchlist. The crypto is a fascinating project from the founder of ChatGPT, so it can’t be dismissed entirely. But that doesn’t mean I’m selling my Bitcoin. I can’t think of any other crypto I’d rather be holding, even if the AI overlords eventually take over.
Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Uniswap Protocol Token. The Motley Fool has a disclosure policy.
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