Bitcoin UBI Client MVP with Threshold Social Recovery

1. Summary

BUBIWOT is a trust-minimized protocol that distributes Bitcoin-backed UBI tokens (BUBI) to real humans via IRL peer attestations that simultaneously enable threshold social recovery. In this MVP you'll be able to:

Create a pseudonymous account (keypair generated client-side, stored via WebAuthn/biometrics)
IRL Attest other users' accounts via QR/NFC pairing (dual-purpose: UBI verification + key fragment exchange)
See your cumulative BUBI allocation, accruing at a fixed rate (e.g. 3% annual inflation)
Incrementally decentralize your account security through threshold cryptography
Socially recover lost accounts via trusted peer collaboration

This MVP proves the core primitives for a censorship-resistant identity layer, social recovery system, and Bitcoin-backed UBI economy.

2. MVP Objectives

Proof-of-Human Onboarding
- Client-side keypair generation
- Biometric-gated private key via WebAuthn/passkeys
- Progressive decentralization: start with single device, upgrade to threshold security
IRL Peer Attestations (Dual Purpose)
- UBI Verification: Sign attestations for others' humanity/uniqueness
- Key Fragment Exchange: Generate and exchange threshold signature shares (FROST/Shamir)
- Store attestations in shared off-chain database (PostgreSQL/IPFS)
UBI Allocation Engine
- Daily allocation of BUBI tokens per verified account
- Inflation schedule: 3% APR, prorated per second
- Account Activation: deposit Bitcoin to unlock spendable BUBI
Threshold Social Recovery
- Incremental Guardian Addition: add trusted peers over time
- Flexible Thresholds: 2-of-3 initially, expand to 3-of-5, etc.
- Key Rotation: seamlessly integrate new guardians without account recreation
Dashboard & API
- Next.js front-end showing BUBI balance, guardian status, recovery options
- REST API for attestations, allocations, and threshold operations

3. System Architecture

flowchart LR
  subgraph Client
    A[Next.js PWA] --> B[WebAuthn Keypair]
    B --> C[LocalStorage.Encrypted]
    A --> D[Dashboard UI]
    A --> E[QR/NFC Pairing]
    A --> F[Threshold Key Manager]
    F --> G[FROST Signatures]
  end
  subgraph Backend
    H[API Server Node.js]
    I[(Attestation DB)]
    J[(UBI Allocation Engine)]
    K[(Guardian Registry)]
    L[(Threshold Coordinator)]
    H --> I
    H --> J
    H --> K
    H --> L
    J --> M[(BUBI Ledger)]
  end
  subgraph Bitcoin Layer
    N[Lightning Network]
    O[Babylon Sidechain]
    P[Bitcoin Mainchain]
  end
  Client -->|1. Register/Attest/Fragment| H
  Client -->|2. Fetch Balance/Status| H
  Client -->|3. Activate Account| N
  H -->|4. Anchor Attestations| P

4. IRL Attestation Flow (Dual Purpose)

Step 1: Initial Setup

Generate Ed25519 keypair client-side
Store private key encrypted with WebAuthn
Register public key with backend

Step 2: First IRL Attestation (with Peer A)

Open app, tap "New Attestation"
Generate ephemeral pairing key → QR code
Peer scans QR, establishes secure local connection
Dual Exchange:
- UBI Attestation: Sign each other's pubkeys for humanity verification
- Key Fragment: Generate 2-of-2 threshold shares using FROST
Store attestation in backend, key fragments locally (encrypted)

Step 3: Second IRL Attestation (with Peer B)

Repeat pairing process with second peer
Threshold Upgrade: Rotate to 2-of-3 scheme
Now have: 2 guardians + original device key
Account Verification: ≥2 attestations = verified for UBI

Step 4: Account Activation

Deposit Bitcoin into Lightning channel or Babylon sidechain
Trigger threshold key migration (funds move to socially-recoverable address)
Original single-device key archived/deleted
BUBI Unlocked: virtual balance becomes spendable

Step 5: Incremental Decentralization

Add Peer C, D, etc. over time
Each addition rotates threshold (2-of-3 → 3-of-5 → etc.)
Flexible guardian management without account recreation

5. Identity & Attestation Records

Attestation Record (UBI Verification):

{
  "issuer": "pubkey_A",
  "subject": "pubkey_B", 
  "sig": "sign_A(subject||timestamp||nonce)",
  "ts": "ISO8601 timestamp",
  "attestation_type": "humanity_verification"
}

Guardian Record (Threshold Recovery):

{
  "account": "pubkey_primary",
  "guardian": "pubkey_guardian",
  "threshold_share": "encrypted_key_fragment",
  "threshold_config": "2-of-3",
  "sig": "sign_both(guardian_agreement)",
  "ts": "ISO8601 timestamp"
}

6. UBI Token Allocation

Virtual Phase: BUBI balance visible but not spendable
Activation Threshold: ≥2 attestations + Bitcoin deposit
Inflation: 3% APR, continuous minting
Distribution: equal allocation per verified account
Spendability: Lightning/Babylon integration for real transactions

7. Threshold Social Recovery

Recovery Scenarios:

Device Loss: Guardians collaborate to sign recovery transaction
Guardian Loss: Remaining guardians help rotate threshold
Compromise: Emergency key rotation with guardian consensus

Recovery Process:

User initiates recovery from new device
Proves identity to threshold of guardians (IRL/video/etc.)
Guardians collaboratively sign recovery transaction using FROST
New device key replaces compromised key
Threshold rotated to include new key

8. Security & UX Innovations

Progressive Security: Start simple (single device) → upgrade to threshold
IRL-First: Physical meetings create strongest attestation bonds
Dual-Purpose Meetings: One IRL interaction serves both UBI + recovery
Flexible Thresholds: Adapt security model as social graph grows
Bitcoin-Native: FROST signatures work directly with Bitcoin/Lightning

9. User Journey

Phase 1: Solo Start

Install PWA → generate keys → basic UBI accrual (virtual only)

Phase 2: First Guardian

Meet friend IRL → mutual attestation + key fragment exchange
Still single-device control, but recovery option exists

Phase 3: Account Activation

Second IRL attestation → verified status
Deposit Bitcoin → unlock spendable BUBI
Threshold security activated (2-of-3)

Phase 4: Network Growth

Additional IRL meetings → more guardians
Stronger threshold security (3-of-5, 4-of-7, etc.)
Richer social attestation graph

10. Technical Stack

Cryptography:

FROST (threshold Schnorr signatures) for Bitcoin-native recovery
Shamir's Secret Sharing for flexible key fragmentation
Ed25519 for attestation signatures
WebAuthn for biometric key protection

Infrastructure:

Next.js PWA with offline capability
QR/NFC for secure local pairing
Lightning Network for micropayments
Babylon for programmable Bitcoin contracts
IPFS for decentralized attestation storage

11. Roadmap Integration

MVP (Current):

IRL attestations (dual-purpose)
Virtual BUBI accrual
Basic threshold recovery (2-of-3)

Phase 2:

Lightning integration
Spendable BUBI tokens
Advanced threshold management

Phase 3:

Babylon smart contracts
On-chain attestation anchoring
Cross-chain UBI distribution

Phase 4:

Reputation-weighted attestations
Automated threshold adjustments
Global UBI network effects

12. Unique Value Proposition

This merged approach is genuinely novel:

vs. Existing Social Recovery (Argent, Casa, etc.):

IRL-First: Physical attestations create stronger trust bonds
Dual Purpose: One meeting serves both UBI verification + key recovery
Bitcoin-Native: FROST signatures work directly with Bitcoin/Lightning
Incremental: Add guardians over time without account recreation

vs. Existing UBI Systems:

Cryptographic Sybil Resistance: Threshold attestations prevent fake accounts
Self-Sovereign: No central authority controls distribution
Bitcoin-Backed: Real economic value, not just social tokens

vs. Traditional Wallets:

Progressive Decentralization: Start simple, upgrade security incrementally
Social-First: Recovery through trusted relationships, not seed phrases
UBI Integration: Account security directly tied to economic participation

13. Conclusion

By merging UBI attestations with threshold social recovery, BUBIWOT creates a unique system where every IRL interaction serves dual purposes: proving humanity for economic participation AND building cryptographic social safety nets.

This approach solves multiple problems simultaneously:

Sybil-resistant UBI through physical attestations
User-friendly recovery through trusted social relationships
Progressive security that grows with your social network
Bitcoin-native implementation using FROST threshold signatures

The result is a trust-minimized protocol that makes Bitcoin-backed UBI both economically sound and socially recoverable—laying the foundation for a truly decentralized basic income system.