Here’s Why Digital Identity is More Than Just a Digital Facade

How much of your personal identifiable information (PII) is available online? And how much of it is being used without your knowledge for unknown purposes?

Identity theft and data breaches are on the rise as the sophistication of nefarious players on the internet increases. This wave of cybercrime is leaving both individuals and organizations at great risk of compromise.

As a result, we need to begin looking for more innovative and secure identity solutions. Solutions that give individuals more control over their PII and eliminate identity mediators. Also, they should enable businesses to optimize process workflows while reducing costs.

Enter digital identity.

A digital identity is an electronic representation of an entity that enables accurate identification of this entity during online interactions. This electronic file may contain personally identifiable information such as date of birth, social security number, passport number, biometric data, etc.

With more and more people working online, the need for more secure, seamless, and reliable online interactions has grown.

Establishing a Greater Degree of Control

The biggest challenge with existing systems is the lack of control that entities have over their information and how it is used.

However, businesses still need to verify your identity as well as receive the information they need to provide a service. For instance, if you are applying for a loan then you’ll need to provide your social security number to the bank.

The latter will then proceed to do various background checks, and you have no control over what they may find. This is because your information is owned and controlled by other entities.

But, by using the platform that blockchain technology provides, digital identity will seek to address that. It gives you a user-centric identity that you control and can thus determine what information you share and when.

And when we consider the amount of recent data breaches that we have been witnessing, it is abundantly clear that better data protection solutions are needed.

Creating a More Secure Online Environment

When logging into various online platforms, we sometimes provide a lot more information than we should, and it often happens with individuals commonly using social media accounts to log in to websites.

This may be compared to when a retail outlet requests ID for an individual to purchase alcohol. Although it may be a necessity, that piece of identity may also contain your address, signature, and nationality — information that the store does not need to know.

Similarly, people end up providing websites with a wealth of information about themselves because of the current identity management systems. Using digital identifiers such as your email address or social media accounts to log in to various websites is a quick and convenient thing to do. But, the amount of vulnerable personal data that we are freely giving up is far too much.

This is why blockchain technology is critical. It accelerates decentralized identity models by providing a web of trust because people, organizations, and connected devices can share identities that they have created.

Moreover, since you retain control over what you share and when you’ll have little to worry about concerning data breaches, which means that you can use the internet with a lot more peace of mind.

How It All Works

A few key things that are necessary to make the digital identity concept a success are the same things that have made crypto such a success. Trust and convenience.

Because transactions are processed by a network of computers that must confirm every transaction in the chain, blockchain technology transactions are immutable.

As such, it is impossible to go back and modify transaction records.

Therefore, you have a solution that is not only convenient but can guarantee users’ privacy and data security.

So how do you use it?

The idea is to simplify things so you can start by installing an identity wallet app on your mobile device, for example. This wallet aims to store a private key that you can use to log in on various platforms.

Next, you can then take the public key associated with that private key and publish it on a blockchain. In response, you will then receive a unique DID that is generated by the ledger.

Since the private key holders the only individual who can use this unique DID, it creates a highly secure identity solution.

With your unique DID, you can now log in to an online platform to visit the public ledger to verify this identity.

More Than a Digital Facade?

The digital identity model guarantees users far more security than any centralized infrastructure. We only have to take a look at the Indian government ID database, Aadhaar, as an example. This platform reportedly suffered multiple breaches that potentially compromised the records of all 1.1 billion registered citizens.

On the other hand, the decentralized identity concept enables users to retain control over their personal information and share it how they want.

Furthermore, this model also simplifies things for businesses because it can reduce the costs involved in verifying information. Users keep verified information in their identity wallets, and this information is authenticated by certified issuers.

This provides an easy-to-use, secure process for individuals and organizations alike that essentially eliminates the risk of data breaches and the worry about what businesses are doing with client data.

It also gives both users and verifiers a reliable identity solution that is more than just a digital facade. These days, a simple internet search can show you countless ways to create the ideal digital facade. But, with a digital identity, entities that you interact with will receive what you create and what is verified by certified issuers.

When you have a platform where data cannot be modified and is independently verifiable, it gives the interacting entities a reliable solution that mitigates the risk of interacting with virtual avatars.

An Evolving Technology

Concerns over data privacy and abuse of client information mean that identity issues remain a major challenge. In addition to the Aadhaar situation, the Equifax and Cambridge Analytica security breaches further highlighted the importance of the need for a decentralized identity model.

Although regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Protection Act have been enacted, consumers still remain skeptical. As long as your personal data is not in your control, you are still vulnerable.

A digital identity can give users a sort of ‘virtual pseudonymity’ that comes in handy with all kinds of private transactions such as online purchases or hailing an Uber. Only the necessary information is provided for these transactions, and you also have the ability to revoke access.


Our changing environment requires us to look for holistic solutions to identity management that encompass identity, security, and privacy. We need solutions that will place personally identifiable information under the control of the individual.

This is what the new type of digital identity aims to achieve through blockchain technology. As an alternative to the existing centralized and federated infrastructures, this solution enables individuals to manage their own identities. By leveraging a decentralized framework, the user receives credentials from several issuers and stores them in a digital wallet.

Whether it is due to human failure or technological issues, we can see that a centralized architecture is vulnerable to breaches. Blockchain technology helps us to address these issues. It makes our identities easy to verify, it gives us great convenience, and all transactions on this platform are immutable.

It’s time for everyone to start taking back control of their personal data.

Are you concerned about your personal information floating around on the internet? Do you think that digital identities are the solution to the identity theft and data breach problem?

Let us know how you feel in the comments below.



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