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The World Of Web 3’s Digital Decentralized Identities

Written by: Coinpedia

June 6, 2022

In our modern age of the internet, you can’t go more than one or two days without signing up for a new service, creating a new profile, or downloading a new application. With this, you’re required to create a new digital identity, find a username that isn’t taken, and type out yet another password. NordPass has revealed that the average user of the internet needs to remember over 100 passwords, demonstrating how extreme the practice of creating new accounts has become.

This world of Web 2, where each application requires a new account, has rapidly become overwhelming when it comes to creating a digital identity. But, as Web 3 rises to the surface and continues to develop, decentralized digital identities are presenting a new pathway for us to follow.

Decentralized identities within the ecosystem of Web 3 are singular accounts through which users can access everything on the internet. As each of these profiles is deeply customized to the user, they then only need one account for everything, ranging from accessing social sites to logging into their crypto wallets.

In this article, we’ll be exploring the concept of decentralized identity, explaining how they work, the technology behind them, and the companies that are currently at the forefront of their creation.

What is a Decentralized Identity?

A decentralized identity is Web 3’s solution to the sheer number of different accounts that the average Web 2 user has to have. Instead of creating a new account for every single service you use, a decentralized identity is one repository that will store all the information about a person. 

As it is decentralized, this does not rely on any company, with the identity belonging completely to the user themselves. With this, Web 3 boosts the accessibility of their system, providing a smooth and seamless integration of identity into all of their application. Over time, this will lead to a more homogenous, user-built and user-owner system where people have total control of their identity and, therefore, their data.

Why is Web 3 So Perfectly Orientated for Digital Identity?

At the very center of Web 3 lie ideas about user-lead ownership, with this new era of the internet bringing with it a system where everyone owns absolutely all the content that they create. While Web 2 was full of social media accounts that post content, but don’t actually own anything they post, Web 3 acts as the solution. 

Anything created within Web 3, including the data that an individual generates as they navigate, belongs directly to them. With this, having a digital identity provides users with an easy method of managing their contact with this whole ecosystem. Formed from many parts like an identity wallet, an identity owner, and a decentralized identifier (known as a DID), these accounts become a singular repository for a person’s whole identity.

With blockchain technology at the heart of Web 3, it’s no wonder that decentralized systems have become the solution to Web 2’s identity problem. As blockchain provides transparency and traceability, the system of verifying that someone is who they say they are is completely possible.

If followed, by using the power of blockchain and the inherent goals of Web 3, identity will become something that is completely controlled by the user themselves. This results in users having total power over their own internet selves, as well as helping to prevent cases of identity fraud. As identity fraud due to stolen information on the internet is rising, this couldn’t come at a better time. 

How NFTs come into Digital Identity

You can’t discuss digital identities within Web 3 without looking at one of the main technologies that are allowing them to flourish – NFTs. NFTs, more commonly known due to their presence in the world of digital art, are digital assets that cannot be duplicated. Created on a smart contract, each NFT is unique, meaning these are a great vessel for identification.

The idea behind digital identity on Web 3 is that everyone is assigned an NFT that represents them. As these are all unique, there will be no two profiles that are alike, reflecting humanity itself. Alongside this poetic idea, this also provides a solid basis for security, with the smart contracts that NFTs are minted on being incredibly easy to validate when checking for identity.

NFTs, as assets that cannot be duplicated and can be assigned to DIDs, are the perfect tool that has allowed this idea of decentralized identity to flourish.

What Platforms are At the Front of the Charge?

Of course, in order to create a comprehensive system that personalizes and distributes digital identities, there needs to be infrastructure in place to do so. That’s where Web3 companies come in, with a few names leading the charge toward creating a comprehensive system.

Currently, the two leading digital identity companies are:

  • Gamma
  • Selfkey

Let’s break down what exactly these companies are currently working on.


Gamma, the third letter in the Greek alphabet, positions itself as a decentralized social identity hub for Web 3. As the world’s first Web3 social identity system, they are very much leading the charge in the development of digital identities. At its core, it is a user-first marketplace that allows people to explore different NFTs and pick ones that they like. From there, they can choose an NFT to represent their identity, making this the core of their online identity.

These NFTs are secured by Bitcoin, acting as one of the only companies that have created a large NFT marketplace within this blockchain system. Within this world, they have ensured that Gamma is always creator-first, aligning directly with the core sentiments of Web 3.0 itself. 

By using this platform, you’ll never have to have multiple accounts again, instead just turn towards your unique NFT to cover your own identity. By using this unique NFT, you’ll be able to access your accounts and get into your systems. As all NFTs use smart contracts, Gamma will use validation to ensure that the person accessing your files is indeed registered to your NFT, creating a homogenous layer of social security.

With this, Gamma demonstrates how NFTs can be incorporated into the world of digital identities, with this company positing itself at the forefront of this technology. 


Selfkey is another platform that’s sole purpose is to allow users to create their own decentralized identity within the world of Web 3.0. From accessing online worlds in the metaverse to gaining entry into all of your crypto accounts, Selfkey wants users to have one point of access – themselves.

Acting as one single application that integrates into the world of Web 3, Selfkey, much like Gamma, is using NFTs to make this happen. As all NFTs, due to their non-fungibility, are inherently not able to be duplicated, they are the perfect tool to create identity.

Just like in the real world everyone has individual fingerprints, Selfkey wants to be the fingerprint of the internet, with every single user having what’s known as Living Avatar NFT.

A Living Avatar NFT is a close replica of your face, surrounded by a unique pattern with additional details woven in, like nationality and which passports you hold. This comprehensive system gives all the information that you need about a person, with each individual then using this system to access Web 3 services.

As all Living Avatar NFTs are non-fungible, everyone gets one account that cannot be duplicated, creating a comprehensive identity system within Web 3.0.

Final Thoughts

In the age of Web 3, digital decentralized identities are one of the most pressing new technologies that are entering this place. As we plunge further into the waters of this new era of the internet, we’re discovering the true capabilities of this system.

Relying on NFTs, an ecosystem that is directly influenced and runs on blockchain, Web 3 companies are able to craft unique identities for the user. From there, these users are able to access all of their accounts and systems with ease, no longer needing to remember 10s of different passwords for each of their accounts.

As the world of Web 3 and decentralized identities continue to progress, we’ll likely see an explosion of popularity in this field, reflecting the cutting-edge and exciting technology that is continually being developed in this sphere.


Crypto Journalist and Editor of guest articles in CoinPedia. I am also handling Outreach & Partnerships Manager. Contact me:

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