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Digital ID Wallet: A Complete Guide

If you’ve ever wondered how to keep your personal information safe and easily accessible in today’s digitally connected world, a digital ID wallet might be the answer. As the name suggests, it’s a virtual storage for your identity details, from your driver’s license to your health insurance information.

Today, we’ll be diving into how a digital ID wallet works, exploring its benefits, and looking at different ways you can use it. Moreover, we’ll discuss how safe it really is to store your personal information in a digital ID wallet.

What is a digital ID wallet?

A digital ID wallet safely stores your identification details. Basically, it’s the digital version of your physical wallet for your online identity. With it, you can access your identification information quickly whenever you need it—like if you want to purchase something online or prove your identity, like when selling an item on Facebook Marketplace. 

In addition, digital ID wallets can story much more than just what today is represented by physical ID.  In addition to government issued documents like passports and drivers licenses, a digital ID wallet can store things like proof of employment, credit scores, and current compensation – really any information about yourself that can be attested to by a third party.

Digital identity solutions, like digital ID wallets and goConfirm, allow you to access and share your personal information conveniently and securely. With these, you can verify your identity without having to take a picture of your physical documents or go through some verification process every time. 

Additionally, you can transact confidently, knowing you have full control over how much information is being shared.

How does digital identity work?

A digital ID wallet holds the key, figuratively and literally, to your online identity. But how does it work? Like anything to do with your personal identification data, it’s important to understand how the process works. 


To start using a digital ID wallet, you first need to set it up. This usually involves downloading an app or registering on a platform. At this stage, you’ll create your first verified identity information by entering and verifying basic information like your email and phone number.

You’ll also be asked to submit additional documents to verify your ID, like a driver’s license or passport. The digital ID wallet app will check the documents to confirm their validity and your identity.

A digital ID wallet stores cryptographic representations of your credentials called verifiable credentials (VCs). These VCs are tamper-proof digital documents issued by trusted entities (governments, universities, employers etc.), and in some cases by proxy from trusted intermediaries.


Once your digital ID is ready, you’ll set up the authentication process to make sure you can log into your account securely. Most digital ID wallets use methods like biometrics (like fingerprint or facial recognition) or two-factor authentication to guarantee that only you can access your digital identity.

Aside from the secure login measures, digital ID wallets also encrypt your data, which means they’re turned into a code that only you or authorized parties can access. Encryption involves scrambling the data using complex algorithms, making it unreadable to anyone without the proper decryption key.

These keys are also known as encryption keys and are unique to each user. There’s a public key that’s used to encrypt the data and a private key to decrypt the data. As a result, even if someone were to intercept the encrypted data, they wouldn’t be able to decipher its contents without the private key, which you should keep secure and confidential.

Storage and management

Digital ID wallets can be stored in two ways: decentralized (on your device) or centralized (on a company’s server). 

Decentralized storage gives you more control and security, which makes it a safer option. Unlike centralized storage, there’s no single point that hackers can target in decentralized systems. 

Moreover, one of the best things about a digital ID wallet is that you have control over who sees your information. You can manage permissions and decide what details to share for each transaction through selective disclosure.

For instance, imagine you have to prove that you’re above 21 years old for a certain online purchase. Instead of sharing your driver’s license and revealing your date of birth, you can present a partial VC showing only your age range (e.g., 21-25).

This is called the selective disclosure of attributes, allowing you to share only the necessary information without revealing your identity. It adds an extra layer of privacy and protection to your personal information while fulfilling the verification requirement.

Benefits of digital ID wallets

It’s predicted that the average number of data interactions for each person connected online will jump to nearly 5,000 per day by 2025. As such, it’s become even more important to have secure and convenient ways to manage our digital identities. 

These are the top three benefits of digital ID wallets:

Enhanced security features

As stated earlier, digital ID wallets use advanced security measures like encryption to reduce the risk of identity theft through unauthorized access or data breaches. Biometrics and two-factor authentication also add an extra layer of protection since only you can unlock your digital wallet.

While goConfirm isn’t a digital ID wallet in the traditional sense, our software serves a similar purpose. It functions as an identity provider and a verifier, allowing you to manage your identity data and present it securely on online peer-to-peer selling platforms, such as Facebook Marketplace.

Our aim is to build trust in the online marketplace by securely verifying your identity and confirming that you are who you claim to be without risking exposure to data breaches.

Convenience in everyday transactions

Digital ID wallets offer a convenient way to access and use your digital identities. Features like one-tap authentication make it quick and easy to prove who you are online, whether for online shopping or signing up for new services.

Moreover, it also simplifies the process of filling out forms and providing personal information. Instead of manually entering your details every time, you can simply select the information you want to share from a single digital ID wallet.

Acceptance in major parts of the world

These wallets are increasingly being accepted as a valid form of identification in major parts of the world, such as countries in the European Union, South Korea, Singapore, and India. With this level of global reach, you will be able to use your digital identity for international transactions and travel without worrying about bringing your physical identification documents.

Digital ID wallet vs digital wallet: What’s the difference?

Some people may confuse the  terms “digital ID wallet” and “digital wallet”. It’s important to know the difference between a digital ID wallet and a digital wallet. Both serve different purposes and have unique features.

Digital wallets are mainly used for storing payment information and aiding financial transactions. They hold details like credit card numbers, allowing you to make purchases online or in stores using their mobile devices. 

Basically, digital wallets replace your physical wallet to make online purchases more convenient.

On the other hand, your financial information is just one aspect that a digital ID wallet can store. It goes beyond payment information and includes personal identification information like your driver’s license, passport details and employment details.

In conclusion

Digital ID wallets offer more than just convenience when transacting online. With their advanced security and privacy features, you can protect your information and fully control how and when it is shared. 

As technology becomes even more sophisticated, these wallets will eventually become an essential part of our digital lives.