First - Alcohol and cigarettes can just be resold too. The black market for them is effectively zero because the consequences for giving them to kids are severe and the room for meaningful profit is close to zero, same applies here.

Second - The codes would be priced on the order of magnitude of pennies per verification - think 10 cents or less, accessible even to low / fixed income folks without really making a dent in their budget.

Third - the proposal explicitly mentions a nonprofit running it as an option, and the idea would be that law codifies the method to be approved, not a specific vendor, so competitive markets could emerge, too. Would you argue that restrictions on the sale of alcohol are creating artificial winners in the private sector of alcohol manufacturing?

'consequences for giving them to kids are severe and the room for meaningful profit is close to zero, same applies here.'

I don't think it applies, the difference is that codes are digital and can be sold over the internet, anonymously, in a scallable manner.

I still like this solution because all the solutions I've seen have flaws and this one being so easy to explain makes it great to campaign for.

You're doing a huge logical jump in your first point. Alcohol and cigarettes are physical goods, digital ID is not, but you're proposing a system that turns it into a physical problem. I'm merely pointing out that's what you're doing and the issues with it.

Second, it doesn't matter what it costs, it's inconvenient and I already spent time (possibly money too) obtaining a government ID... on top of a theoretical mandate that says I need to show the ID on a bunch of websites.

Third, I'm not sure I follow your point on alcohol restrictions creating winners? The non-profit idea could potentially be good, but I'm not hopeful that real world legislation would be crafted that way.

EDIT: also more on #1 and "severe consequences" for re-selling... yes that's exactly what we want to avoid: creating more reasons to put people in prison and a bigger burden on law enforcement and the court system.