Why Worldcoin's Iris-Scanning Company Is Struggling to Make Money

Tools for Humanity, the company behind Worldcoin's distinctive iris-scanning devices called Orbs, laid off employees in June 2026, Business Insider reported. The cuts point to a core problem the company has not yet solved: how to make money from its biometric hardware.

What the Company Does — and What Is Not Working

Founded in 2019 by CEO Alex Blania and board chair Sam Altman (CEO of OpenAI), Tools for Humanity built its business around an unusual idea. An orb-shaped scanning device reads a person's iris pattern, creates a digital proof that they are a unique human (not a bot), and issues them a World ID credential. This credential is meant to help verify real people in a world increasingly filled with AI-generated fake identities. The company also created a cryptocurrency token called WLD to incentivize people to sign up.

The technology behind the Orb is genuinely sophisticated. The device captures detailed near-infrared images of both irises, uses local processing on the device itself to extract a compact biometric template (called an IrisCode), and then generates a mathematical proof that this template has never been seen before — all without sending raw biometric data to a distant server. For a privacy-focused identity system, this approach makes sense. Building and operating it globally, though, is expensive.

That is where the company's challenges become clear. Despite signing up millions of users worldwide — particularly in Sub-Saharan Africa, Southeast Asia, and Latin America — Tools for Humanity has not found a way to turn Orb deployments into steady revenue, Business Insider reported. The hardware costs money to make and run. Operating the physical Orb booths requires paying staff and managing logistics. And the planned money-making layers — charging other companies to verify users, charging fees on the World Chain blockchain, or licensing World ID to enterprises — have not, by all available accounts, brought in enough revenue to cover costs.

The Layoffs in Broader Context

The company has not disclosed exact numbers or which teams were affected. What is clear from reporting is that the cuts stem from the unresolved revenue problem, not from any single operational mishap.

This pattern is worth stepping back to understand. We have seen similar struggles before in the 2010s, when a wave of startups built hardware devices for fingerprint scanning and secure digital identity. Many of those companies had sound technical foundations, but several were shut down or bought for their talent before the markets they were betting on actually took shape. Hardware-based identity businesses are especially difficult because each device you manufacture and deploy costs real money upfront, while the demand from companies and users who want to use your system grows much more slowly.

Tools for Humanity faces an additional challenge that those fingerprint companies did not: the combination of collecting iris biometric data and distributing cryptocurrency has attracted regulatory scrutiny in multiple countries. Authorities in Germany, Kenya, Spain, Portugal, Brazil, and South Korea have at various points restricted or investigated the company's operations, slowing enrollment and disrupting its growth plans. Each regulatory pause is also a pause in the network effects — the self-reinforcing cycle where more users make the system more valuable — that World ID depends on to become useful.

Why Making Money from This Is Genuinely Hard

The original plan had three stages. First, sign up enough people that World ID becomes recognized as a reliable way to prove you are human, not a bot. Second, have other companies and app developers pay to verify their users against World ID, or build services on the World Chain blockchain that generate revenue. Third, the WLD token increases in value as more people use the system, rewarding early participants and funding ongoing operations.

The problem is that stage one requires spending a lot of money for a long time — paying for Orbs, paying operators, incentivizing people to enroll — before stage two brings in meaningful income. And stage two needs enough companies and apps to want to use World ID, which requires enough enrolled users, which circles back to needing more spending in stage one. This is a familiar "chicken-and-egg" problem in network businesses, but it is especially acute here. Unlike a cloud service or a marketing campaign, you cannot reduce the cost per person simply by working more efficiently — the hardware and the physical act of scanning someone's iris impose real, unavoidable costs on every enrollment.

Sam Altman's role as both OpenAI CEO and Tools for Humanity chairman gave the project high visibility and, presumably, helped attract investment. But publicity does not fix broken economics, and the layoffs suggest the team internally acknowledges that the current spending level is not sustainable on its current path.

What Happens Next Is Still Uncertain

Nothing in the available reporting suggests that Tools for Humanity is shutting down Worldcoin entirely. At this stage of the market cycle, layoffs at a hardware-and-crypto venture are typically a reset — the company is trying to reduce its monthly spending to buy more time while figuring out whether it needs a fundamentally different way to make money or whether it has grown to a scale where it can start generating real revenue without spending as aggressively.

The bigger, longer-term question is whether World ID's core promise — a privacy-preserving, hardware-based proof that you are a unique human — will matter in a world where AI systems can now generate convincing fake identities, and where the industry has not yet agreed on a standard solution for detecting them. If that promise holds up and if the company can somehow make the Orb cheaper to operate or design lighter ways to verify users, there is a workable path forward. If regulators keep blocking operations in key markets and the revenue model stays theoretical, the layoffs are unlikely to be the last painful decision the company has to make.

The iris-scanning Orb was always a bold gamble: that the right answer to AI-driven identity fraud was a physical device, rooted in cryptography, deployed at global scale to ordinary people. Whether that bet works out remains genuinely unclear.