Also known as Decentralized Identity, Digital
Identity is the passport to Web3. It impacts the web3 space immensely, which is
why every business, big or small, uses it. Also, it gives access to the world
of Web3.
How will people communicate their ideas within
this transparent and decentralized world? If you’re wondering this, you will
see businesses take advantage of blockchain technology.
In this regard, identity management in
web3 becomes a key process to which we should pay attention. This blog will
answer all your queries related to digital identity. So Without any further
ado, let us get started.
How Is Digital Identity Changing Businesses?
Nowadays, businesses have acknowledged that
web3 is the next generation of the internet. The most exciting thing about web3
is that leveraging blockchain, digital identity, and decentralization bridges
the gap between a customer and a business.
To understand how it is done, you first need
to grasp how the four pieces of tech stack work. It is similar to a layer cake.
Layer 1: Blockchain
Blockchain technology serves as the
metaverse’s structural base. Many Web2 organizations today use blockchain, a
trusted, secure, immutable, and programmable platform.
Layer 2: Web3
Web3 is built on top of blockchain
technology. Decentralization is possible with Web3; you, the individual, now
own your personal data instead of outside parties.
Layer 3: Decentralized Autonomous
Organizations (DAOs)
DAOs, a mainstay of Web3 and supported by
blockchain, offer a new way for stakeholders to come together and manage a
project, company, or organization. A DAO enables each community member to speak
for themselves and vote on proposals.
Layer 4: Metaverse
To construct a 3D internet, the metaverse,
which sits on top of all three layers, combines virtual reality, augmented
reality, and artificial intelligence.
What is Digital Identity?
Within the Web2 space, the identity of a
person changes. For instance, if you sign into Google with one identity and use
another identity to sign into Facebook. You need separate accounts with login
credentials even if the email addresses are the same.
As a user, you give access to your data in
exchange for using a platform. And in return, the platform sells your data and
captures your audience.
On the contrary, within the web3 space, you
have a single identity that is connected to your digital wallet.
So don’t have to set up a separate account
for every platform. People can connect their unique wallet to an application
form or platform. Therefore, deciding where you want to share your data and if
you wish to give access to a business becomes possible. If yes, then you can
connect your wallet to their platform. It’s that simple!
Now that you’ve got a gist of a digital
identity let us guide you on how to set up a decentralized identity for
yourself or your business.
Steps to set up a digital identity for yourself or your business
To set up a digital identity, you need to
follow these steps:
- Choose and set up a crypto wallet like Coinbase, MetaMask, etc.
- Secure the identity through Unstoppable Domains or similar services.
- Look for the identity that you prefer.
- Choose and purchase a domain that will serve as your digital identity across web3 applications.
- Once you’ve purchased your favorite domain to use as your digital identity, the next step is to mint that domain.
- This is done by minting the domain. Connect the wallet and document your ownership of the identity to the blockchain.
- After minting, decide how you want to utilize the digital identity for your business.
Importance of Digital Identity for Web3: Use Cases
We have now understood the steps to create a
digital identity. Let us proceed with some of the top digital identity
applications and see how it has transformed several parts of Web3 space.
These are:
Social Networks
One of the greatest problems users face in
web2 is that their identity doesn’t follow when they move from one application
to another.
For instance, a user might have thousands of
followers on Twitter and be very influential on that platform. However, this
won’t go on the other platforms. If the user creates an account over Discord or
any other place, they must create a new identity.
On the contrary, in Web3, users’ influence on
one platform goes with them when they go to another.
eCommerce and Privacy
Have you been in a situation where you wanted
to buy something but didn’t, fearing the multitude of marketing emails that
would follow after your purchase?
In web3, that store will stick to a
permissions checklist, and you will be the one who decides what you want to
share with them.
Healthcare
Do you know the main reason why doctors
misdiagnose diseases these days? Over 60% of these incidents happen because
they cannot access the data they want.
Web3 will enable the sharing of medical
information in situations where it is necessary. Additionally, it won’t be
essential to ask for the delivery of records to a different healthcare facility
only for those records to disappear. People can lower the likelihood that their
data will be lost or wrong due to human mistakes by maintaining control over
it.
Education
Digital identity goes way beyond who you are
or what you are purchasing. Nowadays, many universities have tried to test this
concept by including their certifications, diplomas, and degrees as NFTs that
students have to attach to their digital identity.
Because of this, there will be no need to
contact university personnel to ask for transcript copies, etc. Simply by
connecting the wallet, students can give access to university credentials.
Digital tokens can also be used to verify
someone’s attendance at an event.
Now that it is clear that digital identity is
the backbone of the web3 domain, you have to be careful with creating them
yourself or your business. If you are someone struggling with digital identity,
then there are several organizations in the world that can help you put it
together.
Final Thoughts:
The most significant invention of the 20th
century is the internet. In the last 20 years, it has fundamentally changed how
information moves through society in many areas—media, politics, news,
education, interpersonal connections, etc. Nevertheless, although economic
activity is constantly shifting from atoms to bytes, our online identities
continue to lack actual ownership and are segregated within platforms.
Strong Decentralized Identity (DID) solutions
will be necessary as the internet of value takes off to enable new use cases
that will make Web3 more widely used. Though we are still in the early going,
the outlook is positive. And because DID standards are extensible and
compatible, the momentum generated by one innovative application feeds into the
next. In the upcoming years, we anticipate that the popularity of DID solutions
will continue to soar exponentially and open the door for the next significant
wave of Web3 applications.
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