Separating government identification from the state would be the correct solution, but it faces a fundamental dilemma that decentralized money does not. While money can function effectively on a peer-to-peer basis, an independent ID is useless unless it is accepted by governments -- and a sufficient number of them -- to be viable. Unlike currency, where a state cannot dictate or effectively enforce what private individuals accept as payment, governments maintain total control over which forms of identification they recognize. Because they hold the power to decide what is "valid," they will never voluntarily give up their monopoly on identity.
Separating government identification from the state would be the correct solution, but it faces a fundamental dilemma that decentralized money does not. While money can function effectively on a peer-to-peer basis, an independent ID is useless unless it is accepted by governments -- and a sufficient number of them -- to be viable.
Unlike currency, where a state cannot dictate or effectively enforce what private individuals accept as payment, governments maintain total control over which forms of identification they recognize. Because they hold the power to decide what is "valid," they will never voluntarily give up their monopoly on identity.