You touched upon a potential major danger - citizens snitching on their neighbors for either fear or reward. It’s been done here already in both WW1 & WW2, against those suspected of being “German spies” in the former, and “food hoarders” in the later conflict. In both cases, the authorities came swooping in.
Food for thought. Not that there’s any comparison just yet, but during the Third Reich the Gestapo had no lack of volunteer snitches, while under communism the Stasi used coercion & blackmail to force citizens into spying on their own.
Government forces using informers to sow fear and distrust and therefore disunity amongst the citizenry, employ a weapon just as powerful as battalions of jackboots kicking in doors.
Yep reminds me of the old Yakoff Smirnoff joke. “Americans see the KGB as the government we see them as our neighbors”
That technique is already utilized by cops. I don't know how many times I've gone to jury duty and the prosecutor asks if anyone has problems with snitches.