I like the goal and don't like sharing my ID online. I'm simply not sure how this would work - suppose I need to send my passport somewhere (such as an online visa application), what expectation is there that the visa office would accept a redacted passport?

Other companies have recently started wanting ID verification; I would love to send a redacted form, but why would we expect they would accept it? Not reject it as unrecognised / invalid?

I wonder instead if you could have some kind of signature where you redact, but the redaction includes some kind of signature of the original; the redacted one is not just visual but is a signed package created by your company intended as a shareable digital ID format. Then, you'd work with various ID verification services to accept your package format.