That looks closer to the right solution, but...

> Remember, your private key is your identity in Nostr, so if it is compromised you'll lose your followers and will have to start from scratch rebuilding your identity.

This is the same gripe I have with home servers on the fediverse: home servers come and go, and private keys sometimes need rotating. Making you lose all your friends and content when that happens is not an acceptable tradeoff.

I think the solution is entirely separating "identity" from every single other concern such as security (private keys), hosting (home servers), and public identity ("display name").