Based on research by Leo Petersen-Khmelnitski and Cecilia Price

A digital identity is an automatically generated number, which is issued in some countries for tax or social security purposes. 

With technological developments and advances in new biology, the use of digital identities is constantly evolving and a question remains over whether there will be a centralised or distributed system for digital identification in the future.

Advances in new biology coupled with big data analytics could result in the tying together of digital identification with our biological data. If we look at a human being as a data repository, this database contains records about height and weight, colour and length of hair, blood group, genetic data and more. Each of these records alone is not unique – there are other people with the same weight or eye colour – however the combination of these records is unique to a person. As a result, the future digital identification will likely be a digital representation of this combination of records.

How these records are used, however, is open to suggestion. For example, records might be kept as non-fungible tokens recorded on a distributed ledger or in a centralised government-owned and -run database. One possible format is the emerging concept of a decentralised identity, which gives back control of identity to individuals using ‘an identity wallet’ (Self Sovereign Identity, SSI) through which they can trade, exchange and share their health data or opt out. Centralised identity management systems, in contrast, might deprive original owners of the control and protection over their identities and privacy. In practice, however, centralised identity managements systems might not mean tight government control, but rather that all identity and access management (IAM) happens in one environment, whilst in decentralised systems IAM takes place in several environments.

The direction of this uncertainty will depend on the culture of innovation and the political ideologies dominant in the country. There are a number of advantages in using centralised identity management systems: quick deployment in response to threats, automated lifecycle management and unified user profiles, hence ease of single sign-ons, as well as lack of bottlenecks. The downside of any centralised system is single point of failure. Proponents of decentralised identity management systems also argue that decentralisation can mean tighter security.