The credit card companies will charge you a fee to use credit cards as an authentication mechanism and using prepaid gift cards can get around this. You can buy prepaid cards in bulk. Other authentication schemes are too expensive. Even if you could make it free, it still doesn't keep people from indefinitely registering domain names they don't use. I might be convinced to along with free domain registrations if it wasn't a finite resource, but it is a finite resource. If I have a legitimate reason to use and own a domain, it's worth $100/year. Otherwise you end up with our current situation where $5/year domains have made squatting a feasible business model.

Well, then let's find a compromise. This new more anarchic system could come in parallel to the already existing one.

If you are a business or university you still follow the .com and .edu rules. If you are a broke student who doesn't want to pay for a domain or someone who is afraid of getting tracked/shutdown you can join the decentralized system. I doubt squatters would be too interested in getting those.

I suppose the .p2p thing they mention in the article must be something similar as a concept. They should just get another extension though because p2p sucks