Digital Identity and Blockchain: Exploring the EU Digital Identity Framework

A Digital ID is an electronic form of identification that allows individuals to prove who they are online when accessing government services or private sector platforms. It simplifies identity verification, replacing the need for physical copies of traditional identity documents like passports or driver licenses. Through a digital id system, users can securely store and use their identity documents online, providing a simple and secure way to interact with organizations and services.

By 2030, it’s expected that digital identity services will become the norm, ensuring that individuals have a way to prove their identities online securely.

Why Digital Identity became Important?

In today’s digital age, having a digital id system is crucial for accessing both government services and private sector offerings. Traditional identity documents, such as a birth certificate or passport, are vulnerable to theft, forgery or loss. A digital id provides a more secure, efficient alternative. Online services rely heavily on identity verification, and using digital identity services helps users avoid the risk of fraud while protecting their personal details.

For businesses and governments alike, digital identity services build trust and promote compliance with privacy regulations, ensuring secure, inclusive access to services for all citizens.

EU Digital Identity Framework

The Digital ID Act, adopted in 2021, strengthens national eID systems under eIDAS regulations, making it mandatory for member states to notify their eID systems. This enables national eIDs to be used across the EU, streamlining identity verification and improving cross-border access to services.

The **European Digital Identity Framework** aims to create a unified, secure electronic identification system across the EU. Currently, 19 notified eID schemes cover 59% of the EU population. This framework provides citizens with an interoperable digital id system to access services across borders while maintaining control over their identity documents and data.

The initiative offers a voluntary, user-controlled digital identity stored in a personal wallet, which holds credentials like driving licenses, diplomas, and tax information. The EU Digital Identity Wallet gives users full control over which information they share, enhancing privacy and security. It ensures strong identity strength and secure authentication, making it safe to access services such as banking, healthcare, and public administration.

The 3 pillars of EUDI

The EU Digital Identity Framework is built on three core pillars that aim to enhance the security, effectiveness, and accessibility of digital identity systems across Europe. These pillars ensure that citizens can verify their identity securely and control their personal data while benefiting from a seamless digital experience across the EU.

1. Strengthening National eIDsThe first pillar focuses on strengthening national eID systems under the eIDAS (Electronic Identification, Authentication, and Trust Services) regulation. Member states are now required to notify their national eIDs to the European Commission, ensuring that they are recognized across all EU countries. This mutual recognition improves the effectiveness and efficiency of cross-border identity verification, allowing users to easily access services in other member states. By mandating that national eIDs be notified, the framework ensures that these eIDs remain the cornerstone of the EU Digital Identity ecosystem.
2. Private Sector as a Provider of Identity-Linked ServicesThe second pillar opens the door for the private sector to play a significant role in offering identity-linked services. Private companies can now offer digital identity solutions and related services, such as issuing credentials or providing authentication, while adhering to strict regulations and standards set by the framework. These companies must follow rules applicable to qualified trust services, which are anchored in national eID systems. This encourages the private sector to innovate and provide secure, reliable services to users across the EU.
3. User-Controlled Digital Identity – The Personal WalletThe third and most user-focused pillar introduces the EU Digital Identity Wallet, a secure mobile application that allows individuals to store and manage their identity data and credentials. The wallet, which is fully under the user’s control, enables citizens to securely store identity information, such as driving licenses, diplomas, or tax credentials, and use them across borders. With this digital wallet, users can decide what information to share and with whom, ensuring full control over their personal data. This system enhances user experience, supports data portability, and offers privacy by design, meaning no tracking of the user’s activity or personal information without their consent.

By building on these three pillars, the EU Digital Identity Framework provides a secure, interoperable, and user-friendly system that meets the needs of citizens, businesses, and governments alike. Whether accessing public services or interacting with private platforms, users can rely on their EU Digital Identity Wallet to manage their credentials in a way that is both secure and simple.

Digital Identity, Blockchain, and Decentralized Identifiers (DIDs)

The European Commission has recognized the potential of blockchain technology and is incorporating it into areas like digital identity to enhance trust, security, and privacy. As part of its strategy, the Commission aims to support a ‘gold standard’ for blockchain that aligns with European values, such as environmental sustainability, data protection, and cybersecurity. This framework is designed to ensure blockchain technology integrates with existing regulations, like eIDAS, while promoting self-sovereign identity models.

The EU Digital Identity Wallet brings digital identity to life by allowing individuals to store and manage their personal information securely. It’s more than just a concept; it’s a practical tool built with advanced technologies like biometrics, blockchain, and cryptography to ensure privacy and security. Here’s how it all works:

How the Digital Identity Wallet Works

1. Biometric Authentication: The wallet uses biometric features such as facial recognition or fingerprint scanning to authenticate the user. This adds an extra layer of security, ensuring that only the rightful owner can access and use their digital identity. When a person wants to use their digital ID, they simply verify their identity using their face or fingerprint, similar to unlocking a smartphone.
2. Secure Storage and Access: The wallet stores various identity credentials like driver licenses, passports, and health records. These credentials are digitally signed and verified using cryptography to ensure they are authentic and cannot be tampered with. The wallet uses encryption to protect data, meaning that only the user can access or share their information. Even if someone else gains access to the wallet, they would not be able to read the encrypted data without the user’s unique key.
3. Blockchain and DIDs: When a credential is added to the wallet, it’s linked to a Decentralized Identifier (DID) stored on a blockchain. This creates an immutable, tamper-proof record of the identity, allowing users to prove who they are without the need for a central authority. For example, when accessing a government service or signing up for a bank account, the user can share a verified credential from their wallet, and the service provider can confirm its authenticity through the blockchain. This process ensures that the information is accurate and has not been altered.
4. User Control and Privacy: The wallet is designed with user privacy in mind. It gives users full control over their data, allowing them to decide which information to share and with whom. For instance, when proving their age, a user can share just their date of birth without revealing their full name or address. Thanks to cryptography and blockchain, the data remains secure and is only shared with the user’s consent. In some situations, you’ll even be able to identify yourself entirely anonymously, for further privacy and security.
5. Interoperability: The EU Digital Identity Wallet is designed to work seamlessly across borders and services. It follows strict technical specifications to ensure that it can be used for a variety of purposes, from accessing healthcare services in another EU country to proving qualifications for a job. This interoperability is made possible through common standards and the use of cryptographic protocols that are recognized and trusted across the EU.

Security and Privacy

The wallet employs several security measures to protect user data. For instance, multi-factor authentication is required, meaning that in addition to biometric verification, users might need to provide a PIN or another form of identification to access sensitive information. Furthermore, the use of blockchain technology ensures that any credential stored in the wallet is immutable, meaning it cannot be changed or forged once it has been recorded.

The EU Digital Identity Wallet uses advanced cryptography to secure the transmission of data. Whenever a user shares their identity information, it’s encrypted, ensuring that only the intended recipient can access it. Additionally, since the wallet is built on blockchain, every transaction or data exchange is recorded in a transparent, tamper-proof ledger, which helps prevent fraud and unauthorized access.

By combining biometric authentication, blockchain, and cryptography, the EU Digital Identity Wallet offers a secure and user-friendly way to manage and use digital identities, ensuring both convenience and the highest levels of privacy and security.

Read more about the security and privacy of the Digital Identity wallet features

How DIDs Replace Traditional IDs

The EU Digital Identity Wallet uses Decentralized Identifiers (DIDs) to replace traditional IDs like passports or driver licenses with a digital version that you control. Here’s how it works:

Steps to Use a DID

1. Create Your DID: You start by creating a DID through the EU Digital Identity Wallet app. This is like making a digital version of your ID. The DID is stored on the blockchain, making it secure and tamper-proof.
2. Add Your Credentials: Link important documents to your DID, like your driver license, passport, or university degree. These documents are verified and stored in your digital wallet, so you don’t need to carry physical copies.
3. Use Your DID: When you need to prove who you are like opening a bank account or renting a car you select the relevant credential from your wallet. The wallet shares only the information needed. For example, if you need to prove your age, it can do that without showing other personal details.
4. Verify Your Identity: The service provider checks your information against the blockchain to make sure it’s genuine. The blockchain acts as a trusted record, ensuring the data hasn’t been changed or faked.
5. Control and Consent: You are always in charge of what information you share. The wallet is designed to keep your data private and secure, and you can decide who gets to see it.

Real-World Examples

• Travel: Use your DID instead of a physical passport to pass through airport security.
• Healthcare: Share your medical history with doctors securely without filling out forms each time.
• Education: Prove your qualifications when applying for jobs or schools easily.
• Banking: Open a bank account faster by verifying your identity with your digital wallet.

By using DIDs and the EU Digital Identity Wallet, you can replace traditional IDs with a secure digital version that makes it easier and safer to prove who you are. The blockchain ensures all data is encrypted and verifiable, so only you control access to your information.

Read the full use cases and real life application of EU digital identity wallet

Which Countries Have Digital ID?

Many countries have adopted digital id systems, with varying levels of implementation:

• Europe: Countries like Estonia and Sweden are leading the charge with fully integrated digital id systems for both government and private sector services.
• North America: Both the U.S. and Canada are increasingly embracing digital identity solutions, though they often rely on id providers from the private sector for identity verification.
• Africa: Countries like Kenya and Nigeria are developing their own digital id systems ecitizen and nimc to improve access to essential government services. on the other side Ethiopia has started Fayda digital id.
• Asia: India’s Aadhaar program remains the largest digital id system in the world, with over a billion users.
• Oceania: Australia has implemented the MyGovID app, a secure and easy way to access Australian government services online.

These examples show how digital id systems are becoming increasingly important worldwide.

Digital Identity 2030

Looking ahead to 2030, digital ID systems are expected to change significantly. By then, identity verification will become much smoother, powered by technologies like blockchain. These advancements will allow people to create their digital ID and access various government online services quickly and safely. The United Nations aims to provide “legal identity for all,” including birth registration, by 2030.

One exciting possibility for digital IDs is a fully decentralized system where information is stored securely with no single point of failure. This helps protect sensitive details like personal email addresses, full names, and dates of birth stored in official records.

However, a key challenge is getting everyone to use these systems. Not all citizens may feel ready or have the tools to handle a digital wallet. Some may not be familiar with using digital tools or may worry about their data being safe online. Others might not have access to the necessary technology, like a reliable internet connection or a smartphone. To make sure everyone can benefit, it’s important to educate users, ensure that the system is easy to use, and provide clear information about how their data is protected.

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