Leading questions:
Representative vs Direct Democracy?
Unitary or Federal?
Presidential or Parliamentary?
How much separations of powers should there be? In presidential systems, such as the United States of America, there is often deadlock between the executive and legislature. In parliamentary systems, the head of government is elected by legislature, therefore, there is practically no deadlock as long as theres is majority support of the executive in the legislature (although, there can still be courts to determine constitutionality of policiss). Would you prefer more checks and balances, but can also result in more deadlock, or a government more easily able to enact policies, for better or for worse?
Electoral method? FPTP? Two-Round? Ranked-Choice/Single-Transferable Vote? What about legislature? Should there be local districts? Single or Multi member districts? Proportional-representation based on votes for a party? If so, how should the party-lists be determined?
Should anti-democratic parties be banned? Or should all parties be allowed to compete in elections, regardless of ideology? In Germany, they practice what's called "Defensive Democracy" which bans any political parties (and their successors) that are anti-democratic. Some of banned political parties include the nazi party.
How easy or difficult should the constitution br allowed to be changed? Majority support or some type of supermajority support?
Should we really elect officials, or randomly select them via sortition?
These are just some topics to think about, you don't have to answer all of them.
Edit: Clarified some things
Oops I made a mistake there, I've corrected it now. from "some kind of decentralized software network any kinds of centralized authority" to "some kind of decentralized software network **without ** any kinds of centralized authority".
You raise valid points.
Regarding the issue of trust: the same argument you raise is one that people use against bitcoin, and for that matter what people used to say about debit cards and then online banking. That they would never trust a computer or a machine to securely store or transact their money. But debit cards, online banking, and even bitcoin are all implementations of technology, flawed as they may be, that achieve a degree of trust by fulfilling their promise.
Whether or not an individual person trusts bitcoin, for example, it doesn't matter how that person feels, the bitcoin network continues to fulfill it's basic promise of being a decentralized cryptocurrency where you can't fraudulently double-spend the currency and you can't fraudulently mint any currency, it is all maintained by unbreakable mathematics and vetted thousands of times over on many independent nodes. Bitcoin is not a perfect system but what it is is a network that has demonstrated that you can transact valuable digital information without needing a central authority of any kind, without needing to trust anyone at all, the trust is in the mathematics and the combined computing power of the network.
As for the issue of privacy: this is certainly an issue that would need to be solved but I don't believe it is unsolvable. As an example, Monero is a cryptocurrency that is similar to bitcoin but is privacy focused. Again it is not perfect but it does demonstrate that you can create a cryptographic design that can facilitate transactions privately while protecting the identity of the accounts.
The problem that this ideal, hypothetical network would solve, would be to not require the rigmarole of elections via paper ballot as all. Even if you had a perfectly accurate paper ballot election, part of the issue with that method is the sheer amount of time and resources involved in accurately tabulating and verifying hundreds of millions of votes. The amount of resources is so great that it makes it such that you only have an election or referendum every 2 years or every 4 years or some cadence like that, which is much slower than what a hypothetical decentralized computer network could achieve. Why wait 2 years if you could hypothetically generate a consensus within a few days or even hours in some cases.
Trust is very important in a democracy. Trust is what lets everyone know that the final tally is the majority opinion.
You can't just invent whatever voting system and say "I don't care if people trust it or not, they'll just have to deal with it".
For a currency system, that's fine, people can use another currency.
For an election system? You can't just ignore the fact that most people isn't knowledgeable enough to understand complex systems. If they don't understand it, they wont trust it, and they'd fear that their votes aren't being counted correctly, and that leads to the losing party/candidates making false accusations of election fraud and inciting revolt. And the party/candidate's supporters would falsely believe they are actually the majority and they'd eat up the lies being fed to them.
Remember those "dominion voting machine are rigged" narrative that conservatives tried to push. Those propaganda only gets worse the more computerized voting gets.
Mistrust in elections can lead to violence, such as the attack on the US Capitol Building on January 6th, 2021
But if you have a simple "paper ballot in a box" system, with election observers to make sure nothing fishy is going on. Most voters of the losing party/candidate would just accept the results, and any "rigged election" propaganda isn't as effective if the election system is so simple to understand. There'd still be people spewing conspiracy theories, but it would be much less when using a paper ballot system than with computerized voting machines.
You aren't wrong, trust is obviously very important.
What I am trying to describe is the emergence of an alternative system that people could choose to use based on its own merit, similar to how bitcoin has emerged. While many people still don't trust an idea like bitcoin, already many millions of people do trust it, and the aggregate value of all bitcoin is currently something like half a trillion USD because of this, because of the network effect, because many people do give value to it. As the years go on, as bitcoin continues to fulfill its basic promise of being trustworthy, of functioning as intended, more people will continue to trust it and use it because, while flawed, it promises a degree of inherent trust and functionality that is superior to the incumbent alternative fiat currencies that continue to lose more and more relative value every year due to irresponsibility and corruption of the central banks.
In this sense, a decentralized digital identity network would simply be a more functionally decentralized social network. The topic here is trust, and here we are in the fediverse because centralized for-profit social media companies are not preferred by people here, because of trust and other reasons. As the years go on, the experience of for-profit social media companies will have to compete with the experience of fediverse social media, and if fediverse social media is better, it will eventually emerge as a preferred viable alternative, and maybe even the predominant form of social media. People can choose to use it or not, but because of the network effect, as more people do use it, it increases its inherent value, which causes more people to trust it and use it, which continues to increase the inherent value, etc., until some thresholds are reached.
This would be true also of a hypothetical decentralized identity network. People could choose to use it or not, based on its merits. Many people would choose not to use it because they don't trust it. But, as it would continue to grow and evolve and improve, like bitcoin, or like the fediverse, a larger number of people would use it and trust it despite it being relatively niche, it would continue to demonstrate itself as a viable alternative. In such a scenario of emerging naturally by competing with the incumbent systems, it is not inconceivable that such a system could eventually surpass a threshold and become the predominant social network and identity system in the world, that also provides effective functionality of things like voting on issues.