Earlier quoted context omitted.
> If your identity is not transparent to me, I won't enter a relationship with you that requries me to know who you are, which in practice is almost every one. There are two things about this that don't require centralized identity. The first is that it's very commonly not true at all. If you want to sign up for an account for an online service (e.g. email, YouTube, gaming), they don't need the name on your driver's…
But again, in practice banks will loan more money more easily to those with a verified identity that has recourse beyond simple "loss of creditworthiness", so those loans will always be more appealing to those who can get them, and so nonrecourse loans never become a thing for normal citizens who can avoid them. And those who can't get shunted down into the "Payday Loan" tier of finance and they have to dig themselve…
The normal recourse is foreclosure of the asset (e.g. house) that the loan was made to purchase, which they don't need your name to do at all, only a way to identify the property they're taking as collateral.
> And those who can't get shunted down into the "Payday Loan" tier of finance and they have to dig themselves back out with the equivalent of deposit-backed credit cards.
That's where everybody starts anyway. You make a hundred bucks mowing lawns in high school or whatever and get a credit card like that. By the time you have the down payment for a house you have a credit history to go with it. Or you start out getting cosigned with your parents' credit history.
> But few people will choose a deposit-backed card when they have the option of trading identity for better pricing / convenience.
You're ignoring the benefit -- it's the equivalent of corporate limited liability. If you get a car loan and then some idiot totals your new car, that's the bank's problem now and they're the ones who have to deal with the insurance company instead of you. If you lose your job and your life gets messed up temporarily then you don't have to wait 7 years to start over.
And that's not even counting the privacy benefit.
Also, the best version is for centralized identity to cease to exist whatsoever (e.g. stop issuing people social security numbers or prohibit their use for anything but social security) and then people can't give up their centralized identity in exchange for magic beans because they haven't got one.