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First things that come to my mind are privacy problems. This autocomplete would make it really easy to find out whether a person uses the service. (dating sites, porn sites, torrent sites, political sites,....). Additionally if the ologin happend only via the mail address, you could collect email addresses very easily from many websites.

Anyway, I like the idea of questioning the current way of user authentication!

There's always the argument that the register process leaks the same data. But having it appear in a dropdown makes it easier to incidentally see someone you might know.

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