:max_bytes(150000):strip_icc()/GettyImages-1490660761-eb0c85084416470091a1ccd1b5a225c6.jpg "ChatGPT founder Sam Altman launches a new cryptocurrency. What does this mean for Bitcoin?")
Sam Altman, CEO of OpenAI (creator of ChatGPT), launched a cryptocurrency called Worldcoin. It has raised $100 million from high-profile venture capital investors and has released a world-class crypto wallet app that can be downloaded to your phone. Altman had big plans for WorldCoin to become the first cryptocurrency in the hands of every person on the planet.
So what does this new cryptography mean for Bitcoin (CRYPTO:BTC), which is currently the world's most popular digital currency? After all, for more than a decade Bitcoin has failed to achieve some of its initial ambitions, such as replacing fiat currency or becoming a ubiquitous form of online payment. Can New Competitors Force Investors to Rethink Bitcoin Valuation?
What are Worldcoins?
Worldcoin is an ERC-20 token for the Ethereum (CRYPTO:ETH) blockchain. This means that in practical terms Worldcoin will look (and trade) similar to the cryptocurrencies investors are familiar with. Some of the largest cryptocurrencies by market cap are ERC-20 tokens, including Shiba Inu (CRYPTO: SHIB ) and Uniswap (CRYPTO: UNII ). So in this respect, WorldCoin is not breaking new ground.
What sets WorldCoin apart is that it aspires to be both a cryptocurrency and a global identification system. Sam Altman plans to distribute WorldCoin tokens to every person on earth with the tagline “Global Economy for All”.
And this is where things get a little, well, creepy. To withdraw your free Worldcoin crypto tokens and register for a Worldcoin ID, you must provide Sam Altman with your eye scan. That's right: Worldcoin has developed its own iris scanning tool called Orb. Once you've scanned your eyeballs with the Orb, you're good to go. According to Altman, this step is necessary to verify that you are a real person and that your privacy is not meant to be violated. He won't even ask your name.
Still, it's easy to see how some YouTubers will have fun with WorldCoin. The launch of this cryptocurrency resembles the plot of a dystopian science fiction film: the creators of the world's most powerful artificial intelligence system have created a digital ID tracking system for all people on earth, and now a digital ID is required to invest in cryptocurrency. Already one Ethereum developer called WorldCoin "unrealistic and scary".
WorldCoins vs Bitcoins
That said, WorldCoin has at least two advantages over Bitcoin. One of them, of course, is superior technology. Bitcoin still uses the 2009 proof-of-work blockchain technology which requires a power-hungry computer-based mining system. Worldcoin, on the other hand, uses the latest Ethereum proof-of-stake technology, as well as a variety of Layer 2 scaling solutions for Ethereum. According to WorldCoin, "no gas" i.e. free transactions will become the norm. Simply put, there are no transaction fees when you move your Worldcoins.
WorldCoin seems poised to take off even faster than Bitcoin. For example, more than 1.7 million people worldwide have signed up on Worldcoin. Compared to Bitcoin, it takes about 14 years for 1 Bitcoin or more to 1 million unique wallet addresses.
And let's not forget that Sam Altman has some magical ChatGPT dust to sprinkle on WorldCoin. ChatGPT grew to 1 million users in just five days, which may explain why investors are willing to pay Sam Altman $100 million for this new crypto project. It can scale fast. Just imagine the possibility of cross-promotion! What if every time you use ChatGPT you see a reminder to join Worldcoin? Or if the only way to pay for ChatGPT Premium membership was through WorldCoin?
How are bitcoins worth?
In the end, though, WorldCoin's global expansion plans seemed too farfetched. For example, Altman wants to reach 1 billion users in two years. But the world population is now 8 billion people, so the ultimate goal of getting Worldcoin into the hands of every person on earth seems unrealistic. So I don't think Bitcoin is anything to worry about right now.
However, if WorldCoin gains initial traction, we should seriously discuss Bitcoin's future valuation. Many optimistic Bitcoin price predictions, such as $1 million per coin, are based on the basic assumption that Bitcoin will continue to erode the world's financial system. In my opinion, Worldcoin (due to cheapness) has the best chance of all altcoins to replace Bitcoin in poor and growing markets.
For now I keep WorldCoin on my watchlist. Encryption is an interesting project from the founders of ChatGPT, so it cannot be completely ignored. But that doesn't mean I sell my bitcoins. I can't think of any other cryptocurrency, I'll hold on to it, even if the AI masters eventually take over.
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Dominic Basulto has positions in Bitcoin and Ethereum. Motley Fool has a position on and recommends the Bitcoin, Ethereum, and Uniswap Protocol Tokens. The Motley Fool has an open policy.