What is Worldcoin, and How Does It Work?

Worldcoin has become a major topic in crypto this year. The project allows users to prove they are real humans online without compromising their privacy. As AI, deepfakes, and bots grow, this challenge is getting more important.

The project is backed by OpenAI CEO Sam Altman. It uses a biometric ID system called World ID and has a native WLD token. The idea may seem futuristic, but millions have already signed up, and interest is rising in the US and beyond.

What Is Worldcoin?

Worldcoin launched in 2023 with a clear goal: to build a global identity system that shows a person is human and not an AI bot. This idea, called Proof of Personhood, sits at the center of the project. It makes sense in today’s digital world, but it also leads to discussions about how much technology should be involved in proving identity.

The team behind Worldcoin believes that passwords, phone numbers, and government IDs are becoming less reliable or not available everywhere. Many places do not have strong identification systems, and the rise of generative AI has made it harder to trust online interactions. Worldcoin wants to create a cryptographic identity that proves someone is unique without revealing their personal details.

How Does Worldcoin Work?

The Orb plays a key role in how Worldcoin works. It's a specialized biometric device designed to scan a person’s iris and create a code called an IrisCode. This code is saved as a cryptographic hash that checks if someone has already signed up. The goal is to keep biometric data secure, even though the approach has mixed reactions.

Worldcoin verification begins with the World App, which creates two private keys: one for your World ID and another for managing WLD tokens. These keys stay on your device and are separate from the Orb, keeping your wallet activity and biometric data apart.

When you scan your iris with the Orb, it checks the IrisCode against a database. If it is too similar to an existing code, registration is blocked. If it is unique, you get a verified World ID linked to a public key on Ethereum. The Orb deletes the original images automatically unless you choose to keep them.

Zero-knowledge proofs help protect privacy by confirming information without showing the data itself. This lets you verify your identity online without revealing personal details, as a password manager does.

Worldcoin’s Tokenomics

Worldcoin has a native token, WLD, that is an ERC-20 token on Ethereum, mostly running through Optimism’s Layer-2 network. The total supply is 10 billion, with about 2.02 billion in circulation. Distribution gives 75% to users and the ecosystem and 25% to investors and developers. After 2038, governance may allow up to 1.5% yearly inflation, though it is 0% now.

Verified users receive WLD token grants. These grants help attract new participants and introduce them to digital finance. The average reward is around 42 dollars, but the amount decreases slowly over time.

WLD also has a governance role in the Worldcoin ecosystem. Holders can take part in proposals and decision-making, using the “one-person-one-vote” method supported by World ID verification. This system combines decentralized participation with protection against fake or duplicate accounts, allowing users to influence the project’s direction while keeping governance secure and fair.

The Potential of Worldcoin

Worldcoin combines identity verification and digital payments, giving it more uses than many other tokens. Developers are testing applications like bot-resistant communities, secure voting systems, and fintech products that use World ID. The network could also support universal basic income trials, sending WLD to verified users regularly.

At the same time, critics, including Vitalik Buterin, raise concerns about privacy, centralization, and government-mandated enrollment. Some doubt that biometric verification can stay safe at scale. These issues often appear in debates about surveillance, governance, and biometric ethics.

Whether it becomes a key tool for digital identity or remains an experiment will depend on adoption, governance, and how the community handles challenges. Right now, it is one of the most-watched projects in crypto.