We will soon reach the anniversary of my DF + blinkie:
- still working perfectly
- has no “solid base”
- implanted in a region which sees a lot of stress on a daily basis
I still think that the LED nails, on their own, won’t fail for stress related reasons. (may still fail for other reasons. that’s why I’m keeping mine on hold for an year with regular tests)
The main thing I believe caused us to see so many LED nail fails was the base for the FlexNeXT/similar, which would force them in ways they wouldn’t be forced on their own.
Targeting a single bit with a field might prove very challenging.
But we do have Hall Effect Switches, which might do what you’re trying to achieve (I think)
Oh, that sure changes things!
The LED nails I was mentioning are about 1cm in diameter.
I can’t even think of any “ready-to-convert” LED output which is 1mm wide (larger than that and you probably can’t arrange them in a convincing circle shape. 2mm LEDs inside 1cm diameter will give you a wobbly diamond pattern at best)
It’s doable, but would require some hardcore custom work such as @PaulT 's custom work:
Which is on the making for quite a while now… so maybe Soon™ 
Also another issue to consider, just expanding on what @DonFire already pointed out very well, is that some colours will cross skin better than others. So to have a homogeneous looking rainbow you’ll also want to pump some colours to the max, while holding some others back a bit.
That said, I do love your idea! 
says the creep currently sporting rainbow hair