Digital Identity: What Is Digital Identification Is & Why Do We Need It?

How we do our interactions and business transactions over the Internet has changed in the past few years. Digital identity back then was just a matter of having an email, a simple password, and links to a random digital profile. That is not the case anymore.

Our ever-growing presence in the online landscape has pushed the need for businesses to develop new paradigms that are directly tailored to the needs of their target customers. 

We at Confirm believe that as the processes get complex and the risks get bigger, the need for users to have a verified digital identity also becomes more apparent.

The concept of digital identity may sound very complicated, but it is actually very easy to understand. This article will explain digital identity in the simplest and most comprehensive ways possible. We will also be discussing other relevant topics around the concept that will help you see how it is used today. 

What is digital identity?

What is digital identity, you may ask? Well, the simplest definition of a digital identity is a representation of who you are online.

Digital identity, in the context of a user or individual, is the aggregation of the full range of personal data from the Internet. This is then used to produce a unique digital profile. 

Each profile is integrated into digital systems to manage access, allow interactions, and protect the user while in cyberspace.

One’s online identity covers a wider array of data and information. Registering an email address, creating a password, filling up forms, and uploading pictures are just a few examples of simple digital identity creation.

Furthermore, as technology and new business models advance, security programs are now zooming in on the unique nature of digital identities to ensure their veracity. Digital systems have now encompassed legal, behavioral, and even societal norms into their security programs to identify, verify, and protect every person’s identity.

What is the difference between a digital identity and a digital ID?

Digital identity and digital ID are terms that are often used interchangeably. However, if we’re looking at both in a strict sense, they can be different when used in specific contexts.

Digital identity is defined as all the information, credentials, and attributes that encompass an individual or entity. It is a chunk of information that when compiled, becomes someone’s unique profile online.

A digital ID, on the other hand, can also be called a digital identification or certificate. This is the digital document that is presented to prove the individual’s identity—like the electronic equivalent of your company ID or any type of physical ID card. This type of credential uses the user’s digital signature to bind a public key to the person. 

The following elements are generally found in a digital ID:

  • The name of the owner
  • The public key
  • The public key’s expiration date
  • The serial number of the ID
  • The name of the issuer
  • The digital signature of the issuer

The confusion between the two arose from the way they are used online. Both are used to prove the identity of the individual and for the person to be able to access information or services online.

How does digital identity work?

Every individual performs different activities on the Internet. As such, the combinations of data and information one user has are never exactly the same as the next person. Because of the uniqueness of data that every person has, the digital footprints left by people are also unique.

Given that, there are two ways in which digital identity is created: actively and passively

One is through the active uploading and filling up of personal information as the user registers on forums, social media platforms, e-commerce sites, gaming sites, and more. Everything we do on the Internet collectively adds up to create a digital identity. 

The second way is passively creating digital identities through “shadow data.” This shadow data is related to the way a certain user behaves online. 

For example, online programs can record and analyze the data based on:

  • The website the user goes to the most
  • How frequently the user visits that website
  • How long does the user stay on the website
  • The activities does the user engage with while on the site

From just a few bullet points and a single scenario, programs can describe the person’s behavior, tendencies, and the things and activities they are mostly and least interested in. 

Imagine what other descriptions and person’s attributes are made when all the activities that a single person does online are monitored, collected, and interpreted contextually. In fact, from the data collected above, programs can attach and establish the following descriptions:

  • The person frequently visits online marketplaces
  • The person spends an average of four (4) hours per day buying and selling stuff
  • The person never visits shady sites or indulges in undesirable activities

The characteristics and attributes of digital identity continuously evolve as long as more information is being processed, analyzed, and interpreted by more advanced programs. 

Examples of information that make up digital identities

Simply speaking, our digital identities reflect who we are in the real and virtual worlds. Let’s focus on two broad categories that make up a digital identity (digital attributes and digital activities) and provide a few examples for each.

  • Digital Attributes: Digital attributes are pieces of information that pertain to a person or entity (such as name and address). Combinations of these data are used to create the digital profile of that entity.
  • Digital Activity: This is an event performed by a digital entity on the internet. 

Here’s a table that can give you clearer examples of both:

Digital Attribute

Digital Activity

Name
Age
Ethnicity
ID numbers (Social Security, Passport, Health credentials)
Bank information
Preferred currency
Favorite brand
Medical history
All usernames and passwords 
All email addresses
IP address
Biometrics (eye, face, and fingerprint scans)

Forum and page posts
Photos and videos on social media
Purchase history
Likes, comments, shares, mentions
Upload and download history
Websites visited
Videos and movies watched online
Geotags
Apps downloaded
Mobile data usage
Forms and petitions filled up and signed

All of these make up the digital identity of one unique individual. 

Of course, there’s still the matter of accuracy and verification. That is why we still have to know how digital identity is processed and how the veracity of the information collected is ensured.

How is a digital identity stored?

Digital identities are stored electronically, similar to digital files. It can be kept in a centralized storage facility like a server, a computer, or any other electronic device. All of the digital identity owner’s personal information can be found there.

We at Confirm use a newer method of storing digital identity data, specifically a decentralized data storage and management system. All of the digital data associated with the owner (called a ConfirmID) is kept in a digital space that only the person owning it has access to. 

We aim to produce a platform that will bolster trust in every online interaction. Of course, this trust is backed up by ironclad security features to protect the customer from theft and other forms of cybercrime — all our data is verified by Persona, which uses global standard security and privacy frameworks. 

Digital identity wallets and similar apps are other examples of decentralized storage systems. 

Another common method of data storage is the use of blockchain technology. Data collected using the blockchain are not stored in facilities like servers or computers. Instead, it’s distributed across all entities utilizing blockchain technology—this includes information about the owner of the digital identity.

A person’s digital identity cannot be copied or utilized by anyone other than the owner on the blockchain. Only the owner has control over all information. Even if information about one peer is compromised, the other digital identities will not be affected.

This form of data storage is recognized to be safer and more secure. Notably, major corporations like Unilever and Amazon have already integrated blockchain into their systems.

How is a digital identity verified?

The digital identity verification process is a fast-paced method used by programs and applications to cross-verify the truth and validity of submitted information. It involves multiple layers of security checks aimed at eliminating fake identities.

The following are examples of methods used to identify the identity of the owner:

  • Username and password
  • IP address detection
  • Two-factor Authentication (2FA)
  • Single sign-on (SSO)
  • Biometric Authentication

Modern digital authentication methods also involve scanning and capturing information from government-issued documents, enhancing the ability to confirm the authenticity of submitted documents.

The filtered information is then compared to negative data sets, or groups of data that cannot be linked to the identity in question. Imagine things as a process of elimination. The data undergoes additional matchmaking and comparisons before reaching the final verdict. It’s a step-by-step process to ensure accurate identity verification.

The importance of digital identity today

The concept of digital identity can be used from many different perspectives. We can discuss more about its impact on industries such as insurance, the global economy, and multi-billion dollar companies at another time.

For now, let’s talk about how having a digital identity matters to the everyday guy.

Owning a secured digital identity carries an immeasurable number of benefits. Let’s get into learning about the most obvious advantages of having one.

Convenience

A digital identity brings countless conveniences. After all, you don’t have to carry hard copies of your documents for online transactions, especially those that involve strict verification of identities. 

Take ConfirmID as an example. This portable digital ID can be used to store and share one’s digital identity securely. Our digital ID’s security is powered by Persona, a global leader in providing robust privacy and security frameworks to applications and platforms online.

Plus, the authentication methods used by Confirm take just a few seconds of your time and are under the full control of the owner. We believe in the concept of selective disclosure, where you, as the account’s owner, are the only one who can choose what information to disclose on it.

With a single set of credentials, you can effortlessly streamline various transactions and access your accounts across multiple platforms.

Cross-platform accessibility

Using digital identity wallets makes moving across platforms very easy. There are already a lot of online applications and platforms that allow cross-platform accessibility. For example, if your Google account has already been verified, you can log in to eBay or Facebook without the need to re-upload your credentials.

If you are already logged in on one platform, you can gain access to the others with just a few clicks.

Reduced fraud and identity theft

Digital identities are protected by multiple layers of security features and secure authentication methods. Unauthorized individuals won’t be able to use your accounts. In fact, a user’s Confirm data is stored on a decentralized platform, so access to the account is under your total control. Identity theft and other forms of scams using your digital credentials will have very low chances of succeeding.

It is the responsibility of the owner to protect your digital data. You have to know how they can be stolen and what methods you can use to keep your information safe and secure. 

The good news is that as long as you use your digital identity under strict methods (such as authentication, biometrics, and two-factor authentication), handling online transactions and interactions on the Internet can be done safely.

How safe are digital identities? 

Digital identities, by themselves, are already a level of safety and security. However, cybercriminals are also getting smarter each day. These people with fraudulent intentions constantly create programs that can hack and work around high levels of security walls.

Today, constant research and reevaluations are being made to ensure the safety of sensitive data. 

Fortunately, cybersecurity software developers have taken steps and countermeasures to prevent such threats and ensure that data security and confidentiality are continuously strengthened and maintained. Multi-leveled security features like two-factor authentication are examples of this.

Still, it is still a vicious cycle or a game of checkers. As new security measures are developed, cybercriminals are also finding ways to circumvent them. 

So, what you can do is to be vigilant and keep your digital identity safe. 

How can I protect my digital identity?

You can increase the security of your digital identity by doing the following:

  1. Use a strong and unique password for all of your online accounts. Keep the records of them in a safe place. Never share your login details (password) with anyone. 
  2. Be cautious in sharing personal information online. Make sure the forms you fill out are from reputable sources. 
  3. Avoid clicking on links that look suspicious to avoid phishing. Phishing scams are where users purposefully “phish” for your information and use it to commit fraud or identity theft.
  4. Never download anything from unknown and suspicious sources. They may contain malware that leaks data from your computer.
  5. Only trust applications with higher-level authentication methods, such as biometrics and two-factor authentication.
  6. Always make sure your devices’ security features are turned on and up-to-date.

Digital identity opens up your life’s information to the virtual world. As such, protecting and keeping your credentials safe should always be at the top of your priorities. 

Final thoughts

The concept of digital identity may feel new to many of us, but its marks are already all over the place. The applications and usage of digital identity are also getting more advanced and secure. It is expected that every online interaction will become as safe, secure, and hassle-free as it can ever be.

The younger generations have already placed their trust and confidence in this ecosystem, and there are no signs of slowing down. The same can be expected of future generations.

We are now transitioning to a world where everyone is interconnected on the Internet. The key is to be prepared and embrace this transition. Let’s start by securing our digital identity.

FAQs 

Does digital identity use blockchain technology?

Yes, there are security programs and products that are presently using blockchain-based verification systems to verify digital identities. After all, blockchain technology is known as a very secure form of storing personal data due to its decentralized and shared nature. 

Take note that not all security software used in protecting digital identity today uses Blockchain technology. It will probably take a few more years before this concept becomes the standard.

Apps like digital ID wallets are already using a decentralized form of storage system, but not all are using blockchain technology at present. 

What are the most common uses of digital identity?

Digital identity is most commonly used to authenticate and authorize the owner before granting access to a range of online services. This spans across different sectors, including e-commerce, social media, discussion platforms, and online interactions with peers.

On a larger scale, global data protection laws and regulations are also enforcing the compliance of security program developers to emphasize digital identity as part of their data protection programs. Strict implementation and enforcement of high-level security methods are required before the apps are brought to the public.

In time, most if not all, online transactions will require the use of digital identity.

Is it safe to use my digital ID to access my money online?

Of course. Online banking and/or financial software focused on data management and safekeeping have gone a long way in implementing various security features to protect online assets. The center of all these security features is the unique digital identity of the customer.

In short, only you, the owner of the account, can access, move, and use your money.

The registered unique identity of an entity is already complex enough to copy. Coupled with other security methods and decentralized storage, all of your online assets are kept safe and secure.