> The government cannot stop this credential from being used except by physically confiscating it or by waiting (years) for it to expire
This is not true. Government agencies generally look up your ID as necessary to check if it's still valid.
Stopped for speeding? The cop is going to look up your driver's license.
Leaving the country? They're running your passport number.
Starting a job? They're checking the status of your SSN.
The physical ID is good enough for low-stakes stuff like renting a car with a driver's license, or proving your age to get into a bar. But it's already not trusted on its own for any of the serious stuff you're talking about, like where you can reside and work.
The physical card is sufficient to prove you have permission to drive. This code is for them to check how many points you have on your licence and what for. There used to be a paper counterpart to the card which showed this which they withdrew a few years ago.
In reality I've never been asked for the code when renting cars (outside the UK), the physical card seems to generally be sufficient for the hire companies.
This is not true. Government agencies generally look up your ID as necessary to check if it's still valid.
Stopped for speeding? The cop is going to look up your driver's license.
Leaving the country? They're running your passport number.
Starting a job? They're checking the status of your SSN.
The physical ID is good enough for low-stakes stuff like renting a car with a driver's license, or proving your age to get into a bar. But it's already not trusted on its own for any of the serious stuff you're talking about, like where you can reside and work.