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Glossary

Digital Identity

November 21, 2023 - Around 2 mins mins to read

Understanding Digital Identity

Digital identity refers to various forms of identification that are already widely used. One notable example is government-issued identification, which serves multiple purposes such as accessing banking services, registering businesses, and conducting surveillance activities. Additionally, there are identification systems in place for customers to engage in online transactions, log in to digital platforms, and verify their identity to employers.

However, traditional identity systems often face several common challenges. They can be intentionally difficult to access, insecure, vulnerable to attacks, prone to fraud, and fragmented.

Fortunately, blockchain technology offers potential solutions to many of these issues. Extensive experiments are currently being conducted to explore the use of blockchain for digital identity applications, with some already being implemented on a large scale. Several national governments, for example, are transitioning their entire identity schemes to blockchains.

Blockchain-based digital identities are particularly beneficial for the approximately 11 billion individuals worldwide who lack proof of identity due to factors such as cost, complexity, or inaccessibility. This lack of identification prevents them from accessing essential services like banking. However, the widespread use of mobile phones presents an opportunity for the development of simpler and free blockchain-based identity solutions.

Importantly, blockchain technology offers significantly enhanced security compared to conventional digital identity technologies. While it is currently easy to forge an online identity, blockchain-based identity solutions provide absolute confidence in the authenticity of an identity due to the immutable nature of blockchain recordkeeping.

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Author

Coincu

Glossary

Digital Identity

Understanding Digital Identity

Digital identity refers to various forms of identification that are already widely used. One notable example is government-issued identification, which serves multiple purposes such as accessing banking services, registering businesses, and conducting surveillance activities. Additionally, there are identification systems in place for customers to engage in online transactions, log in to digital platforms, and verify their identity to employers.

However, traditional identity systems often face several common challenges. They can be intentionally difficult to access, insecure, vulnerable to attacks, prone to fraud, and fragmented.

Fortunately, blockchain technology offers potential solutions to many of these issues. Extensive experiments are currently being conducted to explore the use of blockchain for digital identity applications, with some already being implemented on a large scale. Several national governments, for example, are transitioning their entire identity schemes to blockchains.

Blockchain-based digital identities are particularly beneficial for the approximately 11 billion individuals worldwide who lack proof of identity due to factors such as cost, complexity, or inaccessibility. This lack of identification prevents them from accessing essential services like banking. However, the widespread use of mobile phones presents an opportunity for the development of simpler and free blockchain-based identity solutions.

Importantly, blockchain technology offers significantly enhanced security compared to conventional digital identity technologies. While it is currently easy to forge an online identity, blockchain-based identity solutions provide absolute confidence in the authenticity of an identity due to the immutable nature of blockchain recordkeeping.

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