Crypto’s Next Craze? Orbs That Scan Your Eyeballs.

One evening last month, a crowd of cryptocurrency enthusiasts gathered at an art gallery in downtown Manhattan. They were greeted by a scene from science fiction.

At one end of the room was an open bar. Across from it stood a loose array of gray pedestals, arranged like a futuristic Stonehenge, each displaying a metal sphere about the size of a bowling ball.

The event was a launch party for Worldcoin, a cryptocurrency project created by Sam Altman, OpenAI’s chief executive, and the crypto company he co-founded, Tools for Humanity. As music thrummed in the background, guests congregated around the shiny orbs, which looked like a cross between a giant eight ball and HAL 9000, the rogue computer in “2001: A Space Odyssey.”

The gathering was a small step in what Tools for Humanity claims will be a world-changing project: to scan the eyeballs of all eight billion humans, and then use that one-time ID to offer small allotments of cryptocurrency to support them in a world upended by artificial intelligence.

Every Worldcoin orb contains a camera designed to record images of a person’s irises. The orbs convert those scans into bits of numerical code, which are supposed to serve as a new type of digital ID. In the short term, Tools for Humanity plans to generate revenue by offering its iris-based system as an alternative to security technologies like CAPTCHA, the photographic test that is used to sort humans from spam accounts.

Ultimately, Worldcoin’s backers envision a grander plan to protect people from A.I. advances that they claim will eliminate millions of jobs. They are promoting the orbs as a possible foundation for universal basic income, a welfare system in which everyone receives guaranteed payments, and argue that iris IDs will help distinguish real people from robots.

To skeptics, the prospect of a privately owned crypto company’s handling the biometric data from billions of people sounds like a recipe for dystopia, with echoes of the 2002 Tom Cruise film “Minority Report.” But Tools for Humanity has raised $115 million this year from venture capital investors, even as funding for crypto has dried up during a downturn in the industry.

Tools for Humanity is part of a growing array of crypto firms trying to latch on to the hype around A.I. to propel digital currencies back to relevance after a miserable 18 months of market crashes and bankruptcies. Its project also shows how powerful figures like Mr. Altman are seeking to profit in a tumultuous period, creating moneymaking ventures to mitigate the negative effects of A.I., even as they aggressively develop the technology.

As Tools for Humanity has gained prominence, its marketing tactics and iris-scanning techniques have raised alarms. Last month, the authorities in France and Germany said they were investigating Worldcoin’s data collection practices. On Wednesday, the government of Kenya ordered Tools for Humanity to stop conducting scans, blaming a “lack of clarity” in its handling of sensitive information.

“They’re asking us to believe them, to trust them,” said Andrew Bailey, a crypto expert at Yale-NUS College, a collaboration of Yale University and the National University of Singapore. “I don’t think I should have to trust anyone like that when it comes to sensitive information.”

A Tools for Humanity spokeswoman said the company had designed Worldcoin to “protect individual privacy” and would work with governments to meet regulatory requirements.

Despite the concerns, dozens of crypto fans showed up last month at the Canvas 3.0 gallery in Manhattan to celebrate Worldcoin’s launch. In many places, users receive a small allotment of crypto tokens when they sign up for an iris scan — essentially free money. But Tools for Humanity isn’t offering tokens in the United States, citing the legal uncertainty around crypto companies.

None of the guests seemed perturbed. And they were relatively blasé about the potential for an orb-fueled surveillance state.

“Privacy doesn’t even exist anymore,” said Lawrence Yan, a 25-year-old who works in the crypto industry, as a waiter offered him a cracker smothered in hummus. He was willing to have his irises scanned “for the meme,” he explained.

As Worldcoin has embarked on a marketing blitz, its backers have trumpeted more than two million sign-ups — a long way from eight billion, but a lot of irises nonetheless. Last month, Mr. Altman claimed that the orbs were scanning new eyeballs every eight seconds.

“We had a huge, huge surge in demand,” said Alex Blania, the chief executive of Tools for Humanity. “Long lines in front of orbs. So long that it was hard to handle in some parts of the world.”

Mr. Altman co-founded Tools for Humanity in 2019. Two years later, he posted a photo of the orb on social media and promised a new cryptocurrency that would be “distributed fairly to as many people as possible.”

“Don’t catalogue eyeballs,” responded Edward Snowden, the whistle-blower and privacy advocate, on what was then Twitter.

Mr. Altman and another co-founder, Max Novendstern, picked Mr. Blania, 29, to run Tools for Humanity when he was a graduate student in theoretical physics at the California Institute of Technology. Based in San Francisco and Berlin, the company has about 50 employees. Mr. Altman remains involved, approving important hires and shaping the overall strategy, Mr. Blania said.

In an email, Mr. Altman said he was “probably not close enough” to discuss Worldcoin in much detail. But he has kept up a running commentary on social media. “Like any really ambitious project, maybe it works out and maybe it doesn’t,” he posted last month.

Much of the scrutiny has focused on Worldcoin’s potential privacy risks. On its website, Tools for Humanity says the orbs don’t store iris data. When people are scanned, the website says, they receive a unique ID secured by complex cryptography, while any images are deleted. With wide adoption, Worldcoin IDs could help social media platforms distinguish between humans and bots, Mr. Blania said.

Eventually, the firm wants to distribute 50,000 orbs worldwide — at the moment, only a few hundred are in circulation — and amass billions of sign-ups, enough to form the basis of a universal basic income system.

The profits of the emerging A.I. revolution may ultimately have to be “redistributed with society,” Mr. Blania said. “What Worldcoin does is it gives everyone, not just people in Europe or the United States, an identity, and it gives them a way to be economically reachable.”

But as the company has expanded globally, it has faced criticism for its marketing. Before its official launch, Tools for Humanity sent contractors, called “orb operators,” to collect iris data in developing countries. Some of those contractors used deceptive techniques to solicit sign-ups, according to investigations last year by Buzzfeed News and MIT Technology Review.

And for all of Mr. Altman’s talk of an equitably distributed currency, Tools for Humanity has said about a quarter of its new digital coins, known as WLD, are already earmarked for venture investors and other company insiders.

Mr. Blania compared Tools for Humanity’s rollout problems to the challenges facing firms, like Uber, that operate large networks of contractors. He said that the company had instituted “standard quality control measures” for its work force, and that the token allocations were necessary to raise funds from investors.

“I would love that number to be lower, but it is what it is,” he said.

At the event in Manhattan, a stream of curious onlookers mingled with Tools for Humanity representatives, who wore white T-shirts emblazoned with the words “unique human.”

As music blasted, a couple walked over to an orb podium to speak with the orb operator about his experiences manning the new frontier of digital identity. He hadn’t been on the job for long, he told them, but was already getting strange questions. A new user had recently asked what would happen if “someone took off my face and put it in front of the orb?” he said.

Then the conversation turned to the unfortunate plight of “the eyeless.” A freshly scanned guest wondered, from an accessibility perspective, how people who didn’t have eyes would fit into the new world order. The orb operator nodded solemnly. “That’s a very valid concern,” he said.

None of these potential issues stemmed the flow of sign-ups. Isaac Cespedes, a 32-year-old software developer, spent much of the night weighing the pros and cons of offering his biometric data to a start-up.

“My crypto trader friend — I just messaged him,” Mr. Cespedes said. “He thinks it sounds scammy.”

By the end of the evening, though, Mr. Cespedes was lining up to be scanned.