Creating and using a digital ID is a step up from the password in document security. As you know, the electronic world is an open invitation for fraud and manipulation, since we often can’t be certain with whom we are interacting online. Digital IDs are one way of trying to combat this problem.
A Digital ID is your electronic identity when performing transactions on-line. It is issued by a Certification Authority (CA), which acts as the "middleman" by verifying your physical identity with the personal information that you submit. The personal information is used to create a digital certificate which is just like a driver's license that's used to confirm your identity. But instead of a face-to-face confirmation with a plastic card, verification is done electronically with a digital certificate. It acts as a user's credentials.
A Digital ID is usually comprised of:
Whenever you digitally sign a document or encrypt a message, this information is used as a reference. Thus, the third party authorization that collects these details is a control measure for the use of digital IDs.
The problem with Digital IDs is that there is still no standard, international body that can verify digital identity without any doubt. Banks, online payment systems, mobile phone operators and many other online agencies are developing their own systems of matching digital with real-life profiles, and hopefully we’re on the right path to creating a unified, secure platform for all sorts of digital interactions.