The moment private entities can avoid spending money on auth and anti-sybil, they will simply default to using the government IdP, because auth is hard and fixi

The moment private entities can avoid spending money on auth and anti-sybil, they will simply default to using the government IdP, because auth is hard and fixing exceptions is expensive (CSRs, etc). Then, you will simply have to provide full government ID to every business for every transaction. Instant surveillance state (given that they can access all business records). This is not a world in which you wish to live. It is very important that you be able to transact without ID.