Mostly, it will because online identifies will be a market for lemons: there will be so many fake/expired/revoked identities being sold that the value of each one will be worth pennies, and that's not commensurate with the risk of someone commiting crimes and linking it to your government-registered identity.
If you sell your real-world identity to other people today, and they get arrested, then the police will know your identity (obviously). How does that work with a privacy-preserving scheme? If you sell your anonymous token that says that you are a human to a machine and the machine gets arrested, then the police won't be able to know who you are, right? That was the whole point of the privacy-preserving token.
I'm genuinely interested, I don't understand how it can work technically and be privacy-preserving.
With privacy preserving cryptography the tokens are standalone and have no ties to the identity that spawned them.
No enforcement for abuse is possible.
