Blockchain identities makes the most sense since the identity can be non-custodial and also tied to finances/payments intrinsically (can use stablecoins or nati

Blockchain identities makes the most sense since the identity can be non-custodial and also tied to finances/payments intrinsically (can use stablecoins or native crypto for payments) and there's already some proliferation of web3 wallet providers. You can trivially implement DIDs on-chain for example https://github.com/uport-project/ethr-didand https://github.com/uport-project/ethr-didand have various levels of centralization and authentication, and then you can also use things like soulbound tokens (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4105763 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4105763) or on-chain activity to further correlate someones identity in a more decentralized way. For scale, you can use a layer 2 chain to batch transactions off-chain. And then you can go further and implement zero knowledge proofs to keep identities private but attestations public.