By clicking "Accept", you agree to the storing of cookies on your device to enhance site navigation, analyze site usage and assist in our marketing efforts. More info

Digital ID Wallet: Complete Guide 2024

Published
July 11, 2024

The use of digital ID wallets around the world is growing rapidly. Juniper Research has found that the number of digital identity apps in use will be over 6.2 billion in 2025. In 2020, the number was just over 1 billion. The research also found that in 2025, civic identity apps where government-issued identities are held in an app, will account for almost 90% of digital identity apps installed globally.

Factors Driving the Increased Demand for Digital ID Wallets

The growing demand for digital services: As more services move online, the need for secure and efficient digital identification solutions has become increasingly important.

Rising concerns about identity theft and fraud: With the increase in data breaches and identity theft, consumers are looking for more secure ways to manage and protect their personal information.

The need for more efficient identity verification: Traditional methods of identity verification, such as physical documents or in-person verification, can be time-consuming and inconvenient. Digital identity wallets offer a more efficient alternative.

Increasing use of mobile devices: With the rise of smartphones, digital identity wallets offer a more convenient way to manage personal identification and credential documents on the g

Government support for digital identity solutions: Governments around the world are recognizing the need for secure digital identity solutions and are implementing policies to support their development and adoption.

What Is a Digital ID Wallet?

Example of Dock's digital identity wallet

A digital ID wallet is like a virtual wallet where you can store your digital identification documents and credentials such as your driver's license, certifications, or professional licenses.

It allows you to easily access and share your personal information without having to carry physical copies of your documents with you. You can also use it to verify your identity when logging into websites or making online transactions.

Digital ID wallets also make transactions more secure and enable data sharing control. They are becoming increasingly popular across different countries because of the improved convenience, security, and inclusivity they provide. 

Benefits of a Digital ID Wallet

Digital ID wallets offer a range of advantages for users, including greater convenience, enhanced security, efficiency, privacy, accessibility, and cost savings.

Convenience: Users can access all their digital IDs and credentials from a single app on their mobile device, eliminating the need to carry multiple physical documents.

Enhanced security: Digital ID wallets offer enhanced security features such as encryption to protect personal information from theft or fraud. This can provide people with greater peace of mind and confidence in using their digital IDs online.

Instant Verification: Replace manual, outdated, and time-consuming verification processes such as phoning issuing organizations to verify someone’s credentials, which can take weeks or months. 

Privacy: People can control what information to share and with whom, which can help prevent unnecessary sharing of personal information and reduce the risk of identity theft or fraud.

Accessibility: Easily accessed and verifiable anywhere at any time, which makes it easier for users to get their personal identification documents whenever they need them.

Cost savings: Digital ID wallets can help reduce the costs associated with traditional methods of identity verification including the high costs of organizations verifying the documents.

Countries With Digital ID

digital ID wallets can be used in many areas

Digital ID wallets are becoming increasingly common around the world as governments and businesses recognize the benefits of secure and efficient digital identity solutions.

Estonia 

Estonia has been a leader in digital identity solutions, implementing a digital ID card system in 2002. Estonians can use their digital ID cards to access a range of government services and sign documents digitally.

South Korea

South Korea has implemented a digital ID system called i-PIN, which is used for a range of online services, including e-commerce and financial services.

India

India has implemented a digital identity system called Aadhaar, which provides each citizen with a unique 12-digit identification number. The system is used for a range of government services, including social welfare programs and financial services.

Norway

Norway has implemented a digital ID system called BankID, which allows users to access a range of online services and sign documents digitally.

Singapore

Singapore has implemented a digital identity system called SingPass, which allows users to access a range of government services and sign documents digitally.

Digital Identity for All Europeans

Since 2019, the European Union has been developing an ambitious digital identity initiative, the European Digital Identity, to provide a digital identity wallet for EU citizens, residents, and businesses, who want to identify themselves or confirm data for private and offline services across the EU.

Key benefits of the European Digital Identity

  • Every person can have a digital identity that is recognized everywhere in the EU
  • A simple and safe way to control how much information you want to share with services
  • Operated through digital wallets on phone apps and other devices

The digital wallets will enable people to:

  • Identify themselves online and offline
  • Store and exchange information provided by governments such as nationality, name, and date of birth
  • Store and exchange information provided by trusted parties
  • Use credentials to confirm the right to reside, work, or study in a certain Member State

Dock Wallet: Digital ID Wallet App

The Dock Wallet allows users to: 

  • Easily create and manage their decentralized identifiers (DIDs)
  • Securely store, share, and manage Verifiable Credentials 
  • Efficiently verify credentials

Benefits of Dock’s Digital ID Wallet App

Dock's digital ID wallet enables selective disclosure

Non-custodial wallet

Non-custodial digital ID wallet apps are becoming increasingly popular as more people look for greater control over their own identity and data online. They offer a secure and decentralized way to manage your digital identity without having to rely on centralized authorities or intermediaries. 

In contrast to custodial digital wallets, you have complete control and access over your own identity and data. This means that you can use it to securely store and manage your decentralized identifiers (DIDs), the associated private keys, and any other credentials you may need for online interactions.

Instant Verification 

Organizations can use Dock's digital ID wallet to send verification requests

With Dock’s blockchain-based system, credential verification can be done in seconds and can replace the older traditional manual and expensive verification methods that often involve calling issuing organizations like licensing organizations and universities. 

Organizations that need to check the authenticity of credentials can send verification requests to credential holders from the computer, the Dock Wallet, or wallet-to-wallet in person. For example, verifying organizations such as employers at a job fair can present verification requests (shown as a QR code) from their wallets to ensure that job applicants have specific qualifications such as a specific degree or training certificate. Applicants can scan a QR code that contains a verification request for specific details such as their degree and they can securely share which information they want to present to the employer. 

Digital ID Wallet Recovery and Backup

A great benefit of Dock’s digital ID wallet is if your phone ever breaks, is stolen, or if you forget your password, you can still access your account with a seed phrase, which is a set of 12 random words that are generated whenever a new wallet is created. 

It’s important to keep your seed phrase safe and secure, as anyone who has access to it can potentially gain access to your wallet information. We recommended that you store your seed phrase in a secure location such as a safe and to never share it with anyone else.

You can backup your wallet within the app in case you want to import your wallet to a new device by simply creating a password. 

How the Backend Digital ID Wallet Technology Works

A digital ID wallet is an app that allows you to store, manage, and share your personal identity and credential information online. This information can include things like your name, date of birth, driver’s license, and other data.

Verifiable Credentials, Decentralized identifiers (DIDs), and blockchain are the technological tools that work together to enable people to securely store and share information to whomever they choose with a digital wallet. 

Verifiable Credentials

You can choose which credential to present with a digital ID wallet

Verifiable Credentials are fraud-proof and instantly verifiable digital documents that contain information about you and can be used to verify your identity. These credentials can be issued by different organizations, such as your employer or your university, and can include information like your name, education, or employment history.

For example, if you need to prove your age to access a website, you can use your digital ID wallet to share a Verifiable Credential that contains your date of birth. The website can then instantly verify the authenticity of this credential and grant you access to their content.

Because your digital ID wallet is decentralized, you have complete control over your personal information. You can choose which Verifiable Credentials to present and with whom in addition to being able to choose specific information within a credential or prove something without sharing data. This gives you greater privacy and security online, and helps to prevent identity theft and fraud.

Decentralized Identifiers (DIDs)

People can create and manage decentralized identifiers with a digital ID wallet.

Decentralized identifiers (DIDs) are a type of digital identifier that are unique to you and can be used to identify you online. DIDs act like an ID number and are made up of a string of letters and numbers. With the Dock Wallet, you can easily create your own DIDs. 

Here’s an example of a Dock DID:

Example of a decentralized identifier created by Dock.

How DIDs and Verifiable Credentials Work Together

DIDs and Verifiable Credentials work together to provide a decentralized, secure, and privacy-preserving way of sharing digital information.

  • Verifiable Credentials are linked to DIDs and the DID owner (individual or organization) has control over the credential
  • A DID can be used as the issuer of a Verifiable Credential

Unlike traditional identifiers like usernames or email addresses, DIDs are not owned by corporations, but by the users. Users are completely in control and fully own the DIDs they create. 

People can make as many DIDs as they want for different purposes. For example, Shelly uses the Dock Wallet to create the following DIDs: 

  • DID 1: Used to sign into online gaming sites  
  • DID 2: Hold educational-related credentials like a university degree and professional certifications
  • DID 3: Hold work-related credentials issued from HR such as professional development workshops and work status
  • DID 4: Used to sign into sites to make online purchases

Public and Private Keys

A employer's decentralized identifier (DID) will come with a private and public key

Every DID that is created by the user comes with a private and public key pair, and DIDs can have multiple pairs. Private and public keys are usually made up of a combination of letters and numbers.

A private key is a secret code that is used to securely access and control your decentralized identifier (DID). Think of it as a secret password that only you know and that allows you to prove that you are the rightful owner of your DID. You should never share your private key with anyone else because it is what gives you control over your DID and the associated personal data.

When you want to prove your identity online or interact with others with your DID, you will use your private key to sign messages or transactions. This proves that you are the rightful owner of the DID and that you are authorized to perform specific actions.

A public key is a code that is used to share your decentralized identifier (DID) with others in a secure and verifiable way. Think of it as a digital address that you can share with others so they can send you messages or transactions, similar to an email address.

Unlike your private key, you can share your public key with anyone you want because it’s a way for others to verify your identity and the authenticity of your DID. When you want to receive a message or transaction from someone else with your DID, you will share your public key with them. They can then use your public key to verify that the message or transaction is coming from you and that it hasn't been tampered with.

Example of how someone uses their digital ID wallet to receive a passport

The Role of Blockchain in Enabling Instant Verification and Fraud-Proof Data

How the blockchain, Verifiable Credentials, and decentralized identifiers (DIDs) work together

Blockchain is a digital ledger that allows you to store information in a secure and transparent way. It works by creating a chain of blocks that each contain a set of data. The blocks are connected to each other, forming a chain that cannot be altered or deleted without changing the entire blockchain.

DIDs can be stored on a blockchain by creating a special type of transaction that includes the DID and its associated public key. This transaction is then added to the blockchain, where it is validated by other nodes on the network. Once the transaction is validated and added to the blockchain, the DID and its associated public key can be retrieved by anyone with access to the blockchain.

Storing DIDs on a blockchain provides several benefits, including security, transparency, and immutability. By storing DIDs on a decentralized and immutable blockchain, it ensures that anyone can verify the authenticity of a DID, providing greater trust and confidence that the associated data on Verifiable Credentials are accurate and haven’t been tampered with.

It’s important to know that to maximize data privacy and security, Dock never stores Verifiable Credentials or personally identifiable information on the blockchain. Only DIDs can be stored on the blockchain in order to enable instant verification of Verifiable Credentials, which are usually stored in users’ wallets rather than a centralized storage system. 

Conclusion

Digital ID wallets are becoming increasingly popular globally as they provide more control, privacy, and security over our own identity and data online. Decentralized identifiers (DIDs), Verifiable Credentials, and blockchain are the technological tools that work together that enable people to securely store and share information with their digital wallets. The Dock Wallet is a non-custodial digital ID wallet app that allows users to create DIDs, verify credentials, hold Verifiable Credentials, and backup their accounts. 

About Dock

Dock is a Verifiable Credentials company that provides Dock Certs, a user-friendly, no-code platform, and developer solutions that enable organizations to issue, manage and verify fraud-proof credentials efficiently and securely. Dock enables organizations and individuals to create and share verified data.

Customer Use Cases

Learn More

Create your first Reusable Digital ID today

Turn verified ID data into Reusable Digital ID Credentials, instantly verify their authenticity and get paid when they are verified by third parties.