Can anyone see any way to make this work, without tying coin creation to true identity? Maybe some sort of "proof of work by a real human"?
I don't understand why tying coin creation to true identity is a problem if you are trying to provide free income to individuals. There is no reason that you could not provide basically a faucet of Bitcoin to registered addresses that in fact are tied to a person.
You could even make the private keys public but add another usage validation for public coins, lets say a physical key that you get from the government.
I actually had the crazy idea that Satoshi should do something like this with his million of bitcoins. He could both create incredible hype around Bitcoin by starting to give them away in a methodical fashion and with some implementation that benefited those that truly need it.
For sustainability, Bitcoin could implement a VAT tax to every txn that follows some complex progressive algorith. The VAT tax would replenish a government address which then trickles payments to registered bitcoin addresses.
Anonymity while a feature of Bitcoin is meaningless drivel when solving the worlds problems.