[ybceo]

If I understand correctly, this is the flow you are describing :

1. You show your ID to a "trusted third party"

2. They cryptographically attest "yep, this person has valid government ID"

3. The service (Discord, Coinbase, etc.) only gets the yes/no assertion, never sees your actual docs

The third party would still have your documents. You've just moved the honeypot, not eliminated it. Discord's breach was through a third party. Signzy (a KYC provider) got breached. The whole article is about how third parties can't be trusted either.

[ggm]

You don't show your ID to a TTP you show a homomorphic function of your ID which doesn't leak your credentials and you have a second homomorphic function in the website to the TTP which doesn't leak what your verifying against.

2 and 3 are correct but 1 isn't. They don't get to hold reusable credentials about you, only a function in them which can be verified to show you hold the identity.