Re: RUBI: A Self-Sovereign Identity-Based Retroactive UBI System - Seeking Community Feedback

Thank you, Manu, for your detailed feedback on the RUBI proposal
shared earlier. Your insights helped me refine the technical and governance
dimensions of the proposal significantly.

To keep this response readable, I’ve used a hybrid format:

   - *Short responses* are included *inline *below each of your
comments in blue
   text.
   - *Two longer responses* (NS: Response 2 and NS: Response 8) are
   included *in this top section*, referenced from the inline portion.
   Below that, I’ve also included a *summary table* and *write-ups* that
   walk through each scenario’s evolution, balancing privacy and fraud
   prevention in open, globally accessible UBI systems.


*NS: Response 2 & 8 – On Pseudonymity vs. Fraud Prevention*

 *Scenarios: Privacy-Security Trade-Offs*



*Scenario*

*Privacy (%)*

*Security (FAR, % Fraud)*

*Technical Solution*

*Policy Solution*

*Technical Challenges*

*Policy Challenges*

*Scenario 1: Initial Setup*

100%

0.1%

PHCs with zero-knowledge proofs (ZKPs)

None

Scalability for global deployment

Lack of international coordination

*Scenario 2: Centralized Interlinking*

99.9%

<0.01%

Global database interlinking, ZKPs, blind signatures with double-spending
detection

International agreements for database sharing

Database scalability, integration complexity

Fairness for undocumented users, geopolitical resistance

*Scenario 2.1: Pre-Payment Detection*

99.9%

0% (double-claiming)

Pre-payment double-spending detection, global database interlinking, ZKPs

Automated fraud prevention policies

Real-time detection latency, database complexity

Same as Scenario 2

*Scenario 2.2: Inclusive Identity via ID4D*

99.9%

0% (double-claiming)

Pre-payment double-spending detection, global database interlinking, ZKPs

Collaboration with World Bank ID4D for inclusive ID issuance

Real-time detection latency, database complexity

Global adoption of ID4D, ensuring refugee inclusion

*Scenario 3: Decentralized Interlinking*

99.99%

<0.0001%

Blockchain with cryptographic commitments, ZKPs, blind signatures

Decentralized governance protocols

Blockchain scalability, consensus mechanism overhead

Encouraging global participation

*Scenario 4: Regional RUBI Currencies*

99.999%

0%

Decentralized interlinking, regional RUBI currencies (e.g., UnityRUBI,
EuroRUBI), ZKPs

Regional currency policies, phased global adoption

Cross-regional currency interoperability

Exclusion of non-participating regions, cultural resistance

*Scenario 5: Enhanced Blockchain Security*

99.9999%

0%

Blockchain with rotating commitments, sharding, ZKPs for audits

Global privacy standards, audit transparency policies

Quantum-resistant cryptography implementation

Ensuring universal adoption, policy alignment


Below, I detail each scenario and sub-scenario, starting with a description
of the system’s design, followed by the problem’s gravity with a simple
example, and concluding with technical and policy solutions, showing the
evolution of ideas across five stages.



*Scenario 1: Initial Setup (100% Privacy, 0.1% Fraud)*

   - *Description*: The RUBI system issues PHCs regionally without
   interlinking, using ZKPs to ensure 100% pseudonymity in claims, assuming
   regional independence for uniqueness verification.
   - *Problem*: Without global interlinking, dual citizenship fraud occurs
   due to the lack of a mechanism to verify global uniqueness. An individual
   with PHCs from two regions claims RUBI twice, exploiting this gap. In a
   system of 1,000,000 users, 1,000 fraudulent claims (0.1%) result,
   undermining fairness.
   - *Technical Solution*: PHCs use ZKPs to prove uniqueness without
   revealing identity, but no interlinking exists to detect duplicates across
   regions.
   - *Policy Solution*: None initially, as the system assumes regional
   independence.



*Scenario 2: Centralized Interlinking (99.9% Privacy, <0.01% Fraud)*

   - *Description*: The RUBI system introduces a centralized global
   database interlinking regional identity records, maintaining pseudonymity
   via ZKPs but requiring identity data storage for uniqueness checks.
   - *Problem*: Dual citizenship fraud is detected via the centralized
   database, reducing fraud to <0.01%, but a breach exposes 10,000 users’ data
   out of 100,000,000 (0.01% privacy loss) due to the database being a single
   point of failure, risking identity theft for honest users.
   - *Technical Solution*: Global database interlinking checks for
   duplicates, using ZKPs and blind signatures with double-spending detection
   to catch fraud after payment.
   - *Policy Solution*: International agreements enable database sharing,
   ensuring cross-regional uniqueness.



*Scenario 2.1: Pre-Payment Detection (99.9% Privacy, 0% Double-Claiming
Fraud)*

   - *Description*: Building on Scenario 2, the RUBI system enhances fraud
   detection by implementing pre-payment double-spending checks, maintaining
   the centralized database for interlinking.
   - *Problem*: An individual claims RUBI with a legitimate PHC and a
   forged identity, and the initial system catches this after payment,
   revealing their identity (0.01% privacy loss). Pre-payment detection
   prevents this fraud upfront, achieving 0% double-claiming fraud, but the
   centralized database breach risk persists.
   - *Technical Solution*: Blind signatures with pre-payment
   double-spending detection check for duplicates before payment, canceling
   fraudulent claims without identity revelation.
   - *Policy Solution*: Automated fraud prevention policies ensure no human
   involvement, preserving privacy.



*Scenario 2.2: Inclusive Identity via ID4D (99.9% Privacy, 0%
Double-Claiming Fraud)*

   - *Description*: Building on Scenario 2.1, the RUBI system integrates
   with inclusive identity initiatives to address fairness, maintaining
   pre-payment detection and centralized interlinking with ZKPs for
   pseudonymity.
   - *Problem*: The reliance on formal identity documents excludes
   undocumented individuals, such as refugees without birth certificates,
   preventing them from claiming RUBI and undermining the system’s universal
   goal. In a system of 100,000,000 users, 1,000,000 might be excluded,
   creating a significant fairness gap.
   - *Technical Solution*: Pre-payment double-spending detection, global
   database interlinking, and ZKPs remain in place, ensuring 0%
   double-claiming fraud and 99.9% privacy.
   - *Policy Solution*: Collaboration with the World Bank’s ID4D initiative
   enables inclusive ID issuance, using alternative proofing (e.g., community
   introducers) and birth registration to provide PHCs to undocumented
   individuals.



*Scenario 3: Decentralized Interlinking (99.99% Privacy, <0.0001% Fraud)*

   - *Description*: The RUBI system replaces the centralized database with
   a blockchain, storing cryptographic commitments for PHCs, enabling
   decentralized interlinking while maintaining pseudonymity via ZKPs.
   - *Problem*: Centralized databases are vulnerable to breaches, so a
   blockchain is used, but an individual forges a PHC from a non-participating
   region, claiming RUBI twice, as the region isn’t interlinked (1 in
   1,000,000 claims, 0.0001% fraud).
   - *Technical Solution*: A blockchain stores cryptographic commitments
   (hashes) for PHCs, enabling decentralized interlinking. ZKPs and blind
   signatures maintain privacy and security.
   - *Policy Solution*: Decentralized governance protocols encourage
   regions to join the blockchain network, ensuring global uniqueness.



*Scenario 4: Regional RUBI Currencies (99.999% Privacy, 0% Fraud)*

   - *Description*: The RUBI system introduces regional currencies (e.g.,
   UnityRUBI, EuroRUBI) for participating regions only, using decentralized
   interlinking to ensure uniqueness, with ZKPs for pseudonymity.
   - *Problem*: Non-participating regions allow fraud, but excluding them
   prevents this, achieving 0% fraud, while raising fairness concerns—an
   honest resident from a non-participating region can’t claim RUBI.
   - *Technical Solution*: Decentralized interlinking with regional RUBI
   currencies ensures only participating regions issue RUBI, eliminating fraud
   from non-participants.
   - *Policy Solution*: Regional currency policies and phased global
   adoption start with participating regions, scaling as others join.



*Scenario 5: Enhanced Blockchain Security (99.9999% Privacy, 0% Fraud)*

   - *Description*: The RUBI system enhances blockchain security with
   rotating commitments, sharding, and ZKP audits, maintaining regional
   currencies and decentralized interlinking for maximum privacy and security.
   - *Problem*: Blockchain vulnerabilities risk linking attacks (0.0001%
   privacy loss), where a hacker might correlate commitment timestamps to
   identify users, though this is mitigated by enhanced security measures.
   - *Technical Solution*: Rotating cryptographic commitments (new hashes
   per period), sharding identity data across regions, and ZKPs for audits
   reduce linking risks, enhancing blockchain security.
   - *Policy Solution*: Global privacy standards ensure consistent
   encryption; audit transparency policies prevent human leaks.



*Conclusion*

Scenario 5 offers the best balance: 99.9999% privacy, 0% fraud, using
decentralized interlinking, regional currencies, and enhanced blockchain
security. Remaining challenges include blockchain security (0.0001% privacy
risk), fairness for non-participants, and inclusion of undocumented
individuals. Scenario 2.2 addresses the latter through collaboration with
the World Bank’s ID4D, with ongoing policy efforts to ensure universal
inclusion.

Regards,
Nivas


On Fri, Mar 21, 2025 at 7:29 PM Manu Sporny <msporny@digitalbazaar.com>
wrote:

> On Tue, Mar 18, 2025 at 3:16 PM <nivas.cool@gmail.com> wrote:
> > I wanted to share an idea that intersects Self-Sovereign Identity (SSI),
> decentralized governance, and Universal Basic Income (UBI): Retroactive
> Universal Basic Income (RUBI). I have attached a one-page explanation of
> the concept, breaking down the mechanics.
>
> Hi Nivas, thank you for sharing this interesting proposal with the
> group. A few thoughts below on your ask of the community (how to
> engage more productively) and the concept itself.
>
> First, and most importantly, I commend you for thinking about societal
> problems and trying to propose something to fix some of the wrongs in
> the world. Many of us are here because we care deeply about the things
> you touch on in your proposed solution. It's coming from a good place,
> so keep going -- the world needs more people like you that are trying
> to fix fundamental flaws in local, national, and global society!
>
> Your ask of the community might be too broad to get a response. I've
> noticed that asking targeted, specific questions tends to get more
> responses than general "What do you think about this idea?" questions,
> which is what your email seems to be asking. In other words, you're
> asking people to do a lot of mental energy to grasp the very large
> concept and system you are presenting and then provide input on
> some/all of it. There are just too many moving pieces to analyze
> unless someone were to take a lot of time to sit down and think about
> it... and many of us just don't have the time to do that (unless some
> of us have been thinking about this problem for many years). So, you
> might try to be more targeted in your questions to the group -- focus
> on a very specific portion (like proof of personhood) and ask a few
> very specific questions.
>
> On to just some hot takes on your idea, I know a few of us have toyed
> with UBI and SSI, so this just so happens to touch on things I've been
> interested in for many decades now.
>

NS: Thank you for the super encouraging words, it motivates me to keep
going 😊. To be honest, I had this interconnected series of ideas, that I
did not know where to start or end. So, I spit it all out but thank you
Manu for dissecting the demon – now, I have a better understanding of where
the focused attention should be. From going forward (if required on a
separate email chain), we can focus on specific subtopics. Of course, open
to course correction suggestions.



>
> > RUBI is a framework that proposes a globally governed, open-source
> monetary system where:
> >
> > Personhood credentials (SSI-based) ensure UBI eligibility while
> preventing fraud.
>
> This part is do-able and interesting. The preventing fraud thing is
> key, and I don't think we have a good solution for it yet (but there
> is some hope in some of the newer advanced cryptography -- namely
> per-issuer/verifier pseudonyms).
>
> Keep in mind that there is no privacy preserving system that is also
> capable of fully eliminating fraud. Any proof of personhood system is
> guaranteed to have fraud in it and you will just have to accept
> that... it's "How much fraud are you willing to accept?" that is the
> key question. The next key question is: "How is your PHC system going
> to optimize for pseudonymity AND anti-fraud?"
>


NS: See detailed response above in new email body. (NS: Response 2 & 8 – On
Pseudonymity vs. Fraud Prevention)


>
> > Democratic governance enables citizens to vote on UBI rates and
> demurrage policies.
>
> Define "democratic". :) -- the form of governance matters immensely
> here. Do you mean American democratic? Or Scandanavian democratic? Or
> Chinese democratic? Or Indian democratic? The populations in some of
> those countries make some "strange" choices according to the
> populations in the other countries. It seems like you are going for a
> global solution when there is no "global culture"... different
> cultures and borders exist... how are you solving for that?
>
> If you want your solution to scale, the architecture has to take into
> account that there are different types of democracies, and more
> importantly, different types of cultures with some of them that are
> incompatible with the concept of UBI and others that will
> differentiate themselves by going away from UBI. Nation states and
> cultures compete with each other over long periods of time -- how is
> your system resilient to that?
>


NS: In my dream goal sense, for me ‘democratic’ would just mean humans of
any form, shape, colour, region. But, realistically speaking  ‘Democratic’
governance here involves citizens/ participants of the currency system
voting on UBI generation and demurrage rates regionally (if the scope of
the RUBI currency involved is regional) or globally (if the scope of the
RUBI currency involved in global), adapting to respective norms. Regional
RUBI currencies (Scenario 4) address cultural differences, as detailed in
the new body above.


I still want to re-iterate that these ‘RUBI’ currencies are private / open
source (nothing to do with official national currency systems). In other
words, they are complementary currencies as I would like to call them.
(Official Definition: A complementary currency is a medium of exchange, not
a national currency, that supplements or complements a national currency,
often used for specific purposes or within a defined community or region).
Depending upon the availability of SSI-personhood credentials for citizens
of different countries/regions (Bhutan , Europe , etc..),  unique RUBI
currencies can be rolled out for those respective countries/regions. It has
nothing to do with the government of that region.

Long story short, in an analogy: imagine everyone’s given a rotten apple
(respective national fiat currency) on random days on their plates. RUBI is
equivalent to placing a healthy orange on everyone’s plates — and leaving
it to people’s choices to decide adoption. Think more like a solidarity
economy — where value is created, shared, and sustained by the community
itself through circulation of RUBI currencies with each other. Possible
reason for accepting RUBI currencies would be that it would be the fairest
ones. Even in a game of monopoly, when the game starts, every player is
given equal amount of plastic money so the game is fair for all, RUBI aims
exactly that with the help of retroactive principles.

For the ones who want to understand the topic a bit more deeper of why our
current fiat monetary system  is brutally flawed (Especially how newly
created fiat money flows into the system) , I recommend this flash game
<https://positivemoney.org.nz/play-the-game/> on your computer (
https://positivemoney.org.nz/play-the-game/) to understand how commercial
banks work currently spoiling the world or by reading this survey report
<https://glocalities.com/news/press-release-global-population-does-not-want-commercial-banks-to-stay-responsible-for-creating-most-of-the-money>
(
https://glocalities.com/news/press-release-global-population-does-not-want-commercial-banks-to-stay-responsible-for-creating-most-of-the-money).





>
> > Retroactive UBI ensures individuals receive compensation based on their
> birthdate, correcting past economic exclusion.
>
> Sounds like you want to bankrupt entire nations. :P
>
> Remember that many nations are barely solvent, many keep large debts
> on their books, and with retroactive UBI, you're asking entire
> societies to take on a huge debt without explaining how all of that is
> going to be financed. This is probably the most critical part of your
> proposal that I cannot reconcile, and I have to go beyond suspending
> disbelief to just: "He will eventually figure out that there is no way
> that retroactive UBI can work from an economic perspective." -- I'd
> love to be proved wrong there, do you have links to any research in
> this area with positive outcomes?
>
> Most every nation that has considered "reparations" for past
> grievances has only agreed to them if they were defeated militarily
> (reparations being imposed on a defeated nation) or the population
> receiving the reparation was so small that the financial burden could
> be absorbed by the nation's workforce.
>
> In other words, people who have liquid assets (money) don't like
> giving those assets to other people unless there is a good argument
> for doing so. If forced to do so, by the larger population, they just
> move the asset to somewhere else that doesn't fall under the rules
> that say they have to hand the asset over. You will see wealth (and
> innovation) fleeing to whatever nation you want to impose your RUBI
> thing in... or it will be transformed into something that RUBI can't
> be applied to (such as physical assets)... and then to fix that, we
> venture into government seizure of assets "for the good of the
> people", which has a long and sordid history. I'll stop there, there's
> a lot written about this in the history books.
>
> What you might try, instead, is to focus on societies where there is a
> sort of UBI already in place -- Alaska's Permanent Fund, Saudi
> Arabia's Citizen Account Program, Finland's UBI experiment, Spain's
> UBI program, Kenya, Norway, etc.
>
> I'd say this is the most distracting part of your proposal, that might
> cause people to not respond to the email.
>


NS: I’d like to clarify a significant misunderstanding: my intention is not
to bankrupt nations but to promote equity at a human level through *organic*
wealth redistribution, without force or government seizures. As illustrated
in the earlier analogy, existing national fiat currencies (the “rotten
apple”) will coexist with RUBI currencies (the “new oranges”), introduced
as a complementary system without altering existing structures. Unlike
Bitcoin, which resembles strawberries distributed unevenly to a select few,
RUBI currencies are quality oranges allocated equitably to each
individual’s plate based on their birthdate, with quantities determined by
the number of days lived—a fair metric for wealth distribution. This system
anticipates a network effect—similar to Bitcoin—where RUBI currencies
gradually increase in exchange value as adoption grows, attracting
voluntary participation, even from those with significant fiat wealth, who
can trade to access new economic benefits, leading to organic wealth
redistribution over time. The long-term effect of RUBI adoption will create
an outcome as if RUBI had existed since inception, ensuring every living
individual receives RUBI continuously throughout their lifetime. The
detailed write-up for Scenario 4 explains the regional currency approach,
ensuring gradual implementation to address reparative concerns while
maintaining economic stability.



>
> > Interoperable and competing digital currencies operate with open-source
> governance to prevent speculation.
>
> Another herculean task... seeing as how just about every currency in
> the world, including all the new blockchain based currencies, have no
> escaped currency speculation... what are you going to do that's
> different here?
>


NS: I appreciate your point and acknowledge that my phrasing—“prevent
speculation”—may have been an overstatement. My intention was to minimize
volatility and speculative trading, ensuring RUBI currencies function as a
stable medium of exchange for UBI rather than a speculative asset. RUBI’s
design, with birthdate-based distribution and regional currencies (Scenario
4), reduces speculative incentives by tying value to equitable utility, not
market sentiment. Open-source governance (Think every participant of RUBI
voting on their mobile app for the respective RUBI currency app, the UBI
generation rate and demurrage rate) further promotes transparency and
stability, discouraging price manipulation. While some speculation may
occur, as with any currency, the phased regional approach detailed in
Scenario 4 aims to foster organic adoption and value growth, aligning with
RUBI’s fairness goals.


>
> > I would love to hear your thoughts on any aspect of this concept,
> whether from a technical, governance, economic, or interoperability
> perspective.
> >
> > The feasibility of integrating SSI-based personhood verification into
> such a system.
>
> Feasible.
>

NS: Thank you for the positive encouragement



>
> > Political possibilities of making such a system come to reality.
>
> Next to zero possibility for your current proposal. You are trying to
> solve three of the hardest problems of the last several hundred years
> simultaneously.
>
> Props for shooting for the stars, but you have to figure out a way to
> propose something that is scalable from something small to something
> big. How are you going to hit scale with your proposal?
>

NS: I deeply appreciate your candid assessment and recognize the immense
challenges in addressing global identity, decentralized governance, and UBI
simultaneously. While I believe RUBI’s vision is achievable over time, I
feel we can be committed to taking incremental steps to lay the groundwork,
ensuring the next generation (if not us itself) can build on this
foundation. Scenario 4’s regional currency approach starts small, accepting
initial limitations like dual citizenship fraud, and scales as regions join
the decentralized network, as detailed in the new body above. I’d value
your critical feedback on the specific technical and political roadblocks
you foresee, and whether this phased approach alters your perspective on
RUBI’s feasibility. Your insights will help refine this vision for
long-term impact.


>
> > Design considerations for privacy.
>
> The PHC thing is probably the only place that privacy comes in -- how
> are you going to combat sybils in the system?
>
>
NS: Detailed response above in new email body already explains this. (NS:
Response 2 & 8 – On Pseudonymity vs. Fraud Prevention)


> > Potential alignment with existing decentralized identity frameworks or
> monetary governance models.
>
> DIDs and VCs can play a part in what you're trying to do, but your
> biggest issue isn't the technology... it's the fundamental economic
> and governance problems you're trying to tackle.
>


NS: I’m hoping my Public Policy Masters at Georgetown equips me to tackle
those non-technological challenges—though I might need more than a degree
to solve these fundamental issues! 😊 On a serious note, I believe the W3C
CCG’s diverse network of experts across nations and industries is uniquely
positioned to address these economic and governance challenges
collaboratively. The scenarios in the new body above (e.g., Scenario 4’s
regional currency approach) aim to provide a starting step towards a final
logical design for RUBI, starting small to address economic feasibility and
governance incrementally. I’d welcome the community’s insights to refine
this framework and make RUBI a reality.


>
> > Broader implications and challenges of a retroactive UBI approach within
> a decentralized ecosystem.
>
> I've highlighted some of these above, and I hope it's not
> discouraging. Keep at it, we'll try to help as much as we can. The
> hardest problems you're trying to address aren't technological in
> nature, they're related to governance and economics -- but that's just
> another form of engineering; social engineering, and there can be a
> strong connection between technological engineering and social
> engineering.
>
> I hope that provides some of the feedback that you were hoping for
> Nivas. Don't be discouraged by it, as I said, you are trying to solve
> very important societal problems and that is commendable. :)
>
> -- manu
>
> --
> Manu Sporny - https://www.linkedin.com/in/manusporny/
> Founder/CEO - Digital Bazaar, Inc.
> https://www.digitalbazaar.com/
>
>

NS: Your feedback has been incredibly helpful—I’m encouraged to continue
this work till arriving at its logical conclusion.