"There's a big issue with how Lemmy works, here's how I think decentralization should be approached instead."

Again, I feel like you're making the wrong point in the wrong place. My understanding is that you came to a project designed with the ideals of federation, and you complain that it shouldn't be federated. That should probably be done as a fork of Lemmy, or an independent competitor.

It seems to me like you're in ideological conflict with Lemmy's developers, where you see no value in what Lemmy seeks to create. That's completely fine, of course, but I really feel like you're making your case in the wrong place.

Having terabytes of information possibly disappearing because one person gets in a car accident on their way to work isn't an improvement vs a centralized system hosted on AWS.

Federation does not mean terabytes of information disappearing - to my understanding, posts, comments and votes are already duplicated across the instances. What would be lost is ownership of communities/posts, and accounts created on that instance, as well as things like image posts where the images are stored on one instance.

However, if images weren't stored as links in those posts, accounts could be fully migrated, and communities could be migrated or even just federated with other communities, nothing would have to be lost.

Communities would be moderated by their creator, server admins could decide not to host content from any communities they don't want to host, if no server admin wants to host your community then you're free to host it on your own server or to fix the problems with it.

I feel like that structure wouldn't work, just looking at how much defederation is happening, server owners wouldn't want to be affiliated with certain content at all. It did also remind me of the fact that ActivityPub is not just Lemmy - you can also interact with mastodon and kbin on Lemmy, which is rooted in the federated approach.

There's illegal content on Lemmy right now, even instances that don't want to host it need to clean up their images folder because of it, so it's not as if the way it works right now is any better for that and it's not as if there's no instance admin ready to host that content.

True, I feel like the issue only gets worse as you blur the line between different instances more, but I have no data to back that up.

User credentials can be stored securely. Do you think your instance admin has a text file with your password written in plain characters?

I feel like you failed to address my point, that with the current security standard, data leaks are still considered a threat to your password security. Even in the best case, getting access to hashed passwords means being able to brute force it without any rate limits. Maybe I'm wrong, but you'd need to either prove that password hashes leaking are not an issue at all, or figure out a way to provide trusted decentralized authentication server architecture, or figure out a way to store the passwords where leaks are not an issue... Or give up on using passwords and require a different authentication method, like public key authentication.

The third credential I was suggesting is just one solution [...]. I'm sure much more intelligent people could come up with another solution.

It's a bit hypocritical of me, since I mentioned smarter people than me working on something, but I feel like if you're strongly suggesting Lemmy should be majorly reworked in this way, there's some expectation for you to provide a solution, not just say that somebody will figure it out.