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Enhanced Digital Identity Verification With Verifiable Credentials

December 8, 2023

In today's digital age, our online identities have become an integral part of our daily lives. Yet opening new bank accounts or accessing services like car rentals often rely on the verification of physical identity documents. 

Also, the methods we've traditionally relied upon for digital identity verification are proving increasingly inadequate in the face of relentless cyber threats and the growing maze of data regulations. Advanced hacking techniques, data breaches, and privacy concerns have exposed the vulnerabilities of traditional digital identity verification. As fraudsters become more resourceful and data protection regulations grow stricter, it's evident that a fundamental shift is needed in how we verify digital identities. 

Fortunately, verifiable credentials offer an innovative solution that can revolutionize the way we confirm and protect online identities. In this blog, we'll discuss how verifiable credentials can solve the limitations of physical verification as well as older forms of digital identity verification. 

What Is Digital Identity Verification?

Digital identity verification is the process of confirming the identity of an individual or entity online, typically through the use of personal information and verification checks to establish trust and security in online interactions. So as we’re shopping, banking, interacting, and working online, digital identity verification confirms to other people that we are who we say we are.

Why Enhanced Digital Identity Verification Is Needed

Digital identity verification with verifiable credentials helps prevent data breaches

1. Eliminate the Need to Verify Physical Documents

The need for digital identity verification to replace cumbersome and time-consuming physical document verification processes can’t be overstated in today's fast-paced digital world. Physical identity verification, which often involves presenting physical documents like passports or driver’s licenses, are expensive for organizations and create long delays for people. Also, the storage and management of physical documents come with security risks.

In contrast, digital identity verification streamlines the process by allowing individuals to verify their identities online quickly and securely. Digital identity verification often incorporates advanced authentication methods. By replacing the tedious and resource-intensive process of physical document verification, digital identity verification not only saves time and money but also offers a more efficient and user-friendly experience.

2. A Surge in Cybersecurity Incidents

Because we’re in an age where our digital footprints are as real as our physical ones, advanced security measures like enhanced digital identity verification are crucial. Traditional digital identity verification methods often result in recurring problems of a lack of privacy, companies storing a large amount of customer information, and large-scale data breaches. 

Despite the fact that technology is advancing at such a rapid pace around the world, cyber attacks continue to get worse as identity theft cases are at an all-time high. The total fraud and identity theft have nearly tripled over the last decade. This increase is largely due to a wider range of identity theft methods including financial identity theft, medical identity theft, child identity theft, and tax identity theft.

Cybercrime will cost companies around the world an estimated $10.5 trillion annually by 2025, which is up from $3 trillion in 2015. This is a growth rate of 15% year over year. Fraudsters continuously evolve their tactics and use more refined methods to bypass traditional security checks. They're orchestrating advanced identity theft, synthetic identity fraud, and deepfake technology. 

Fraud-proof verifiable credentials can address these problems by leveraging advanced cryptographic techniques and decentralized technologies. These credentials allow individuals to securely store their identity attributes, such as verified personal information, qualifications, or certifications, in a tamper-resistant digital format in a digital identity wallet

3. Regulatory Compliance and Liability Reduction

A variety of industries require Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, which is why organizations have to conduct identity verification. These are some of the most common sectors that require KYC: 

  • Financial services
  • Real estate
  • Insurance
  • Telecommunications
  • Gaming and esports
  • Online marketplaces

Also, with the stringent regulations like GDPR (General Data Protection Regulation) in the EU and CCPA (California Consumer Privacy Act ) in the US, businesses are under immense pressure to protect user data and verify customer identities comprehensively. 

Verifiable credentials can streamline the verification process by enabling verifiers to instantly check the authenticity of identity credentials, which also creates a much better user experience. 

Also, when regulations allow, verifiable credentials enable businesses to shift data ownership to end customers. Customers store their own data and businesses can verify it without storing it. This can simplify compliance. When the end customer delivers data, it inherently comes with consent for a specific purpose. Since the verifying company isn't storing the data, compliance with regulatory requirements such as data retention to rights of erasure become straightforward.

4. Enabling Inclusive Digital Access

In a society striving for inclusivity, digital identity verification paves the way for broader, more equitable access to essential online services, especially for individuals who may lack traditional identification forms. 

By accepting diverse identity verification forms, digital platforms can become more accessible and user-friendly, empowering more people to participate in the global digital community. 

Benefits of Enhanced Digital Identity Verification Using Verifiable Credentials

Digital identity verification using the Dock Wallet

In an increasingly interconnected digital landscape, the importance of accurately identifying individuals online has never been more vital. Here are the key advantages of enhanced digital identity verification.

1. Stronger Security

Verifiable credentials have been designed to withstand many types of attacks, so an architecture that relies on them will benefit from their security guarantees. Further, data is distributed across various devices, widespread data breaches are more challenging, which greatly reduces the potential costs of that result from a large-scale data breach and damage control.

Additionally, verifiable credentials allow users to share only the necessary information required for the digital identity verification, without revealing their full identity, which promotes data minimization during the verification process. This protects their privacy and reduces the risk of identity theft. If Zero-Knowledge Proof technology is enabled, end customers won’t have to reveal the credential details at all to prove a claim.

2. Faster Customer Onboarding and Instant Verification

In today's fast-paced digital world, users expect seamless experiences. By allowing users to reuse digital identity credentials in real-time without having to re-verify physical documents, businesses can significantly reduce friction, leading to greater customer satisfaction and retention.

3. Regulatory Compliance

As digital transactions grow, so does the tightening of regulatory requirements to protect users. Digital identity verification reduces the friction of physical document verification, particularly with KYC processes. In addition to long wait times, more manual work is involved if the automated process doesn’t work. Compliance is not merely about avoiding penalties, it’s about demonstrating to your customers and stakeholders that your business is reputable, secure, and trustworthy.

4. Fraud Prevention

The digital identity verification of verifiable credentials prevents fraud by using cryptographic techniques to create tamper-evident digital records. These credentials are issued by trusted entities and can be easily verified by relying parties. Any attempt to alter the information within a verifiable credential would break the cryptographic signature, immediately alerting verifiers to fraudulent activity. This robust security ensures that only legitimate credentials are accepted, reducing the risk of identity theft, document forgery, and other fraudulent activities. 

5. Cost Efficiency

Implementing digital identity verification can lead to significant cost savings in several ways. Firstly, identity verification companies and their clients don’t have to spend more money re-verifying the same customer when they only have to be verified once and given a reusable digital identity. Also, physical identity verification methods require more physical resources and labor. Digital verification systems provide faster and more accurate results with less manual intervention, reducing the overall operational costs for organizations. 

What Are the Types of Digital Identity Verification?

Biometrics is one of the types of digital identity verification

These are some of the common methods used to digitally verify IDs:

  • ID document verification: Validates the legitimacy of government-issued IDs (like driver's licenses, passports). The use of mobile driver’s licenses (mDLs) are growing, particularly in the US. This is essential for processes requiring legal identification. 
  • Biometric verification: Uses unique physical characteristics for authentication (e.g., fingerprints, iris patterns, facial features, voice). It’s widely used in devices and for secure application access. 
  • Liveness detection: Confirms the authenticity of live selfies, combatting spoofing attempts. Advanced tech can detect the use of face masks, photos, or other deceptive methods.
  • Knowledge-based authentication (KBA): Presents users with a set of personalized questions that help confirm someone’s identity based on their unique knowledge.
  • Trusted identity network: Uses an individual’s established credentials with a trusted provider for identity verification. This reduces friction in account creation and onboarding processes.

How Does Digital Identity Verification Work Using Verifiable Credentials?

Verifiable credentials are revolutionizing digital identity verification, making it quicker, more secure, and user-centric. A verifiable credential is a digital representation of information or claims about a person, organization, or entity. It's like having a virtual version of your driver's license, diploma, or other documents, but in a secure and tamper-proof digital format. 

Other examples of documents that can be issued as verifiable credentials:

  • Passport
  • Vaccination record
  • Marriage certificate
  • Professional memberships

These credentials can be cryptographically verified, which means they come with a digital seal of authenticity, making it possible to confirm their accuracy and legitimacy without the need to contact their issuer. Verifiable credentials give individuals more control over their personal information and enable them to share specific details selectively, enhancing privacy and security in the digital age.

Instant Verification

One of the standout features of verifiable credentials is their ability to enable instant identity verification. This is possible because they're based on cryptographic proofs, which means they can be verified without needing to contact the issuer or an intermediary each time. 

So, when a user presents a verifiable credential in a digital transaction, the verifier (such as a website or app) can automatically and almost instantaneously check its authenticity. This slashes the time traditionally needed for verification processes, which often involve back-and-forth communications, document submissions, and manual reviews.

Enhanced Security and Privacy

Verifiable credentials are designed using advanced cryptography, making them tamper-evident and only verifiable using the issuer's public key. This means they're incredibly tough for fraudsters to fake. They also empower users with control over their data, allowing them to choose what information to share, with whom, and when.

Enabling Trust and Reliability

Trust is the currency of the digital world. Verifiable credentials enhance trust by providing a reliable way to verify information online. Because these credentials are issued by trusted entities and verified cryptographically, they carry a seal of trust, assuring both parties of the information's accuracy and legitimacy.

Improved User Experience and Accessibility

Convenience and inclusivity are essential in user experience, and verifiable credentials cater to both. Users can store their credentials on their devices, making them easily accessible and portable. This eliminates the need for repeated, tiresome verification processes, making online interactions smoother. 

For example, identity verification companies can issue users a reusable identity as a verifiable credential after they complete a verification check that can be used to access other services. 

What Is Digital Identity Verification With an Example?

Physical methods of identity verification as well as older forms of digital identity verification have been used for a long time. However, as cyber threats grow more sophisticated, it's become clear that these conventional methods are no longer sufficient on their own. 

That’s why innovative solutions like verifiable credentials have been developed to offer more protection and privacy for digital identity verification. Below are two examples of a physical identity verification process and one using verifiable credentials to establish trust and security in the digital world.

Physical Identity Verification Example

Let’s say Jim Miller is a constructor worker who is looking for a job. A construction company is looking to hire many workers quickly but need to make sure that all new hires have “Fall Arrest” training certificate issued by ABC training. 

Here’s how the process would be with physical identity verification. 

1. Jim completes his training and ABC gives him a physical certificate of completion that includes his name, date of completion, and the instructor’s signature. This certificate is very easy for someone to forge and present to construction companies who don’t do digital identity verification. 

2. Jim applies for a construction position and one of the company’s HR staff asks him to show his Fall Arrest training certificate. 

3. The HR staff has to physically call and email ABC Training to double check that his certificate is valid. This process is very time-consuming, expensive, and delays the hiring process, especially when you need to hire a lot of workers.

Enhanced Digital Identity Verification Using Verifiable Credentials

Let’s say Tyler is applying to Fate Home Construction as a construction worker. The company needs to hire many people in a short time for a project and need to ensure that everyone has a valid Work at Height training certificate from ABC Training, a trusted issuer.

1. First, Tyler passes his Work at Height training course and ABC Training issues a certificate as a verifiable credential that he securely stores on his Dock Wallet. The credential includes his license number, name, and email.

Verifiable credentials in the Dock Wallet

2. During the online job application, HR sends Tyler a QR code to verify his Work at Height credential.

Digital identity verification request

3. After Tyler scans the QR code, he can choose the relevant credential to present to HR.

Tyler selects the relevant credential

4. To preserve his privacy, Tyler chooses to only present his Work at Height license number to HR and no other irrelevant details on his credential.

Tyler can selectively disclose only relevant information in the digital identity verification process.

5. Once Tyler presents the credential, HR can instantly confirm that it was indeed issued by ABC Training and hasn't been tampered with.

Verified credential

Digital Identity Verification Regulations and Standards

Regulations and standards play a crucial role in shaping the landscape of digital identity verification around the world. These rules not only ensure the security and integrity of online interactions, but also safeguard individuals and organizations from identity-related fraud and risks. 

These are some of the key digital identity verification regulations and standards from various regions: 

European Union (EU)

One significant regulation that is shaping Europe’s digital future is eIDAS (Electronic Identification and Trust Services Regulation), which governs electronic identification and trust services within the EU. It sets the groundwork for recognizing and accepting electronic signatures, ensuring their legal validity and trustworthiness. 

United States

Digital identity verification is governed by several regulations, most notably the Customer Identification Program (CIP). It requires financial institutions, including banks, to establish and maintain a CIP that verifies the identity of individuals who enter into banking relationships. This regulation aims to prevent money laundering, terrorist financing, and other financial crimes.


The Personal Information Protection and Electronic Documents Act (PIPEDA) sets the rules for how organizations handle personal information, including digital identity data. PIPEDA emphasizes the importance of obtaining informed consent from individuals when collecting, using, and disclosing their personal information, enhancing privacy and security.


Australia's Digital Transformation Agency (DTA) has established the Trusted Digital Identity Framework (TDIF). This framework provides guidance for the government and private sector on digital identity verification practices, emphasizing interoperability, security, and user-centric design.

Global Standards

Standards organizations like the International Organization for Standardization (ISO) and the World Wide Web Consortium (W3C) play pivotal roles in developing and promoting standards for digital identity verification. ISO 27001, for example, sets the standards for information security management systems, including data protection and identity verification practices.

Verifiable Credential Standards

World Wide Web Consortium's (W3C) Verifiable Credential standards provide a framework for creating, issuing, and verifying digital credentials in a secure, privacy-respecting, and interoperable manner.

Here are the key benefits of these standards: 


  • Global Reach: These standards foster interoperability on a global scale, enabling credentials to be recognized and accepted internationally, making them invaluable for cross-border transactions and interactions.
  • Common Data Model: W3C's standards establish a common data model for verifiable credentials, ensuring that they can be understood and processed consistently across various systems and applications.

Compliance and Future-Proofing

Organizations adopting W3C's standards are more likely to stay compliant with evolving digital identity regulations and best practices.

Efficiency and Streamlined Processes

Verifiable credentials streamline processes that require identity verification, reducing paperwork, manual checks, and administrative burdens.

Dock’s Digital Identity Verification Technology

Dock's digital identity verification tech preserves privacy

Dock is a pioneer in developing verifiable credential technology since 2017. People and organizations can instantly verify credentials using the Dock platform which includes our API and web app. 

Organizations can use Dock Certs, the no-code web app, to create a verification request and send the verification QR code to users. Users scan the code with their digital wallet and the credential is verified in seconds while maintaining their privacy and security.


The world of digital identity verification is undergoing a transformative shift, driven by the need for enhanced security, privacy, and efficiency in our online interactions. As we've explored, traditional methods of identity verification are no longer sufficient to combat the evolving landscape of cyber threats. 

Instead, innovative solutions like verifiable credentials are paving the way for a more secure, user-centric, and interconnected digital future. With the power to streamline processes, protect sensitive information, and enable seamless interoperability, these advancements hold the promise of not only safeguarding our digital identities but also reshaping the way we interact, transact, and trust in the online world. 

About Dock

Dock’s Verifiable Credential platform makes any data fraud-proof and instantly verifiable. It comprises the Certs API, the Certs no-code web app, an ID wallet and a dedicated blockchain. Using Dock, organizations reduce data verification costs while increasing the operational efficiency of verifying and issuing digital credentials. Individuals can fully control their data to access products and services more conveniently in a privacy-preserving way. Dock has been a leader in decentralized digital identity technology since 2017 and trusted by organizations in diverse sectors, including healthcare, finance, and education.

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