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Digital Identity: Why It Is The Zenith To Web3?

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.

Digital Identity

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.


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.


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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