To be clear, the identity server is an _entirely separate_ service that provides a single feature only: the ability to look up someone's Matrix ID from their phone number or email address, if they've added it to the server. Why is it a thing? Because nobody has yet figured out a way to do it decentralized (no, DHTs don't solve the issue of verified ownership). I think maybe they just shouldn't have a thing that scares people this much, even if it's harmless and possibly useful to someone.
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