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A digital identity is information on an entity used by computer systems to represent an external agent. That agent may be a person, organization, application, or device. ISO/IEC 24760-1 defines identity as "set of attributes related to an entity".
The information contained in a digital identity allows for assessment and authentication of a user interacting with a business system on the web, without the involvement of human operators. Digital identities allow our access to computers and the services they provide to be automated, and make it possible for computers to mediate relationships.
The term "digital identity" has also come to denote aspects of civil and personal identity that have resulted from the widespread use of identity information to represent people in computer systems.
Digital identity is now often used in ways that require data about persons stored in computer systems to be linked to their civil, or national, identities. Furthermore, the use of digital identities is now so widespread that many discussions refer to "digital identity" as the entire collection of information generated by a person’s online activity. This includes usernames and passwords, online search activities, birth date, social security, and purchasing history. Especially where that information is publicly available and not anonymized, and can be used by others to discover that person's civil identity. In this wider sense, a digital identity is a version, or facet, of a person's social identity. This may also be referred to as an online identity.
The legal and social effects of digital identity are complex and challenging. However, they are simply a consequence of the increasing use of computers, and the need to provide computers with information that can be used to identify external agents.
A critical problem in cyberspace is knowing with whom one is interacting. Using static identifiers such as password and email there are no ways to precisely determine the identity of a person in digital space, because this information can be stolen or used by many individuals acting as one. Digital identity based on dynamic entity relationships captured from behavioral history across multiple websites and mobile apps can verify and authenticate an identity with up to 95 percent accuracy.
By comparing a set of entity relationships between a new event (e.g., login) and past events, a pattern of convergence can verify or authenticate the identity as legitimate where divergence indicates an attempt to mask an identity. Data used for digital identity is generally anonymized using a one-way hash, thereby avoiding privacy concerns. Because it is based on behavioral history, a digital identity is impossible to fake or steal.
A digital identity may also be referred to as a Digital Subject or Digital entity and is the digital representation of a set of claims made by one party about itself or another person, group, thing or concept.
Every digital identity has zero or more identity attributes. Attributes are acquired and contain information about a subject, such as medical history, purchasing behaviour, bank balance, age and so on. Preferences retain a subject's choices such as favourite brand of shoes, preferred currency. Traits are features of the subject that are inherent, such as eye colour, nationality, place of birth. While attributes of a subject can change easily, traits change slowly, if at all. Digital identity also has entity relationships derived from the devices, environment and locations from which an individual transacts on the web.
In order to assign a digital representation to an entity, the attributing party must trust that the claim of an attribute (such as name, location, role as an employee, or age) is correct and associated with the person or thing presenting the attribute (see Authentication below). Conversely, the individual claiming an attribute may only grant selective access to its information, e.g. (proving identity in a bar or PayPal authentication for payment at a web site). In this way, digital identity is better understood as a particular viewpoint within a mutually-agreed relationship than as an objective property.
Authentication is a key aspect of trust-based identity attribution, providing a codified assurance of the identity of one entity to another. Authentication methodologies include the presentation of a unique object such as a bank credit card, the provision of confidential information such as a password or the answer to a pre-arranged question, the confirmation of ownership of an e-mail address, and more robust but relatively costly solutions utilizing encryption methodologies. In general, business-to-business authentication prioritises security while user to business authentication tends towards simplicity. Physical authentication techniques such as iris scanning, handprinting, and voiceprinting are currently being developed and in the hope of providing improved protection against identity theft. Those techniques fall into the area of Biometry (biometrics). A combination of static identifiers (Username&passwords) along with personal unique attributes (biometrics), would allow for multi factor authentication. This process would yield more creditable authentication, which in nature is much more difficult to be cracked and manipulated.
Whilst technological progress in authentication continues to evolve, these systems do not prevent aliases being used. The introduction of strong authentication for online payment transactions within the European Union now links a verified person to an account, where such person has been identified in accordance with statutory requirements prior to account being opened. Verifying a person opening an account online typically requires a form of device binding to the credentials being used. This verifies that the device that stands in for a person on the Web is actually the individuals device and not the device of someone simply claiming to be the individual. The concept of reliance authentication makes use of pre-existing accounts, to piggy back further services upon those accounts, providing that the original source is reliable. The concept of reliability comes from various anti-money laundering and counter-terrorism funding legislation in the USA, EU28, Australia, Singapore and New Zealand where second parties may place reliance on the customer due diligence process of the first party, where the first party is say a financial institution. An example of reliance authentication is PayPal's verification method.
Authorization is the determination of any entity that controls resources that the authenticated can access those resources. Authorization depends on authentication, because authorization requires that the critical attribute (i.e., the attribute that determines the authorizer's decision) must be verified. For example, authorization on a credit card gives access to the resources owned by Amazon, e.g., Amazon sends one a product. Authorization of an employee will provide that employee with access to network resources, such as printers, files, or software. For example, a database management system might be designed so as to provide certain specified individuals with the ability to retrieve information from a database but not the ability to change data stored in the database, while giving other individuals the ability to change data.
Consider the person who rents a car and checks into a hotel with a credit card. The car rental and hotel company may request authentication that there is credit enough for an accident, or profligate spending on room service. Thus a card may be refused when trying to book the balloon trip, though there is adequate credit to pay for the rental, the hotel, and the balloon trip. Then when the person leaves the hotel and returns the car, the actual charges are authorized (too late for the balloon trip).
Valid online authorization requires analysis of information related to the digital event including device and environmental variables. These are generally derived from the hundreds of entities exchanged between a device and business server to support an event using standard Internet protocols.
Digital identity fundamentally requires digital identifiers—strings or tokens that are unique within a given scope (globally or locally within a specific domain, community, directory, application, etc.). Identifiers are the key used by the parties to an identification relationship to agree on the entity being represented. Identifiers may be classified as omnidirectional and unidirectional. Omnidirectional identifiers are intended to be public and easily discoverable, while unidirectional identifiers are intended to be private and used only in the context of a specific identity relationship.
Identifiers may also be classified as resolvable or non-resolvable. Resolvable identifiers, such as a domain name or e-mail address, may be dereferenced into the entity they represent, or some current state data providing relevant attributes of that entity. Non-resolvable identifiers, such as a person's real-world name, or a subject or topic name, can be compared for equivalence but are not otherwise machine-understandable.
There are many different schemes and formats for digital identifiers. The most widely used is Uniform Resource Identifier (URI) and its internationalized version Internationalized Resource Identifier (IRI)—the standard for identifiers on the World Wide Web. OpenID and Light-Weight Identity (LID) are two web authentication protocols that use standard HTTP URIs (often called URLs), for example.
Digital Object Architecture (DOA) provides a means of managing digital information in a network environment. A digital object has a machine and platform independent structure that allows it to be identified, accessed and protected, as appropriate. A digital object may incorporate not only informational elements, i.e., a digitized version of a paper, movie or sound recording, but also the unique identifier of the digital object and other metadata about the digital object. The metadata may include restrictions on access to digital objects, notices of ownership, and identifiers for licensing agreements, if appropriate.
The Handle System is a general purpose distributed information system that provides efficient, extensible, and secure identifier and resolution services for use on networks such as the internet. It includes an open set of protocols, a namespace, and a reference implementation of the protocols. The protocols enable a distributed computer system to store identifiers, known as handles, of arbitrary resources and resolve those handles into the information necessary to locate, access, contact, authenticate, or otherwise make use of the resources. This information can be changed as needed to reflect the current state of the identified resource without changing its identifier, thus allowing the name of the item to persist over changes of location and other related state information. The original version of the Handle System technology was developed with support from the Defense Advanced Research Projects Agency (DARPA).
A new OASIS standard for abstract, structured identifiers, XRI (Extensible Resource Identifiers), adds new features to URIs and IRIs that are especially useful for digital identity systems. OpenID also supports XRIs, and XRIs are the basis for i-names.
Risk-Based Authentication is a commercial application of digital identity whereby multiple entity relationship from the device (e.g., operating system), environment (e.g., DNS Server) and data entered by a user for any given transaction is evaluated for correlation with events from known behaviors for the same identity. Analysis are performed based on quantifiable metrics, such as transaction velocity, locale settings (or attempts to obfuscate), and user-input data (such as ship-to address). Correlation and deviation are mapped to tolerances and scored, then aggregated across multiple entities to compute a transaction risk-score, which assess the risk posed to an organization.
There are proponents of treating self-determination and freedom of expression of digital identity as a new human right. Some have speculated that digital identities could become a new form of legal entity.
Digital identity attributes—or data—exist within the context of ontologies.
The development of digital identity network solutions that can interoperate taxonomically-diverse representations of digital identity is a contemporary challenge. Free-tagging has emerged recently as an effective way of circumventing this challenge (to date, primarily with application to the identity of digital entities such as bookmarks and photos) by effectively flattening identity attributes into a single, unstructured layer. However, the organic integration of the benefits of both structured and fluid approaches to identity attribute management remains elusive.
Identity relationships within a digital network may include multiple identity entities. However, in a decentralised network like the Internet, such extended identity relationships effectively require both (a) the existence of independent trust relationships between each pair of entities in the relationship and (b) a means of reliably integrating the paired relationships into larger relational units. And if identity relationships are to reach beyond the context of a single, federated ontology of identity (see Taxonomies of identity above), identity attributes must somehow be matched across diverse ontologies. The development of network approaches that can embody such integrated "compound" trust relationships is currently a topic of much debate in the blogosphere.
Integrated compound trust relationships allow, for example, entity A to accept an assertion or claim about entity B by entity C. C thus vouches for an aspect of B's identity to A.
A key feature of "compound" trust relationships is the possibility of selective disclosure from one entity to another of locally relevant information. As an illustration of the potential application of selective disclosure, let us suppose a certain Diana wished to book a hire car without disclosing irrelevant personal information (utilising a notional digital identity network that supports compound trust relationships). As an adult, UK resident with a current driving license, Diana might have the UK's Driver and Vehicle Licensing Agency vouch for her driving qualification, age and nationality to a car-rental company without having her name or contact details disclosed. Similarly, Diana's bank might assert just her banking details to the rental company. Selective disclosure allows for appropriate privacy of information within a network of identity relationships.
A classic form of networked digital identity based on international standards is the "White Pages".
An electronic white pages links various devices, like computers and telephones, to an individual or organization. Various attributes such as X.509v3 digital certificates for secure cryptographic communications are captured under a schema, and published in an LDAP or X.500 directory. Changes to the LDAP standard are managed by working groups in the IETF, and changes in X.500 are managed by the ISO. The ITU did significant analysis of gaps in digital identity interoperability via the FGidm, focus group on identity management.
Implementations of X.500 and LDAPv3 have occurred worldwide but are primarily located in major data centers with administrative policy boundaries regarding sharing of personal information. Since combined X.500  and LDAPv3 directories can hold millions of unique objects for rapid access, it is expected to play a continued role for large scale secure identity access services. LDAPv3 can act as a lightweight standalone server, or in the original design as a TCP-IP based Lightweight Directory Access Protocol compatible with making queries to a X.500 mesh of servers which can run the native OSI protocol.
This will be done by scaling individual servers into larger groupings that represent defined "administrative domains", (such as the country level digital object) which can add value not present in the original "White Pages" that was used to look up phone numbers and email addresses, largely now available through non-authoritative search engines.
The ability to leverage and extend a networked digital identity is made more practicable by the expression of the level of trust associated with the given identity through a common Identity Assurance Framework.
Self-sovereign identity (SSI) is the concept that people can store information about their digital identity in a location of their choice. This information can then provide to third parties on request. With the development of blockchain technologies decentralized identities can be based on SSI that are not owned by a single provider.
With automated face recognition, tagging, location tracking and widespread digital authentication systems many actions of a person become easily associated with identity, as a cause, sometimes privacy is lost and security is subverted. An identity system that builds on confirmed pseudonyms can provide privacy and enhance security for digital services and transactions. Cyberspace creates opportunities for identity theft. Exact copies of everything sent over a digital communications channel can be recorded. Thus, cyberspace needs a system that allows individuals to verify their identities to others without revealing to them the digital representation of their identities.
An anonymous attribute is one that retains its uniqueness, but is put through a one-way hash so that it is represented in a string of characters that have no innate meaning or value. The one-way hash is an algorithm of inordinate complexity that generates the character string so that it is indecipherable compared to the original. In this way, a social security number, can be retained for attribute comparison, but the values used for comparison, while unique, would in no way resemble the original social security number.
Clare Sullivan presents the grounds for digital identity as an emerging legal concept. The UK's Identity Cards Act 2006 confirms Sullivan's argument and unfolds the new legal concept involving database identity and transaction identity. Database identity refers to the collection of data that is registered about an individual within the databases of the scheme and transaction identity is a set of information that defines the individual's identity for transactional purposes. Although there is reliance on the verification of identity, none of the processes used are entirely trustworthy. The consequences of digital identity abuse and fraud are potentially serious, since in possible implications the person is held legally responsible.
Corporations have begun to recognize the Internet's potential to facilitate the tailoring of the online storefront to each individual customer. Purchase suggestions, personalised adverts and other tailored marketing strategies are a great success to businesses. Such tailoring however, depends on the ability to connect attributes and preferences to the identity of the visitor.
While many facets of digital identity are universal owing in part to the ubiquity of the Internet, some regional variations exist due to specific laws, practices and government services that are in place. For example, Digital identity in Australia can utilize services that validate Driving licences, Passports and other physical documents online to help improve the quality of a digital identity, also strict Anti-money laundering policies mean that some services, such as money transfers need a stricter level of validation of digital identity.
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