DIDs & VCs in Digital Wallets

(How wallets store and manage credentials.)

Decentralized Identifiers (DIDs)

DIDs are globally unique identifiers that allow individuals to control their identity without relying on a central issuing authority. Unlike traditional identifiers such as usernames or government-issued ID numbers, DIDs are decentralized and can be resolved across various blockchain and identity networks.

How DIDs Work in Digital Wallets

• A user generates a DID and stores it in their digital wallet.

• The DID is linked to a cryptographic key pair.

• The user can prove ownership of their DID using cryptographic signatures, enabling secure, private interactions online and offline.

Verifiable Credentials (VCs)

VCs are digitally signed identity proofs issued by trusted entities like governments, universities, or businesses. They allow users to prove claims about their identity, qualifications, or access rights without exposing excessive personal data.

How VCs Work in Digital Wallets

• An issuer (e.g., a university) signs a VC attesting to a claim (e.g., a diploma).

• The credential is stored in the user's digital wallet.

• When verification is needed, the user can selectively disclose the necessary information without revealing their entire identity.

Benefits of DIDs & VCs in Digital Wallets

• User control & privacy – No central authority can revoke or alter credentials.

• Interoperability – VCs can be used across different identity networks, services, and borders.

• Fraud prevention – Cryptographic signatures ensure credentials are tamper-proof.

🔗 Sources:

• W3C DID Standard: https://www.w3.org/TR/did-core/

• W3C Verifiable Credentials Data Model: https://www.w3.org/TR/vc-data-model/