top of page

Why Digital Identity is Crucial

The perception of identity is one of the most important factors that differentiates humans from most other animals. We see others and we are able to see ourselves. Research shows that self-awareness is the meta-skill of the 21st century — the foundation for high performance, smart choices, and lasting relationships. Unfortunately, we are remarkably poor judges of ourselves and how we come across.

80% of people assume they have above average Emotional Quotient (EQ) and consider themselves good at reflective thinking and personal insight. The truth, however, is quite the reverse: most people are not self-wise and very few actually understand what creates their identity or why.

Identity is not merely a personal property, it is something we gift to others too. Rather than just seeing others, identity is also formed by the manner in which an individual is recognised and acknowledged. This can be bestowed by known individuals or national institutions.

The World Bank estimates that 1.8 billion people have no legal form of identity. Without this, they are much more likely to be denied access to welfare and education or exploited in some criminal way, like slavery or trafficking.

I was brought up to believe that it is important to recognise all people as valuable, no matter what their apparent status. A “hello, how are you today?”, with a smile, eye contact and the time and inclination to listen genuinely to the answer, sets true leaders apart from their shallow counterparts. If done honestly and respectfully, a question such as this also invites self-reflection and reinforces esteem and identity in the recipient. In the increasingly online, web-based and networked world, we benefit from understanding how our physical and perceptual identity also translate into the digital world and why that is so important.

“Sikhona” and “Sawubona”

The Zulu tribe have a two-way expression that demonstrates the logic of this verbal handshake: Sikhona means ‘I am here to be seen’; and Sawubona means ‘I see you.’

Eye contact is a powerful enabler. It forces a pause in time and connects two people together in the moment and inspires better communication. In internet computer jargon, this test of connectivity can be equated to a Transmission Control Protocol (TCP) which establishes that a two-way channel is ready before communications begin.

The Zulu philosophy of ubuntu, (‘humanity towards all’) advocates mutual support for ‘bringing each other into existence.’ Thus whether interpersonal or internet protocol, a communication ‘handshake’ brings life to each entity, acknowledges potential value and invites full participation — all of which is near impossible without the recognition of identity.

Achieving Digital Identity

Digital identification has three parts:

  • Identification — binding a digital identity to a real person

  • Authentication — proving identity (and associated attributes)

  • Authorisation / Assertion — using the digital identity to gain access to information

Underpinning these components is ‘source-of-truth’ data from which to verify the user’s true identity. An institution (like a registry office, school or employer) will have the authority to digitally validate a person’s association with them and their achievements (birth, qualifications, role etc). Rather than be owned by the tech giants such as Google or Facebook, which have assumed information power from State apparatus and are using this information for financial gain, it will soon be possible for individuals to own and control this socially and economically valuable information.

Privacy is Power

Today, the emotional and financial losses resulting from online identity theft are stark. According to Aite Group, Americans lost $502.5 billion in 2019 and $712.4 billion in 2020 from identity theft. Losses are forecast to rise again in 2021, to $721.3 billion. This crime is, like the internet itself, a rapidly growing global phenomenon.

Professor Carissa Veliz, who argues that privacy is power, says:

“Without your permission, or even your awareness, tech companies are harvesting your information, your location, your likes, your habits, and sharing it amongst themselves. They’re not just selling your data. They’re selling the power to influence you.”

This does not affect just you, but also your contacts. Your identity and the reputation and behaviours associated with it are used to change how others think, feel and act. There is a growing movement who are tired of this data-driven surveillance economy and have started to claw back ownership of their personal data and information. However, due to the construction of the current world wide web and the AI that has been built by those who now have a vested interest in the status quo, this is very difficult. The result is that we still give away our information and identity freely every time we access a website, turn on a mobile phone or connect into an app or network.

‘On the Internet nobody knows you’re a dog’

We can lose our identity easily on the web today. This can be deliberate, as shown in Peter Steiner’s now famous cartoon first published in The New Yorker captioned “On the Internet, nobody knows you’re a dog”, or it can be accidental.

If, on a daily basis, we provide private details of our personal lives such as our age, address and phone or credit card number to corporations with revenue streams that rely on the sale of that data, we very quickly lose control of this information. Unfortunately, so can those to whom we have given it too. There are now countless examples of cyber crime resulting in data theft and as a consequence where these stolen ‘data points’ are personal.

People can actively hide their true identity for good reason, and many law-abiding advocates for civil liberties and personal freedom do so. A disingenuous dog, however, can pretend to be anyone, anywhere, with any level of knowledge, skill or expertise and the recipient of his communication may be none the wiser. This always disadvantages those who have lost power; whether devious con artist, dangerous criminal or data-driven corporation, the power to exploit personal data sits with those who have the knowledge, intent and motivation to do so. The average person entering this new and nebulous digital world has few guaranteed means to protect their data and their identity or to know with whom they are actually engaging online.

We need a way to simultaneously hide our digital selves and yet also reveal the elements of true identity we choose.

Digital Identity comes of age

Proving who you are, and who you are not, while protecting your identity online is already possible using blockchain, and it will become increasingly easier. I can see seven reasons for the acceleration of new digital identity tools:

  1. Demand among web users is increasing as interest in data privacy increases (for consumers, businesses and governments);

  2. Digital identity is a necessary requirement for the effective operation of an improved World Wide Web, or ‘smart-web’ (or if you think we’re in Web2 now, Web3);

  3. Digital identities will re-balance power across web users;

  4. Digital identities will drive efficiencies through improved services and speed and reduced waste. According to a report by McKinsey, the economic value of digital identity by 2030 will be the equivalent of 6% of GDP in emerging markets and 3% of GDP in developed economies;

  5. Decentralised digital identities will provide opportunities to redefine revenue streams that have not previously been considered and people will earn ‘data-dividends’ from their data and attributed to their digital identity.

  6. Individuals will gain the ability to own servers where their data is stored (e.g. Personal Cloud Computing);

  7. Commonly agreed Digital Identity Standards (like those being discussed in the W3C DID working group) will enable interoperability and compliance (whether self imposed or officially regulated) and thus reduce development costs and adoption risk.

Digital Identity as a fundamental for trusted human-to-human interaction

Cordial World believes everyone is an expert at something, and that expertise is valuable to someone, somewhere. It may be that an individual does not recognise their worth in their own identity, but even the lived experience of being in a certain place, with certain people at a certain time provides expertise in the moment. With tools like Twitter and Facebook it is easy to share those experiences, but it is hard to do so while retaining control of that knowledge and monetising it. With digital identities, it is now possible to connect people and increase their prosperity through a fair and frictionless exchange of personal lived experience and knowledge.


As digital technology steals our personal data, it also removes our power of free choice. To reclaim that power, and democracy, we must protect our privacy, enable trusted online peer-to-peer engagement and enable new methods of value creation.

The best way to do that is through secure digital identities that are owned by us, the citizens, not the large corporations. We must not be tempted to pay more to those same corporations for harsher, locked-down access to our information, with higher walls and wider moats. Instead, we must demand change.

One of the facilitating innovations that will both empower individuals to control their data and enable us all to earn fair value from it is decentralised, blockchain-secured, digital identity. When combined with smart-web technologies like personal cloud servers, decentralised storage and secure carrier networks, it will provide trust in an otherwise trustless environment and value creation opportunities that are as yet unseen by most.

15 views0 comments
bottom of page