Decentralized auth is a fascinating technical rabbit hole, but it introduces a massive friction point for your first 1,000 users. For a new, unproven project, credibility is your biggest bottleneck, not decentralized storage.
By building your own complex auth/privacy stack, you are asking users to trust you to get the crypto right—which is a huge leap of faith.
A more pragmatic approach: Outsource the trust. > Use 'Sign in with Google/Apple/GitHub.' You leverage their multi-billion dollar security infrastructure and their existing trust relationship with the user. It provides immediate convenience (one-click onboarding) and shifts the perceived privacy liability to a known entity.
Don't spend your innovation tokens on auth. Spend them on the core value of your information exchange. You can always 'decentralize' the back-end later once you have enough users to actually make it matter.