The Rise of AI, Worldcoin and the Utopian Dream of Universal Basic Income

MoneyBestPal Team
Close up photo of human iris with grey but slightly bluish color
Image: Freepik

Artificial intelligence (AI) is causing unexpected changes in the world. From autonomous vehicles to intelligent helpers, AI is enhancing our lives and creating new opportunities. The displacement of jobs, the rise in inequality, and the violation of privacy are just a few of the severe issues that AI poses. How can we ensure that AI benefits everyone, not just some, of us?


The provision of a monthly and unconditional cash payment to every citizen, regardless of their financial situation, place of employment, or social standing, is one potential answer. This concept is known as universal basic income (UBI). The concept of universal basic income (UBI) is not new, but it has recently received more attention in reaction to the disruptions brought on by AI and automation. The argument made in favor of UBI is that it would improve freedom, encourage innovation, and lessen poverty. UBI would be unaffordable, hinder employment, and foster dependency, according to its detractors.

An innovative and ambitious new initiative called Worldcoin seeks to bring AI and UBI together. Worldcoin is a cryptocurrency that wants to give tokens to everyone on the earth by utilizing a biometric scanner that validates each person's identification by scanning their individual eyes. With everyone having access to the advantages of digital currency, Worldcoin asserts that its goal is to build a more equitable and inclusive global economy. Worldcoin also wants to use its user base to gather information and insights that could help with the creation and administration of AI systems.

1. AI and its impact on the economy

Artificial intelligence (AI) is the name given to computer programs that carry out cognitive tasks similar to those performed by humans, such as comprehending, learning, and reasoning. Algorithms, software, hardware, robots, and smart gadgets are just a few examples of how AI might be implemented. The manufacturing, healthcare, and education sectors, among others, are all being transformed by AI. By evaluating a lot of data, artificial intelligence (AI) can make decisions more effectively and increase productivity. Also, it can lead to the development of new markets, industries, and products, which will increase consumer demand and open up new sources of income.

Many people believe that AI will boost productivity and the economy. How much output can be produced with a given number of inputs, such as labor, capital, or natural resources, is known as productivity. Better productivity translates into higher wages and living standards since it increases output per unit of input. A McKinsey analysis claims that AI has the ability to boost global economic activity by $13 trillion by 2030, or approximately 16 percent more cumulative GDP than it does now. This equates to an annual GDP growth increase of 1.2 percent more.

There are numerous ways that AI might increase productivity. First, it can automate normal, repetitive jobs that are prone to human mistakes, including data entry, accounting, or customer support. This may free up human workers to concentrate on more imaginative and challenging activities that call for human judgment, intuition, or empathy. Second, it can improve human talents by offering perceptions, suggestions, or predictions based on vast and varied data sets. This can facilitate new kinds of creativity and discovery and enhance the effectiveness and speed of decision-making. Third, it can produce new results that weren't previously possible, like developing original content, designing fresh items, or finding novel medicines.

Some examples of how AI is transforming different sectors include:
  • Manufacturing: AI has the potential to improve supply chain management, eliminate waste and defects, and optimize production processes. AI, for instance, can assist manufacturers in monitoring equipment performance, anticipating maintenance requirements, and averting malfunctions. Smart factories that can instantly adjust to shifting consumer needs and market situations can likewise be made possible by AI.
  • Healthcare: AI can help with disease diagnosis, treatment, and prevention, as well as cost- and access-related improvements. AI, for instance, can assist medical professionals with picture analysis, anomaly detection, and therapy recommendations. Patients can obtain online consultations, control their meds, and monitor their health problems with the use of AI.
  • Education: AI has the ability to customize learning experiences, adapt curriculum to specific learner requirements and preferences, and offer teachers and students feedback and direction. For instance, AI can track students' progress, suggest learning resources, and assist them in studying at their own speed. AI can aid educators in evaluating student performance, spotting learning gaps, and developing successful interventions.

The impact of AI on the economy is not only positive but also disruptive. Some of the challenges that AI poses include:
  • The creation of super firms: AI may result in the rise of powerful companies with access to plenty of data, money, and advanced technological capabilities. These companies could eliminate smaller rivals and lessen market competition while capturing an excessive percentage of the market value and profits produced by AI.
  • Inequality: The wealth, technological, and talent gaps that now exist between developed and developing nations could be made worse by AI. Due to their higher levels of invention, investment, and adoption of AI technologies, developed nations may gain more from AI. Because of their lower levels of infrastructure, education, and governance, developing nations may have trouble catching up to the AI frontier.
  • Reshaping the labor market: In some industries and professions, particularly those that need routine, repetitive, or low-skilled work, AI may eventually displace human workers. Also, the impact of AI on the demand for and supply of labor in various industries, geographical areas, and occupations could be significant. Due to their complementary skills or jobs with AI technologies, certain workers may have increased pay and improved chances. Due to their talents being replaceable by AI technology, other workers may experience job loss or income stagnation.
  • Ethical issues: AI may lead to moral conundrums including issues about privacy, security, fairness, and accountability. For instance, based on their data or algorithms, AI systems may be biased, discriminating, or manipulative toward particular groups of persons or individuals. Moreover, malevolent actors or rogue nations may be able to hack, exploit, or misuse AI systems. By influencing or directing people's decisions or behaviors, AI systems may also put human autonomy, dignity, or agency in jeopardy.

Hence, it is essential to make sure that AI is created and used in a way that is accountable, moral, and inclusive, maximizing its advantages and minimizing its negative effects on the economy and society. Governments, corporations, academic institutions, members of civil society, and international organizations must work together on this.

Policymakers must create proper regulations that encourage the growth and dissemination of AI while minimizing its unfavorable consequences if they are to address these issues and guarantee that the advantages of AI are widely distributed throughout society. Some of the policy areas that need attention include:
  • Investing in research and development: Public and private investment in fundamental and applied research on AI technologies that have high social benefit but poor commercial returns must be supported by policymakers.
  • Fostering competition and innovation: Governments and companies should support a climate that fosters innovation and competitiveness in the AI industry and promotes R&D, entrepreneurship, collaboration, and diversity. This entails supplying sufficient resources, infrastructure, rules, rewards, and protection for intellectual property rights. The enforcement of antitrust laws, the avoidance of unfair practices, and the facilitation of new entrants' market entry are further steps that policymakers must take to provide a level playing field for all market participants.
  • Enhancing education and skills: To give kids the abilities they will need in the workplace of the future, such as digital literacy, critical thinking, and creativity, policymakers must change educational systems. In order to keep up with changing labor market needs, policymakers must also offer workers chances for lifelong learning.
  • Supporting workers and communities: Workers who are impacted by AI-induced transformations, such as underemployment, unemployment, or wage loss, need to have access to adequate social security and safety nets. In order for communities to adapt to the societal and cultural shifts brought forth by AI, policymakers must also build inclusive and resilient communities.
  • Establishing ethical principles and standards: In order to create and deploy AI systems that respect human rights, privacy, security, accountability, and fairness, governments and industry need to adopt ethical principles and norms. These values and norms should serve as the foundation for these guidelines, and they should represent the tastes and preferences of all parties involved. These should also be put into effect by the proper authorities, including auditing or monitoring organizations.
  • Promoting social dialogue and participation: All parties involved in or impacted by AI systems should be encouraged to engage in social conversation and involvement that allows them to express their opinions, worries, expectations, and comments. This entails interacting with employees, customers, citizens, experts, and civil society organizations via a variety of platforms, including forums, forums, forums, and forums. This would ensure that AI systems serve the greater good and help to increase the legitimacy, trust, and transparency of those systems.

The impact of artificial intelligence on society and the economy is wide-ranging. Technology has enormous possibilities for boosting welfare, innovation, and productivity, but it also presents formidable obstacles to achieving just and equal outcomes for all. To fully utilize AI while addressing its risks and trade-offs, policymakers must take action now.
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2. Worldcoin and its vision

A cryptocurrency initiative called Worldcoin seeks to develop an eye-scanning-based worldwide digital identity system in order to empower individuals, build a more inclusive and equitable global economy, and fight poverty. Sam Altman, the CEO of OpenAI, a research group that creates artificial intelligence tools, began the project.

The goal of Worldcoin is to provide a global digital identification infrastructure that can scale and provide a secure means of separating people from machines online while maintaining privacy. In the age of AI, when it is getting tougher to determine whether something was created by humans or an algorithm, the project sees this as a significant challenge. By doing so, Worldcoin hopes to achieve two main goals:
  • To provide everyone person on Earth with a free share in Worldcoin. It aspires to set the stage for an "AI-funded" universal basic income (UBI), a theory that calls for paying all citizens a predetermined salary regardless of their financial situation. The project claims that it wants to use its cryptocurrency to increase people's access to economic opportunity and to distribute wealth more fairly and effectively around the world.
  • Allowing individuals to use various identity-verification-required digital services, such as banking, voting, healthcare, education, and other services.

Every person has inherent worth and equality, and everyone should have the right to privacy and to take part in the global economy, according to the Worldcoin concept. Also, according to Worldcoin, people must be able to participate in and gain from technical advancement in the age of AI.

Worldcoin has created an open-source protocol that is backed by a large international community of programmers, individuals, economists, and technologists in order to accomplish this ambition. The protocol consists of three main components:
  • World ID: A privacy-preserving human identification system that uses the Orb, a spherical device that scans the eye to create a unique biometric hash that cannot be reverse-engineered or duplicated.The Orb just checks to make sure each person is a real human and does not save any personal information or photographs. To further ensure that only the user has access to their World ID, The Orb encrypts the biometric hash using a public key that belongs to them.
  • Worldcoin: Every person who authenticates their identification with the Orb receives a distribution of a blockchain-based digital currency. A proof-of-stake consensus process and a sharding architecture are used in Worldcoin to make it quick, scalable, and secure. Another feature of Worldcoin is its integrated governance framework, which enables the community to vote on changes and ideas.
  • World App: A mobile program that acts as the first wallet compatible with World ID and enables users to receive, store, and spend Worldcoin. Users of the World App can also access a variety of online services that demand identity confirmation, including banking, voting, healthcare, education, and more.

Yet, there has also been skepticism and criticism of Worldcoin's goal from a number of sources. One of the key issues is the possible privacy dangers associated with the collection, storage, and use of biometric data, such as eye scans, to authenticate users' identities. In a blockchain network, which is meant to be anonymous and decentralized by design, several critics also dispute the need for such a specific and exact method of identifying people. Others question if building a UBI program based on cryptocurrencies is both feasible and desirable.

How Worldcoin works

Worldcoin uses an Orb, a silver ball that scans the irises of users who desire to join the network. The iris scan is transformed into a special number that serves as the user's digital identity. The user then receives some complimentary Worldcoin tokens as a thank you for signing up. The user can also download an app that enables them to send and receive payments, make purchases, and transfer money using Worldcoin and other virtual currencies.

The Orb must be used face-to-face, and the scan requires the user to gaze into it for around 10 seconds. According to the initiative, the iris scan is just used to generate an exclusive number that is compared to the current network to avoid duplication and is not stored in any database. The initiative further states that the Orb does not gather any further personal information from the user, including name, location, or biometric information.

Worldcoin's development and implementation are still in their early phases. A number of well-known investors, including Andreessen Horowitz, Coinbase, Digital Currency Group, and others, have contributed more over $100 million to the initiative. It has amassed more than 2 million users so far and has been testing its technology in 33 countries, primarily in Europe, India, and southern Africa. The project intends to distribute 1,500 Orbs throughout the world and grow its activities to 35 locations in 20 different nations. The Worldcoin token is currently tradeable on a number of cryptocurrency exchanges, including Binance, but due to regulatory issues, it is not accessible in the United States.

Worldcoin Strengths and Weaknesses

Strengths:
  • Worldcoin has an audacious and ambitious goal of developing a more inclusive, just, and democratic economic system. The goal of Worldcoin is to create a place where everyone may profit in the age of AI, regardless of where they reside or who they are.
  • Sam Altman, a former president of Y Combinator and the current CEO of OpenAI, one of the top AI research organizations in the world, is a member of Worldcoin's strong team of engineers, investors, and advisers. Worldcoin is also supported by well-known venture capital firms like Andreessen Horowitz, Coinbase, Digital Currency Group, and Multicoin Capital.
  • Worldcoin employs an original and ground-breaking method for confirming a person's identification by scanning their eye using a gadget called the Orb, which creates a cryptographic signature that is connected to a Worldcoin wallet. Only actual humans will be able to claim their portion of the Worldcoin because to The Orb's quick, precise, and secure design. By not keeping any biometric information or private information on the gadget or on the blockchain, The Orb also protects privacy.
  • A big potential market for Worldcoin consists of the billions of people who are now underbanked or unbanked, which means that they do not have access to fundamental financial services like payments, savings, credit, insurance, and credit. They might be given access to a digital wallet through Worldcoin that enables free international value transfers and storage. They might also be able to take part in the developing decentralized economy supported by blockchain and smart contracts thanks to Worldcoin.

Weaknesses:
  • Scaling the network of Worldcoin while maintaining its security and dependability presents considerable technical problems. Worldcoin is supported by a global network of Orbs run by volunteers or partners. For the purpose of verifying new users and handling transactions, these Orbs must be always online, synchronized, and updated. Also, Worldcoin must make sure that its blockchain system can process a huge number of transactions without slowing down or underperforming.
  • In order to operate in many jurisdictions and adhere to local laws and norms, Worldcoin must overcome considerable legal and regulatory difficulties. For the purpose of distributing its currency and managing its Orbs, Worldcoin must get licenses and authorization from numerous authorities. Along with potential tax ramifications, Worldcoin must also consider anti-money laundering legislation, consumer protection laws, and data privacy laws that may differ from country to country.
  • Gaining the trust and acceptance of its potential users and the general public presents enormous social and ethical issues for Worldcoin. People need to be persuaded that Worldcoin's eye-scanning technology is trustworthy, private, and secure. Worldcoin also needs to address worries that its currency can be used for nefarious or illegal activities like supporting terrorism, money laundering, or tax evasion. Also, Worldcoin needs to make sure that its currency distribution is honest and open, preventing fraud, misuse, or manipulation.

3. UBI and its feasibility

The concept of Universal Basic Income (UBI) has received more attention recently as a potential solution to some of the problems facing the 21st century, including increasing inequality, poverty, unemployment, automation, and environmental damage. UBI is typically characterized as a routine, unconditional cash distribution from the state to all citizens or residents, irrespective of their financial circumstances, employment status, or living arrangements. UBI strives to give everyone a fundamental degree of financial stability and independence without creating stigma or disincentives to work.

There are various ways in which UBI is different from other types of social welfare. In the first place, UBI is universal, which means that it is provided to everyone regardless of their earnings, wealth, work status, or other factors. Other social welfare programs, such as food stamps, housing subsidies, and unemployment assistance, are often intended for certain populations of people who meet the necessary qualifications. Second, the basic nature of UBI means that it is designed to pay for a person's essential expenses. Depending on a person's circumstances and the level of support provided, other social welfare programs may meet a person's fundamental requirements in excess of or insufficiently. 

Third, UBI is provided as income, which means that the recipient may spend the money any way they choose. Some social welfare programs may offer goods or services in exchange for money, such as food coupons, medical treatment, or educational opportunities, or they may place limitations on how the money may be used.

The primary arguments in support of UBI are that it would increase human dignity and freedom, decrease poverty and inequality, increase economic security and well-being, promote employment and entrepreneurship, and make social assistance administration simpler. The primary objections to universal basic income are that it would be excessively expensive and unsustainable, discourage people from working and making a contribution to society, foster dependency and entitlement, diminish the value of labor and social responsibility, and weaken social cohesion and solidarity.

The volume and frequency of payments, the funding sources and procedures, the effects on the labor market and the economy, political and public support, and the moral and ethical ramifications are just a few of the variables that affect whether or not UBI is feasible. UBI is not a universally applicable solution, though. There are numerous UBI models and ideas, each with a different structure, funding source, and set of goals. Some of the key dimensions that differentiate UBI schemes are:
  • Universal vs. targeted: While some UBI ideas target the entire population, others concentrate on particular demographics like children, the elderly, or low-income households. The benefits of universal systems are their simplicity, inclusivity, and the avoidance of inclusion or exclusionary errors. Targeted policies might be more politically viable, progressive, and cost-effective.
  • Unconditional vs. conditional: Certain Universal Basic Income (UBI) schemes provide benefits without any prerequisites, while others necessitate involvement in areas such as education, vocational training, employment, or voluntary community work. Unconditional programs don't use compulsion or paternalism and respect the beneficiaries' autonomy and dignity. Conditional systems may improve labor supply, human capital, and social cohesiveness.
  • Periodic vs. lump sum: Some UBI ideas offer a consistent monthly or annual payout, while others propose a one-time award or a series of payments over a constrained time period. Periodic programs offer a steady, predictable revenue level and smooth consumption over time. More flexibility and investment alternatives may be made available to recipients of lump sum plans.
  • Flat vs. variable: While some UBI ideas would pay the same amount to everyone, others would alter the payout based on a person's age, region, or other considerations. Flat systems promote recipient horizontal equity and are simpler to administer and convey. Variable plans may better capture the varying requirements and expenses of living of various groups or locations.

Some examples of UBI models and proposals from around the world are:
  • The Alaska Permanent Fund Dividend (APFD): A yearly dividend from the earnings of a sovereign wealth fund created with oil royalties is paid to every resident of Alaska under this universal and unconditional program. Based on the fund's performance and governmental actions, the amount changes every year. The payout per person in 2020 was $992.
  • The Iran Cash Transfer Programme (ICTP): Since 2010, all Iranian households have received a monthly cash transfer as compensation for the elimination of gasoline and food subsidies under this all-inclusive but constrained program. The monthly payment is fixed at 455,000 rials ($11) per person. The requirement is that recipients register for the program and disclose their income and assets. Wealthy or high-earning households are urged to freely opt out.
  • The Stockton Economic Empowerment Demonstration (SEED): This is a targeted and unconditional scheme that pays a monthly cash transfer of $500 for 18 months to 125 randomly selected low-income residents of Stockton, California since 2019. Private donations are used to support the pilot project, which examines how UBI affects poverty, well-being, and empowerment.
  • The Basic Income Grant (BIG) pilot project in Namibia: The Otjivero-Omitara region's people under the age of 60 received a monthly cash transfer of 100 Namibian dollars (about $12) as part of this targeted and unconditional program, which operated from 2008 to 2009. The pilot project, which was supported by a group of civil society organizations, examined the viability of UBI and its impact on economic growth, health, and education outcomes.
These examples highlight the complexity and diversity of UBI schemes and proposals. On what makes the best or most ideal design for UBI, there is no agreement. Depending on each society's objectives, values, available resources, and tastes, various scenarios could call for a variety of approaches.

Conclusion

The radical idea of Universal Basic Income (UBI) has the potential to reduce poverty and inequality, increase freedom and autonomy, improve human dignity and social cohesion, foster innovation and creativity, and get society ready for the challenges that automation and artificial intelligence (AI) will present in the future. UBI is criticized for being unjust and inefficient, too expensive and unsustainable, creating unfavorable incentives and reducing labor effort, breaking the social compact and eroding a sense of duty, and being unpopular and politically unviable.

A brand-new initiative called Worldcoin promises to offer UBI through its digital money, WLD, which is given to everyone with a World ID. Without divulging any personal information, World ID is a digital identity that protects privacy and enables users to demonstrate their authenticity and uniqueness online. WLD is an Ethereum-based ERC-20 token with a fixed supply of 10 billion tokens that will be distributed over a 15-year period. Although it has ambitions to gradually decentralize its governance, the Worldcoin Foundation now controls token distribution and allocation.

The goal of Worldcoin is to finance its UBI program by connecting it to the advancement of AI. Worldcoin might establish a separate AI Lab or transfer a portion of its WLD tokens to OpenAI in exchange for a cut of the revenue generated by AI. In this method, Worldcoin might use the income from AI to pay for inflation and give existing holders extra WLD. The benefits of AI may then be distributed equally and be in line with human values and interests.

The goal of the ambitious Worldcoin project is to build a new identity and financial system that is accessible to all people. It might be possible to implement a brand-new, globally dispersed, AI-funded type of UBI. It also has a lot of unknowns and dangers, like technical viability, legal compliance, user acceptance, security issues, moral conundrums, and social effects. It is yet to be seen if Worldcoin will be able to accomplish its goal.
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