Sam Altman‘s Tools for Humanity biometric verification company is hitting roadblocks on its path to global adoption, according to Business Insider.
The volleyball-sized metal sphere named Orb scans human irises to generate a World ID, creating a digital verification system designed to verify that someone is human rather than artificial intelligence. Users who complete the iris scan receive access to a World app ecosystem and can claim World – previously known as Worldcoin – cryptocurrency tokens worth approximately $0.80 each.
The startup, valued at $2.5 billion, has set an ambitious target of verifying 1 billion users, but has only reached 17.5 million people, BI reported.
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Altman and Tools for Humanity co-founder Alex Blania launched the venture in 2019 as AI technology became increasingly sophisticated at mimicking human behavior. The startup has secured $240 million from investors including Andreessen Horowitz, Bain Capital, and Khosla Ventures, according to PitchBook data cited by BI.
Countries From Spain To Thailand Are Blocking Iris Scanning Operations
Government agencies across multiple continents have moved to halt or investigate the biometric data collection. Spain, India, Indonesia, Kenya, Colombia, Thailand, and the Philippines have taken regulatory action against the company’s operations. Three countries issued orders against the startup in October alone, according to BI.
The National Privacy Commission in the Philippines issued a cease-and-desist order to stop scanning eyeballs for violating the country’s data privacy act. Colombian regulators ordered the immediate cessation of operations and data deletion, while Thai officials raided iris scanning locations and arrested suspects for operating an unlicensed digital asset business. Tools for Humanity said it is appealing the decision in Colombia, BI reported.
Meanwhile, German authorities investigating the company concluded that its data protection measures would not provide adequate security against cybercriminals or state attackers. The company said it is appealing that decision, which is on hold as regulators evaluate new technology. According to BI, China’s Ministry of State Security also warned that collecting iris data for cryptocurrency could pose a national security threat.
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Professor Calls World A Fad As It Holds Just 0.1% Of Bitcoin’s $2 Trillion Market Cap
World holds less than 0.1% of Bitcoin’s roughly $2 trillion market capitalization. “It’s really just hard to judge something that’s a crypto with a $2 billion market cap as anything other than experimental or a fad. World is not a contender in any way for currency or an asset relative to the dollar or Bitcoin,” Nikhil Bhatia, a finance professor at the University of Southern California who studies cryptocurrency, told BI.
Former Tools for Humanity employees described operations in developing countries where people were attracted by free cryptocurrency payments, according to BI. Currency exchanges appeared near Orb stations where users immediately converted tokens to cash in Latin America, according to four people and photos viewed by the website.
Similar scenarios unfolded in Kenya where the country's High Court ruled World’s operations were unlawful in May and ordered permanent deletion of biometric data.
In Argentina, unaffiliated third-party organizers bused people to iris scanning locations to receive cryptocurrency payments, according to local media reports.
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Former Employees Question Revenue Strategy Behind $2.5 Billion Valuation
BI spoke with eight former Tools for Humanity employees who raised questions about the company's ability to build a sustainable, long-term business. A former employee who worked on Latin American expansion reportedly said that regulators repeatedly pressed the team to explain how the company planned to generate revenue.
“I actually have trouble seeing it as a business," Forrester Vice President and Principal Analyst Martha Bennett told BI. "There isn’t an incentive around buying or leasing an Orb other than making money off of it by scanning loads of eyeballs, and for the users, it’s to get some more coins.”
Two former employees told BI that each Orb required thousands of dollars to manufacture. In April, Blania said the company had already spent millions on development and deployment.
Tools for Humanity does not charge users for access to its platforms, and Blania has said the company will avoid a data-broker model. BI reported that the company introduced World ID fees in the spring of 2024 for apps that use its verification services. A separate community operator program allows individuals to rent or purchase Orbs for their own use within the system.
“I don’t see a sort of killer use case that they’ve really figured out and will drive major traction for them," Juniper Research Vice President and Fintech Market Researcher Nick Maynard told BI. "There needs to be a real purpose to exist, and that isn’t super clear as of yet.”
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