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What is digital identity?

What is digital identity?

7 min reading

Do you desire to understand what digital identity is all about? Keep reading to expand your knowledge about it.

What is digital identity

What is digital identity?

Digital identity is information obtained about a person or organization on the Internet. It includes identifiers and uses templates that make it easy to find people or their devices. Digital identification is used both in cryptocurrencies and in other areas of business. This can be a pseudonymous profile associated with the device’s IP address. Data points that help shape digital identities include usernames and passwords, driver’s license numbers, online purchase history, date of birth, internet searches, and more.

Traditional digital identity management systems are today viewed as fragmented, insecure, and exclusive. Thus, this led to the creation and organization of blockchain blocks.Indeed, blockchain enables more secure management and storage of digital identities, providing a unified and tamper-proof infrastructure. 

These digital identity management systems can be used to address current identity management issues such as unavailability, data insecurity, and fraudulent identities. There are centralized and decentralized identification systems. A centralized digital identity system is a system in which one organization identifies and manages it, while a decentralized identity system includes the person who is at the center, while institutions and private companies simply add details. Links to a central site that is individually controlled.

How is digital identity created?

In cryptocurrencies, in order to create a digital identity, users must register with a self-identity and data platform. During the registration process, the user creates a pair of private and public keys. These public keys are associated with a DID (decentralized identifier) and can be saved and restored or replaced for security reasons. 

How digital identity works for companies, IoT devices, and individuals.

Companies usually create digital identities in order to collect information about their users, employers, business partners as well as other beneficiaries. This could however shift the company’s focus to that of IT responsibilities. Internet of Things (IoT) devices employ digital identities for several reasons and for different purposes. Technical analysts predict that there will be 41.6 billion connected IoT devices by 2025. Early internet consisted solely of trusted institutions but with the rapid evolution in the digital world, IoT devices do not incorporate appropriate identity and access management capabilities.

These devices identify sensors, monitors, and devices and also manages access to sensitive and non-sensitive data. 

Digital identity for individuals is very necessary for society and the economy and it comprises basically an individual’s first and last name, date of birth, nationality, and other identifiers like passport number as well driver’s license. This information is issued by centralized entities and stored in their databases. The major drawback about these digital identities is that they are subject to hacking.

Why do we need blockchain for digital identity?

Given the current concerns that have been raised regarding the security of traditional digital identity management systems, Blockchain provides a method of relief to ensure the security of an individual’s identity. Therefore, we need a blockchain for digital identity, because it is inaccessible, secure, and does not allow any fraudulent activities.

There is no doubt that using a decentralized identity comes with some level of security and safety. The principal way of securing decentralized identities is by the use of cryptography whereby private keys are only known by their owner while public keys are distributed widely and this takes place at two levels. With the first authentication, the public key verifies that the holder of the paired private key sent a message which then leads to the second stage which is encryption. Here the private key holder can decrypt the message encrypted with the public key. With decentralized identity, users can present the verified identifier in the form of a QR code to prove access to certain services. 

In conclusion, digital identity is relevant in a wide variety of situations where people and organizations are required to prove who they are. This is reflected in the variety of approaches used in different identification and access systems. They are also very important for the growth and expansion of any business. Having a suitable way to identify ourselves allows us to set unusual goals.