What is digital identity?
A digital identity arises from data created by an individual’s actions online and use of personal information.
Once an individual purchases digital assets, they will have proof of ownership of this asset. It will be registered in digital format and a user’s identity information.
Then, when an individual needs to verify ownership of a digital asset, they can use their digital identity credentials.
At the moment, our important identification information is kept on a centralized government database that has a single point of failure.
So, if this type of directory gets compromised, every user has to go through a complicated recovery process. This is because ordinarily centralized databases are hosted on third-party servers.
So, this feature of a centralized database makes it more appealing to hackers. But, by using blockchain, you can create a decentralized identity for yourself.
Additionally, centralized databases will also lead to oversharing of identity information.
For example, if you use a utility bill to prove your address. In that case, a company will get access to other sensitive data on this document, even though it does not need it to verify your address.