Worldcoin is the latest cryptocurrency to make waves among virtual currency enthusiasts.
Details are still shrouded in secrecy, but worldcoin is being touted as an altruistic project that is supported by some of the biggest names in Silicon Valley.
This article will explain:
- What worldcoin crypto is and how it works
- Whether cryptocurrencies are a good investment
- When you should cash in your cryptocurrencies
What is worldcoin?
Worldcoin is a new form of cryptocurrency that supports the idea of wealth and money being distributed more equally across the world.
There are many layers to worldcoin, but part of its USP appears to involve scanning eyeballs to construct a unique personal identifier.
According to Bloomberg, which first reported details about the project, worldcoin has designed a spherical device to scan people’s irises and thus stop fraudsters abusing the system by claiming multiple times.
But full details are still hazy as the currency still hasn’t been officially launched.
A message on worldcoin’s website simply invites people to get in touch via email to find out more.
How to buy worldcoin
Worldcoin has not officially launched, so it is not possible to buy it yet.
In June, Sam Altman, an investor in tech companies, said that “the worldcoin team will talk about the project when they’re ready. Hopefully not too much longer”.
Confusingly, there appears to be another cryptocurrency called worldcoin that has been trading since 2013. But the two projects are unrelated, despite sharing the same name.
Why should I buy worldcoin?
If you are intrigued by the concept of worldcoin, you are not alone. It has already attracted a number of high-profile investors including Reid Hoffman, the founder of social networking site LinkedIn.
Venture capital firm Andreessen Horowitz and the venture capital arm of crypto-exchange platform Coinbase are also thought to have backed the project.
However, you should consider the following points:
- It may appeal to cryptocurrency enthusiasts who are curious about a unique proposition coming to the market.
- It has the backing of some of the biggest names on the technology scene, which may inspire confidence among potential buyers.
- The concept of a currency that could benefit everyone, regardless of wealth, may appeal to those enthused by social change.
- The idea of sharing unique personal data through iris scanning will not sit easily with many people.
- Privacy advocates say passing over sensitive personal information to a tech company could leave people exposed to hackers.
- There is no detail on when the currency will actually launch, and the worldcoin website has limited information.
- There is already a cryptocurrency called worldcoin in operation, and that may well cause confusion among buyers.
Are crypto coins a good investment?
This is a very personal choice.
Digital currencies do not exist physically and are not for the most part used as a form of exchange to pay for goods or services. Rather, they are just bought and sold on the markets in search of a profit (and are prone to huge price swings).
But how they are used may be changing; the currencies are now starting to be accepted as a means of exchange by the likes of Visa and Mastercard.
So whether you think crypto is a good investment depends on:
- Your attitude to risk
- Whether you believe in alternatives to traditional forms of money
Supporters say new types of digital money will become a credible alternative to the current payments structure. This typically relies on the use of either cash or deposits held in commercial banks.
Critics, however, say people could end up investing in a totally worthless “coin” which could leave you losing all your money. New cryptocurrencies are being launched all the time but it is not clear how many will survive.
The space is also frequently targeted by fraudsters. Cryptocurrency itself is extremely difficult to hack. But cryptocurrency exchanges – where coins are bought and sold – are often targeted.
Find out more: 5 things you need to know about cryptocurrency
Frequently asked questions about worldcoin
Who owns worldcoin?
Worldcoin is being developed by Tools for Humanity, a technology company based in San Francisco.
The company has filed an application in the US to trademark the worldcoin name. The application states that it aims to provide a virtual currency for use by members of an online community via a global computer network.
How do I store worldcoin?
It is likely that worldcoin will be stored in the same way as other digital currencies – in a virtual wallet to which you can gain access through a website or online exchange.
Or you could use an “offline” wallet that works in a similar way to a hardware device and does not require an internet connection.
You will be given a complex “pass phrase” that identifies your wallet, and you will also have to set your own password.
Remember these details or you may never get access to your money again.
How far can the price of worldcoin rise?
There is no answer to this at present as the currency has not yet launched.
Other new virtual currencies such as dogecoin and safemoon have been performing well in recent months. But there is no guarantee that a cryptocurrency will take off and prosper in the long term.
Bitcoin, the original virtual currency, remains the most valuable. One bitcoin is currently worth about $31,000, but this price has more than halved since hitting a peak of $63,300 in April 2021.
How will worldcoin be created?
There is not yet any information on how worldcoin will be created, or “mined”.
But its founders may be mindful of the backlash against the traditional way of mining cryptocurrencies, which is very damaging to the environment.
The creation of digital coins requires a huge amount of computing power and most of this takes place in China. But that country is reliant on coal to generate electricity, and coal contributes substantially to air pollution and is the biggest source of climate change.
However, new cryptocurrencies are increasingly being launched with the environment in mind.
These make better use of renewable energy or find other ways to offset their carbon footprint.
When should I cash in my cryptocurrency?
This is a question that has no right or wrong answer.
Some people choose to hold their coins long-term, either because:
- They believe in the future of the product and want to support it
- They hope the value will soar at some point in the future
Others cash in their holdings once they reach a set profit target. They may reinvest the money in other cryptocurrencies, or put their gains towards living expenses and treats.
For example, this reader explains how she sold some of her bitcoin investments for $16,600 and spent the money on holidays and artwork.