5 Reasons to Use an Identity Wallet
The growing degree of digitization and the ever-increasing online transactions has necessitated a strong and secure way to identify and authenticate digital entities. This has led to the emergence of Digital Identity Management, where digital documents that prove the identity of an entity are stored and shared digitally.
While there are many components in digital identity management, in this article, we will talk about a central component called identity wallets.
What’s an Identity Wallet?
An identity wallet is a digital wallet/storage where you can safely store your digitized documents and verifiable credentials, and share them easily with others when needed.
You own this wallet and its contents, so you have the power to decide how and with whom you want to share your credentials. This concept of always being in charge of your identity is called Self Sovereign Identity (SSI) and it is one of the pillars of web 3.0.
So, how can this identity wallet be beneficial for you and why should you embrace it?
Here are five reasons why we think identity wallets are the future.
Reason #1: Keeps your Data Safe
One of the biggest issues facing the digital age is cyberattacks and the resultant identity theft.
If you analyze identity thefts and their patterns, you’ll notice that hackers steal millions of identities from a single storage/database, and often, the owner of the identity would know of the theft only much later, and sometimes, may not know it at all!
But what happens when you do away with a central repository where all the data is stored and replace it with a decentralized form of storage where each entity stores its data separately?
It becomes that much harder for someone to steal data because it requires considerable effort to steal just one record, which is not tenable in the long run.
To top it all, the owner is in complete control of the data at all times, so identity theft may not even be possible in the first place.
In all, your data is safe.
Reason #2: Know Where Your Data is Used
Surveys and opinion polls overwhelmingly show that users are concerned about their privacy and want to know how and where their data is stored and used.
For example, a survey by KPMG shows that data privacy is a concern for 97% of U.S consumers and almost 54% worry about what companies do with their data. Likewise, the Eurobarometer survey states that 72% of users want to know how their data is processed.
These numbers clearly show that users will feel more comfortable when they know where their data is stored and how it is used.
The good news with identity wallets is that you control the entire data sharing process, so there’s no concern about how someone else can use your data.
You can choose to send only the relevant data to entities for processing. For example, if you have to prove your age, just send your date of birth credential without including other details such as your address or government ID. That’s how granular you can get with data sharing and its usage.
Reason #3: Meets Mandatory Compliance Requirements
The European Parliament and Council implemented the eIDAS (electronic IDentification, Authentication, and trust Services) regulation in 2014 and paved the way for greater digital security. The more recent European Digital Identity further empowers users to store their identities in a digital wallet and use it seamlessly where needed, even across boundaries.
Such forward-looking regulations are likely to be adopted by other countries as well, so before long, having an identity wallet can become a way of life.
Why not jump on the bandwagon early and proactively meet the required compliance requirements?
This way, you can enjoy its benefits early on.
Reason #4: Facilitates Quick and Easy Authentication
Besides keeping your credentials safe, an identity wallet can facilitate quick, easy, and hassle-free authentication.
For example, opening a bank account in a different country doesn’t have to entail the collection and submission of a ton of documents that could take weeks to process. With digital credentials stored in an identity wallet, the entire process can be completed in a few minutes because all that you have to do is share it electronically.
The concerned bank authorities can verify the data and open an account for you. That’s how easy it can be!
Reason #5: Perform a Wide Range of Tasks Electronically
As more businesses accept identity wallets, it won’t be long before you can share the pertinent information in your identity wallets with a wide range of online services.
Some possible tasks you can do with an identity wallet are:
Prove that you’re 18+ years of age to buy alcohol or enter a bar
Share your past employment and educational qualifications with prospective employers
Use it as a health passport for travel or to buy the prescribed medicines in any part of the world.
Here are some more real-world ideas where an identity wallet can come in handy.
Undoubtedly, identity wallets are an integral part of the future as it comes with a ton of benefits geared for the next-gen online security.
So, are you ready to use an identity wallet and leverage the many benefits that come with it?
Already, the European Union has set things in motion as it plans to create a digital identity wallet that will securely store payment details, passwords, digital documents, and PII of individuals from all the 27 member nations, so the same can be used when needed across a wide range of public and private online services.
To leverage this trend, Affinidi offers APIs and SDKs to create a secure identity wallet to store your verifiable credentials. Contact us right away to get started.