A blockchain address establishes that someone holds a private key. Everything people want identity to do beyond that has to be constructed on top, and each addition creates a problem of its own.
An address is a capability, not a person
Control of a key permits signing. It carries no information about who is signing, and the same person routinely holds many unconnected addresses.
Keys are also transferable, so anything granted to an address is granted to whoever holds the key at that moment rather than to an individual.
Any identity system therefore has to attach claims to an address and decide what happens when the address changes hands.
Public records make claims permanent
Writing an attestation to a chain makes it visible to everyone forever, which is unhelpful for anything a person would not publish deliberately.
Even innocuous claims accumulate, since combining several partial facts about an address narrows down who controls it far more than any one of them does alone.
Designs therefore keep the claim off chain and publish only a commitment, so the holder decides who sees the underlying detail.
Revocation is the awkward requirement
Credentials expire, get withdrawn, or turn out to have been issued in error, and a verifier needs to know the current status rather than the original assertion.
Publishing a revocation list on chain works but reveals which credentials were withdrawn and when, which leaks information about the holders.
Cryptographic accumulators and short-lived credentials both address this, at the cost of complexity that ordinary applications have to implement correctly.
Proving a property without revealing it
Most checks need one fact rather than a document: that a person is above an age, resides somewhere, or belongs to a group.
Zero-knowledge proofs allow that single fact to be demonstrated without disclosing the credential it came from, which limits what the verifier learns.
The proof still depends on an issuer the verifier trusts, so the trust has been narrowed rather than removed.
Recovery conflicts with self-custody
A person who loses their key loses every credential bound to it, and there is no authority able to restore an identity that only ever existed as a key.
Social recovery and account abstraction reduce that risk by allowing a designated group to reassign control of an account.
Each such mechanism gives someone the ability to take over an identity under defined conditions, which is exactly the authority these systems were meant to avoid granting.