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Digital Identity: The Representation of Our True Identity
When considering our identity, we tend to concentrate on tangible aspects such as our names, addresses, and birthdates. Yet, this is only a fraction of who we truly are. Our digital ID goes way beyond these basics, into the essence of who we are as individuals.
Identity represents who we truly are—it captures our beliefs, political views, relationships, and interactions with the world. It goes beyond credentials like proof of name, address, and nationality and covers the footprints and activities that mold us into the individuals we are today. We refer to the digital representation of this complex concept as digital identity.
Digital Identity and The Online Landscape
Digital identity or Digital ID is like a digital passport for accessing the online world, including e-commerce, medical services, tourism, banking, and more. It is the preferred identification method in the online landscape.
According to a Juniper Research report, the number of users adopting digital identity will increase by more than 50% over the next few years, from 4.2 billion in 2022 to 6.5 billion in 2026. While digital identity is not physical (in the form of printed documents), it offers the same proof of authenticity and is sometimes more secure and verifiable than traditional means of identification.
What Is a Digital ID?
A Digital ID is the electronic version of an individual’s identity, represented through a unique set of data online. It covers a wide range of personally identifiable information, such as names, addresses, email addresses, browsing histories, social media profiles, and online purchase histories. Digital ID serves a key role in identifying and tracking an individual’s online activity, as well as verifying their identity and facilitating access to specific services and applications.
Benefits of Digital IDs
Digital IDs offer several benefits for both individuals and organizations, including:
- Enhanced Security: Digital IDs provide a more secure experience for users’ personal data.
- Efficiency: Digital IDs speed up the process of identity verification, making it faster and easier to access online services and products.
- Reduced Identity Theft: Authentication through digital IDs reduces the risk of identity theft.
- Streamlined Access to Services: Filling out personal information repeatedly across different websites and applications during registration is a huge fatigue that digital IDs eliminate. Users can now easily “plug” their data into different platforms and have direct access to products and services through digital IDs.
- Reduced Password Fatigue: Similar to the above point, users often face the stress of logging into various websites and applications. This leads to the burden of remembering numerous passwords for different sites and services. Digital IDs removed this burden.
- Cross-Platform Compatibility: Many digital ID systems work across various online platforms and services, creating a seamless user experience.
- Privacy: Users can choose which data they share, with whom, and for how long.
The above are a few of the benefits of digital IDs. These benefits aren’t limited to individuals; organizations and businesses also benefit greatly from them. Some government agencies are also leveraging this technology to make government services and citizen benefits more accessible.
What Is a Digital ID Wallet?
In short, a Digital ID wallet is simply a tool that stores digital ID. It keeps your personal information safe from hackers by securely managing your identity, online presence, and digital data. Digital wallets are easy to use, as they can be easily accessed on smartphones and through web applications for PCs (and other similar devices).
With digital ID wallets, users can have access to their personal information and credentials globally without the need to carry physical documents around. They can also share any of their credentials with a third party while retaining control of access, as opposed to the traditional means of credential or data sharing. In other words, the owner controls who can access the data, for how long, and with whom it can be shared. Furthermore, digital ID wallets can help reduce bureaucracies and administrative delays around traditional identity verification procedures.
Digital ID vs. Digital ID Wallets
Digital IDs serve as the cornerstone of identity verification in the digital world, confirming an individual’s identity in online environments. Complementing this, digital ID wallets act as secure and user-friendly tools for managing these digital credentials, ensuring that personal identity information is both accessible and protected.
- Purpose: Primarily, digital IDs establish and verify one’s identification in the digital world. Personal information, credentials, and even biometric data are all part of a user’s digital ID.
- Authentication: Digital IDs are used to verify one’s identity when signing into various online platforms. Biometric information, digital certificates, and other forms of authentication can contribute to a user’s digital ID.
- Banking and Online Transactions: Security is very crucial to banking platforms to avoid intruders in their systems. Digital ID allows banks and financial platforms to enhance security. They can employ multiple authentication methods to verify a user’s identity through their digital ID.
- Privacy: Digital ID, especially if built on decentralized networks, is a breath of fresh air away from centralized control over users’ personal data. Also, it saves users from overexposure of their personal data, which occasionally happens through traditional mediums of identity verification.
- Security: Digital ID is a technological development that primarily depends on decentralized infrastructure. This makes it more secure, thereby reducing identity theft and unauthorized access to personal information.
Digital ID Wallets:
- Purpose: A digital wallet stores various types of digital assets, which include users’ identity credentials, such as passport information, driver’s licenses, student IDs, online footprints, financial assets, loyalty cards, insurance details, medical cards, membership cards, and more. The primary purpose of this wallet is to house these details and provide a secure and convenient way to access and share them for identity verification purposes.
- Encryption of Data (security): To prevent unauthorized parties from accessing information stored within a digital wallet, developers commonly employ encryption. They encrypt the wallet’s contents, ensuring that only those with the correct decryption key can access the information.
- Access Control: Using multifactor authentication, biometric authentication, and others, users have total control over who can access their digital IDs. Users have the ability to manage not just access but also the terms under which they share their personal data. They can set these conditions for any third party or requesting entity through their digital wallets. With a digital wallet, they can decide the “level of access” a requesting party will have at any given time when a credential is shared.
The Future of Digital ID
Digital ID fundamentally shapes our increasingly connected world. It transcends its role in applications and platforms and is on course to reshape our web interactions and experiences in the coming years. As it already begins to influence various sectors, we expect digital ID to revolutionize several key areas:
Blockchain Technology: Blockchain and distributed ledger technology (DLT) are the foundations on which most digital IDs are built. These two technologies will continue to play a vital role in the future of digital IDs, making them more secure and transparent. Simultaneously, they will enhance users’ control over their personal data.
Decentralization and Self-Sovereign Identity (SSI): SSI models are gradually gaining traction. As digital IDs become more prevalent, the concept of SSI will gain even more ground, providing users with absolute control over their data and reducing the power of centralized identity providers.
As digital IDs continue to expand, we anticipate their integration across various sectors, transforming key aspects of our daily lives:
- Secure Voting Systems: Ensuring the integrity and security of electoral processes.
- Healthcare and Telemedicine: Streamlining patient identification for more personalized care.
- Banking and Finance: Enhancing security and simplifying customer access to financial services.
- Smart Cities: Building interconnected services for urban living.
- Internet of Things (IoT): Safeguarding device networks with robust identity verification.
- Metaverse: Providing reliable user authentication in virtual environments. Learn more about digital identity in the metaverse.
- Education and Online Learning: Offering secure access to educational resources and credentials.
- Governmental Services: Governments, such as those in India, Estonia, and Queensland, are pioneering the use of digital IDs to streamline services.
Our digital identity extends beyond mere identification to include our beliefs, relationships, and online interactions in the digital world. It is our “digital passport” to the online world.
Across industries such as e-commerce, healthcare, and financial services, digital IDs are redefining access to services. Future applications of digital identity will go beyond just individuals. Businesses and governments will harness this technological breakthrough on a larger scale.
As an organization, we are strongly committed to creating a user-centric internet where users have control over their data. Interestingly enough, that’s exactly what digital ID aims to accomplish. Identity.com continues to contribute to this future through identity management systems and protocols. We also belong to the World Wide Web Consortium (W3C), the standards body for the World Wide Web.
The work of Identity.com, as a future-oriented company, is helping many businesses by giving their customers a hassle-free identity verification process. Identity.com is an open-source ecosystem providing access to on-chain and secure identity verification systems. Our solutions improve the user experience and reduce onboarding friction through reusable and interoperable Gateway Passes. Please refer to our docs for more information about how we can help you with identity verification and general KYC processes.