I've thought about this, and had come to the conclusion that it would be too difficult for users to manage their private key. (Look at the flustercuck we've seen in cryptocurrency)

I wonder though, if we could choose to either manage our own private key OR let an instance manage it for us. This way, users could choose to give full control to an instance (as it is now) or to keep control themselves for extra security.

User data and public keys would still need to be stored (presumably on an instance server, though I wouldn't be against separating this duty into a separate server which may or may not be hosted concurrently with an instance). But at least this way, we would have the option to keep control over our accounts even if the instance is hacked.

It's... slightly more complicated than that, but it should be possible.

This was one of my early fears... that an instance might get offline, attacked, whatever, and that all your user data might be lost. It appears that a feature like this might be inevitable. Or at least a feature that would let a user to have at least 1 copy of his account on another instance.

There is also the DB and storage growth to consider if something like this is implemeneted. If all instances hold all data from every other instance, than that might turn into a shit show pretty soon. You can get away with a certain number of users on only one server, but after a certain threshold, you have to scale... and that costs a lot of money, which is a no go for smaller instances and they will probably shut down if they're forced to hold data for every user account in the fediverse.

Accounts aren't just posts/comments/votes. You have the communities you're following, settings, and other bits of private state (remembering what you've already read). You'd be in charge of preserving and lugging this data around.