What you are alluding to is called "DIDs" = "Decentralized identifiers" (see https://en.wikipedia.org/wiki/Decentralized_identifier).
The idea of most of these methods is that you identify yourself using a private key, while a public key is spread throughout the network.
If you want to log into a server on that network, the server would "challenge" your identity by encrypting something (e.g. a random number) using the public key, which you, the holder of the private key, can then decrypt and send back to prove you are who you say you are.
This method is already standardized by the W3C, but only has been for less than a year. You also have to keep in mind that all federalized social network systems (such as lemmy and kbin) are still in early development.
You can use keepassXC and "self-host" your passwords on any cloud-storage you want (it's just a file after all), but if you are using 1Pass at the moment, I don't see an opt-in anonymized telemetry system as a reason to switch.