Polkadot Ecological Worldcoin? Encointer project analysis

On July 24th, Worldcoin was officially launched, which once again attracted a lot of attention and controversy.

Worldcoin is another Web3 project founded by OpenAI CEO Sam Altman, which identifies users by scanning their irises and builds a digital identity and Crypto network.

Worldcoin's iris-scanning device Orb deployed in Hong Kong

Worldcoin's vision is to make the opportunities of the global economy accessible to everyone in the world, no matter what country or background they come from. Everyone can get a certain amount of WLD coins as long as they scan their eyes once with Worldcoin's spherical scanner "Orb" and prove that they are a real person.

There is also such a project in the Polkadot ecosystem, called Encointer.

Similar to Worldcoin, Encointer also aims to provide a fairer and more inclusive economic system for people around the world, and both provide users with UBI (Basic Income). Encointer enables any community to create and distribute its own local currency to facilitate local economic activity and verify users' identities as real people through offline meetups.

This article will compare Worldcoin and Encointer to help you understand how the two work, and what are the similarities and differences.

Vision & Realization Method

Founded in 2019, Worldcoin's vision is to build the world's largest human identity and financial network, providing everyone with ownership. Enabling everyone in the world to share in the opportunities of global economic development, no matter what country or background they come from.

Worldcoin believes that with the advent of the era of artificial intelligence, we need a means to distinguish real people from artificial intelligence on the Internet, and everyone should have their own digital identity and wealth. Therefore, Worldcoin aims to build a global, fair, and inclusive open source financial agreement, and create a collectively owned global currency WLD, which will be distributed fairly to as many people as possible.

Encointer was also founded in 2019 with the vision of enabling communities around the world to generate their own autonomous currencies and use it to stimulate local economies. Each community currency has its own unique symbol and name, as well as its own determined issuance and distribution cycle. Each community currency forms value based on local supply and demand, independent of external macroeconomic factors.

Encointer believes that economically backward areas often lack growth momentum. Although everyone has skills and products to sell, they do not have enough purchasing power to buy from others. Encointer provides a free, easy-to-use technology that allows any community to generate its own currency, which is distributed equally to all active participants on a regular basis, thereby boosting local economic activity.

Mode of operation

Both use a similar "three-piece suit" - DID + protocol (token) + wallet.

Worldcoin is mainly composed of three parts:

World ID: A digital identity system based on iris scanning, which can provide everyone with a unique and difficult-to-forge identity. Users can scan their irises with Orb, a spherical scanner developed by Worldcoin, to generate a World ID.

Worldcoin: An encrypted currency protocol based on Ethereum's Layer 2 (Layer 2) technology. Worldcoin adopts a distribution mechanism similar to Basic Income (UBI), that is, a certain number of Worldcoin Tokens (WLD) are distributed to all users who have passed World ID verification on an average basis on a regular basis. Users can use WLD to trade or invest, and can also be exchanged for other fiat currencies or cryptocurrencies.

World App: A mobile application compatible with World ID and Worldcoin protocol, which allows users to manage their own digital identity and property. Users can register and participate in iris scanning verification through the World App, obtain WLD tokens, and conduct transactions or transfers with other users.

Encointer is also mainly composed of three parts:

Encointer Identity System: A system that verifies human identity based on Ceremony, which prevents anyone from obtaining additional income through multiple identities or robots. A meet-and-greet is a regularly scheduled social event that requires each participant to meet and communicate with three other strangers. In this way, each participant can prove that he is a real human being who is actively participating in the life of the community.

Encointer Protocol: An encryption currency protocol developed based on the Substrate framework, allowing any community to create its own independent and customizable currency. Each community currency has its own unique symbol and name, as well as its own determined issuance and distribution cycle. Each community currency forms value based on local supply and demand, independent of external macroeconomic factors.

Encointer App: A mobile application compatible with the Encointer protocol and identity system that allows users to easily create or join a community currency, and participate in physical meetups and receive the currency allocated to them. Users can also view and manage their own coins through the Encointer App, and invite friends to join and endorse their identities.

How to verify user identity

For any operation that involves "throwing coins" to users, one of the difficulties is how to verify that the user is a real person and prevent "sybil attacks" where one person controls multiple accounts.

The verification method used by Worldcoin is iris scanning. The iris is a unique and non-changeable biological characteristic of each person. It is more difficult to forge than information such as a face. Therefore, users can prove that they are real through the iris, without the need to prove their identity through the identity card issued by the country.

Iris collection is not a common way of authentication. For this reason, Worldcoin has specially developed a special device "Orb" to scan the iris. Worldcoin will recruit local operators in each region, and provide Orb equipment, allowing operators to carry out "ground push", popularize science and complete scanning to local users.

However, the collection of iris information as biometric information is obviously more sensitive, which has also brought a lot of controversy and promotion difficulties to Worldcoin.

In Worldcoin's original plan, after the eye image is collected, a unique identifier IrisHash will be generated through hashing, and then the eye image will be permanently deleted, and the Semaphore zero-knowledge proof system will be used to enhance privacy protection. But in order to optimize the data algorithm that generates unique identifiers, the team still built an iris database for users who did not raise objections. Although the team will delete all iris data after the algorithm optimization is completed, it has not proposed a specific deletion time. If the biometric information is stolen, it may cause violations of user privacy.

In addition, some countries have express regulations on how commercial companies use private data, and do not allow the transfer of biological information of their citizens abroad. Worldcoin's data processing agencies are located in countries such as the United States, the United Kingdom, Germany, Japan, and India. According to a Bloomberg report last year, Worldcoin has suspended operations in at least seven countries.

If Worldcoin uses eyes to verify that you are a real person, Encointer uses feet to verify. Encointer also uses a novel verification method - attend physical meeting (Ceremony).

A meet-and-greet is a regularly scheduled social event that requires each participant to meet and communicate with three other strangers. In this way, each participant can prove that he or she is a real person who exists and actively participates in the life of the community.

After users download the Encointer app, each Encointer community participant is randomly assigned to a small brick-and-mortar meetup that takes place periodically at a randomly selected location locally. When the event begins, each participant will scan the QR codes of other participants to confirm their attendance, and these proofs will be recorded on the highly secure Kusama blockchain ledger. Since all Encointer meetups are held simultaneously, it is impossible to attend more than one event per cycle (as a person cannot be in more than one place at the same time). In this way, it is guaranteed that one person cannot control multiple Encointer accounts.

This verification method also does not require users to provide identity documents issued by any country or institution, which makes Encointer open and inclusive to people without formal identity certificates.

Compared with Worldcoin, Encointer's verification method does not collect the user's biological information, nor does it require any centralized organization or third party to review or store the user's identity information, ensuring the user's privacy and autonomy. And no special scanning equipment is required, users can register anywhere in the world as long as they have a smartphone. Regular gatherings are also conducive to strengthening the connection between community members and enhancing community cohesion.

However, it is still a bit cumbersome to authenticate through real people attending the event (it is not very friendly to the society), and the number of participants in each offline event is limited by the venue, etc. Generally, there are not many people, which makes Encointer more suitable for doing Relatively small range of local currencies.

Development Status

Worldcoin had its first registered user in May 2021, and has since continued to expand Orb's deployment and recruit new operators to collect more iris photos. Before the mainnet goes live, the rewards for users are in the form of WLD "vouchers". On July 24, 2023, the Worldcoin mainnet was officially launched, and the previously promised rewards to users were finally fulfilled.

According to Worldcoin's official website, 346 Orb devices have been deployed in 34 countries, and 2.21 million people have verified their identity through scanning and registered for World ID. Over the past 7 days, the World App Wallet has averaged over 120,000 transactions per day.

The Encointer blockchain will become Kusama's second system parallel chain (Common Good Parachain) in January 2022, providing the ecology with a real-life identity verification infrastructure.

Encointer does not issue its own coins directly, but provides a platform for the community to create native tokens. There are currently two communities using Encointer.

One is Zurich Leu in Zurich, Switzerland, which provides community users with additional income and also helps local businesses grow. Although Zurich is a relatively affluent area, it still faces a high level of inequality, and the citizens of Zurich are very open to new concepts such as basic income, which is very suitable for such social experiments.

The second community to adopt Encointer is Green Bay in Wisconsin, USA. They issued the local community currency Green Bay Dollar. Green Bay has more than 100,000 residents. The main purpose of Green Bay Dollar is to encourage users to support local businesses and cultivate community participation. It can also help businesses cultivate customer loyalty and reward outstanding employees.

Summarize

Both Worldcoin and Encointer hope to leverage Web3 technologies for economic inclusion. But they all differ significantly in how they authenticate, who they target, and how they work.

Worldcoin is a global project with a unified token WLD. It needs to use a dedicated Orb device to scan eyes and register, and then issue WLD to registered users. Encointer is a local project. Each local community can create its own local currency. It does not require any special equipment. It only requires users to regularly participate in offline gatherings and verify their identities with other randomly assigned users on the spot.