I'd disagree, how is identity handled at the moment? a record stashed in a database. Blockchain is essentially the same thing so why wouldn't it work in the same way?
It's never that simple for real humans, Wilson told El Reg: “Identity is not transactional. It's a means to an end, anyway, not the end – it's quite rare for someone to go around identifying themselves all day.”
We kinda do, all the time. When in person it's via our face, when on a computer system it's on almost every action we take.