This can’t work because it creates a market for people that have an ID that cleared gates to lease/borrow to those that can’t.

It cannot work *perfectly*, but unlike most crypto stuff, it doesn't have to (at least, that part doesn't need to). It's a social/political problem, not a technical one.

The goal doesn't even need to be to make a completely perfect, impossible to circumvent, barrier for all minors; all this needs to do is just make it equally difficult for a minor to get adult (for whatever definition thereof) content online as it is to get tobacco or alcohol or gambling in real life, the hard part being to do so without compromising privacy, privacy being the bit which has to be done perfectly.

And the verification systems rushing at us are immune to this?