Comment by hakfoo

I think there's a reasonable case that identity is a 'natural monopoly'.

If we end up with multiple pluggable third parties, what happens when they disagree? There's inevitably going to be data sync issues, and the risk of having an "extra" ID provider lying around that contains bad data, or is simply compromised at the authentication level, is enormous.

So we really want to pick one standard. Given that, a federally backed service has the least hostile incentive structure:

* It would be subject to very strict rules about universal service. I suspect there are going to be private players, and even some more reactionary states, who might try to sabotage industries by denying them identity data. (We see this in payments already, where a lot of firms really don't want to go near porn and guns)

* It doesn't have any reason to look for auxillary revenue. Having it store more data than necessary, or sell it to third parties, becomes politically radioactive rather than good business.