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TechEngage » Security & Privacy

Digital Identity Systems: Government Internet ID & Privacy Risks Explained

Avatar for Ali Raza Ali Raza Published: Apr 9, 2026 · 12:00 PM ET Updated: Nov 5, 2026 · 5:04 AM ET

ExplainerExplainer based on official documentation and named sources. Not a product comparison.
Digital Identity Systems: Government Internet ID & Privacy Risks Explained
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About this article
This TechEngage edition was published after an earlier version of the article. Reader comments below may date from that earlier publication.

Correction, November 5, 2026: EU Digital Identity Wallet use is voluntary. An earlier version incorrectly described use as mandatory. NIST’s authentication guidelines also predate NSTIC, rather than originating with that initiative.

A digital identity system can help you prove who you are, sign in to an account or present a credential. Those functions overlap, but they are not interchangeable. A passkey can secure an account without proving your legal name; a government credential can prove an identity without being the password for every website.

Privacy depends on what the particular system collects, which parties see a transaction and what alternatives remain available. The European Digital Identity Wallet is an important example: EU countries must offer wallets, but people are not required to use them.

What the US internet-identity strategy actually proposed

The Obama administration released the National Strategy for Trusted Identities in Cyberspace on April 15, 2011. Planning had been discussed earlier that year. In its January 2011 explanation, NIST explicitly said the strategy did not call for a single government-required internet ID. It envisaged multiple voluntary public and private identity providers and interoperable credentials, rather than one central identity database.

That proposal should be assessed on its actual design and implementation. It is inaccurate to describe it as a requirement to attach a government-issued identity to every online action. Equally, voluntary participation on paper is only useful if people retain workable ways to access the services they need.

Identity proofing, authentication and federated login

NIST’s Digital Identity Guidelines distinguish identity proofing, authentication and federation. Identity proofing establishes confidence in a claimed identity. Authentication checks that someone controls an account’s authenticator. Federation allows one party to convey an authentication result or identity information to another service.

A “Continue with” login is a familiar example of federation. It can reduce the number of passwords you manage, but dependence on the identity provider makes its account security and recovery process important. Check what information the receiving service requests and how you can regain access if the provider account is lost.

The guidelines did not originate with NSTIC: the first SP 800-63 was published in June 2004. The current SP 800-63-4 is a separate technical publication, not a national internet-ID enrollment scheme.

EU Digital Identity Wallet: available does not mean compulsory

The European Commission’s wallet overview says each member state will provide at least one European Digital Identity Wallet, with availability from 2026. It also explicitly says use is optional. The wallet is intended for citizens, residents and businesses that want to use it, including to present documents and access public or private services.

The Commission describes user control over which information is shared. That is different from promising that a wallet reveals nothing to any party. For a particular transaction, look at the requested attributes, the recipient and any retained record. “Can this prove the required fact with less data?” is a more useful question than “Is every digital identity private?”

Where the privacy risks arise

  • Excessive disclosure: a service might request a full identity document when a narrower credential would be enough.
  • Linkability: repeated identifiers or transaction records may let parties connect activity across services. The risk depends on the system’s design.
  • Account recovery: weak recovery can undermine strong sign-in, while inaccessible recovery can lock out the legitimate user.
  • Dependence and exclusion: a person without a supported phone, connectivity or accepted documents needs a usable alternative.
  • Retention and access: understand which organization stores identity evidence, how long it keeps it and how to challenge an error.

These are questions to investigate, rather than proof that every implementation creates a central record of all internet activity. NIST’s guidelines specifically allow anonymous or pseudonymous accounts when confidence in a person’s real-world identity is not needed.

Passkeys improve sign-in without proving your legal identity

The FIDO Alliance describes passkeys as cryptographic credentials for phishing-resistant sign-in. A user typically authorizes their use with a device unlock method, such as a PIN or biometric check. Passkeys can be bound to one device or synced between a user’s devices through a passkey provider.

That distinction matters: it is incorrect to say every passkey’s private key can never leave its original device. FIDO also explains that biometric data used for the local check stays on the device. Strong sign-in does not eliminate risks from a compromised device, a stolen session or a weak account-recovery process.

Decentralized identifiers are not automatically blockchain identities

The W3C’s Decentralized Identifiers specification describes identifiers whose creation and use can be controlled without dependence on a central authority for the identifier’s continued existence. It does not require one underlying technology: methods can use distributed ledgers, file systems or other infrastructure.

An identifier is also different from an issuer’s credential about someone. Keeping control of an identifier does not guarantee that a university, government or employer will continue to recognize a credential. Ask how the particular system handles issuance, status checks, lost keys and recovery before assuming “decentralized” means impossible to revoke or monitor.

A practical check before sharing identity information

Start from the service’s official website rather than an unsolicited message asking for ID. Confirm what you are proving, why each requested field is necessary and whether a less revealing option is available. Review the provider’s recovery and correction procedures before depending on a new credential for an essential service.

For a country-specific identity program, use that program’s current official guidance. Enrollment rules, biometric handling and legal rights differ between jurisdictions. Conclusions about an EU wallet, a US sign-in service or a private login provider cannot safely be transferred to every other system.

Frequently asked questions

Was NSTIC a mandatory national internet ID?

No. NIST described multiple voluntary identity providers and interoperable credentials, rather than a single government-required internet ID or central identity database.

Do EU residents have to use a digital identity wallet?

The European Commission says wallet use is optional. The obligation to make wallets available is different from a requirement that people use them.

Do all government identity systems have the same privacy rules?

No. Check the particular program’s enrollment requirements, data sharing, retention, correction rights and alternatives. One program’s rules do not establish another’s.

Do passkeys prove your legal name?

Not by themselves. They authenticate control of an account. Identity proofing is a separate process; passkeys can be device-bound or synced.

Do decentralized identifiers require a blockchain?

No. The W3C specification supports different underlying technologies. The identifier and any credential issued about its holder are separate concepts.

Does a biometric check make an identity system infallible?

No single check establishes the security of the whole system. Consider enrollment, device security, recovery, human review and ways to correct a mistaken decision.

Related reading

  • CAPTCHA Evolution: The History of How Websites Prove You're Human
  • Internet Surveillance Laws: From SOPA & CISPA to Modern Privacy Battles
  • How to Protect Your Digital Identity and Social Media Accounts
  • Google Censorship: What They Filter and What They Don't
Something incorrect? Report an error in this article. Include a source if you have one; your name and email are optional.

Filed Under: Security & Privacy Tagged With: Biometrics, digital identity, Explainer, FIDO2, GDPR, Passkeys, Privacy

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Avatar for Ali Raza

Ali Raza

Business & Cybersecurity Analyst

Ali Raza is a Business and Cybersecurity Analyst at TechEngage covering enterprise technology, business and fintech, cybersecurity, and software tools. His reporting connects business strategy with the technology behind it to help readers make informed decisions.

Reader Interactions

Join the Discussion
  1. Avatar for Wayne StidolphWayne Stidolph says

    January 10, 2011

    Good, thoughtful points about the very real risks … and yet, the benefits of a secure online identity are real, too, so we need to do something to make that secure identity feasible for all. We already know that most people simply will *not* maintain their security in the current environment, and maintaining (or raising) fear levels will shut more people out of the online world. (And, as a side issue, ponder which people will self-select out and how that discriminatory result affects our cultures both on and off line.)

    It feels to me like a common government policing role, and so it comes with the normal government over-reach/misuse risks, and should be constrained by the normal legal protections. (IMO we in the USA need much stronger laws in re privacy protections, but that’s not your subject here, is it?)

    Reply
    • Avatar for BrianBrian says

      January 10, 2011

      It is simply a bad idea.

      This initiative, if it somehow comes to fruition, is by its own nature a danger. Claiming that this will somehow increase security for those that already do not care is foolish (read the false sense of security part). All this does is off load blame for wrong doing away from end-users and service providers.

      Don”t even think for a minute that the government wouldn’t become culpable for security and access issues in the eyes of the non-tech savvy.

      Reply
      • Avatar for BrianBrian says

        January 10, 2011

        Oh and corporations have a hard enough time with data leaks already. Plus, the government is atrocious in its record of IT projects. For reference, research the Bush administration trying to upgrade its internal e-mail service at the White House or perhaps the current issues regarding the near collapse of the information systems responsible for Social Security.

        Reply
  2. Avatar for LekeLeke says

    January 10, 2011

    …and they plan to let people use this type of security on Windows?

    Reply
  3. Avatar for Scott RoseScott Rose says

    January 10, 2011

    JD,

    I have a few points of contention to your article. In my mind, the single point of access is not an issue for 90% of internet consumers. I think it’s naive to think that the majority of consumers are using different passwords for all of their financial accounts (bank, PayPal, sites with stored CC#, etc) today. Those people already suffer from a single point of access. As for the tech savvy crowd? So long as the government does not _require_ the use of their internet id system, then it won’t change the way we do things.

    Further, while having a single interface to financial data increases the risk of breach, it also increases the accountability of transactions. This, if done correctly, could streamline enforcement actions against hackers/scammers/etc.

    Also, I’d have to imagine that in order for an institution (eCommerce site, bank, etc) to connect to the requisite national id API, there would be some vetting process, and a set of standards to which the institution would be held (e.g. levels of encryption, allowable stored user data, security and auditing). As it stands today, fear of lawsuits and bad press is the only thing keeping eCommerce companies “honest”.

    Finally, the “big brother” factor already exists. The IRS can demand full disclosure of our financial transactions at any time they please. The credit reporting agencies have access to every one of our account numbers and account histories. Our information is already in the hands of juggernauts like PayPal and Bank of America. I don’t think that “big brother” knowing our username and password provides a significantly higher level of intrusion.

    I’d like to close by saying again that my remarks are in regard to the use of the internet by neophytes, and not the tech savvy sort. Those are the people that really do need help securing their identity on the internet. It comes down to this question: Who do you trust more to protect them? A hodge-podge of blindly entrusted corporations, or the US Government. (And no, I’m not happy with either answer).

    Reply
  4. Avatar for brooklyn_wrybrooklyn_wry says

    January 10, 2011

    >When it comes to the Internet, the US government usually doesn’t have a clue.
    According to who? With all due respect, for all its incompetencies and bureaucracy, the US Government and its various agencies and contracted efforts have repeatedly lead the world in science in engineering, to include having created the internet to begin with.

    You make some legitimate points, but demand for responsible commerce and behavior dictates the need for some authentication mechanisms. This has been predicted as inevitable by computer scientists for decades.

    There are plenty of quite legitimate concerns; you’ve cited many. Ultimately I don’t think an ID system need be entirely pervasive – information remains free and anonymous to the extent that certain publishers (anyone, really) choose to publish it that way. In cases where it makes sense to verify an identity (which is already the case to conduct business/commerce), it makes *more* sense from a consumer’s perspective to have one standard that is deemed “as reliable as possible” even if that’s a fallacy (even yet, one unreliable standard is better than a dozen unreliable standards).

    Reply
    • Avatar for Mike TMike T says

      January 10, 2011

      According to who? With all due respect, for all its incompetencies and bureaucracy, the US Government and its various agencies and contracted efforts have repeatedly lead the world in science in engineering, to include having created the internet to begin with.

      The federal government didn’t actually do most of the work to create the Internet. Most of it was done by university and corporate lab researchers working under federal grants. The Department of Defense has always outsourced most of that work to skilled talent outside the federal government because that’s cheaper than running the equivalent of a UC Berkeley, MIT or Bell Labs in house.

      More practically, though, the problem here is not engineering, it’s bureaucracy. The federal government does not have the institutional flexibility to operate a system like this. If you want a comparison, look at the Google identity system and Facebook Connect. The federal government doesn’t have the kind of payroll, personnel and property flexibility needed to hire the right minds, let them operate in the environment they need and “just get the job done” with regard to procurement.

      If you look at most large federal information systems worked on in the last decade or so, they’re terrible failures compared to the private sector for those reasons.

      Reply
  5. Avatar for JackieJackie says

    January 10, 2011

    I knew he was a commie, freaking Obama. But it doesn’t come as a shock as I suspected Obama of being the anti-christ

    Reply
    • Avatar for Just Say No To National IDJust Say No To National ID says

      January 11, 2011

      Sounds like something the anti-christ or his puppet would institute. All kidding aside it sounds worse than what Orwell imagined

      Reply
  6. Avatar for JoshJosh says

    January 10, 2011

    Great article… and you nailed it.

    This is all about controlling data and information. The U.S Government is realizing that it needs to control all this information, to be able to use it against the people.

    Reply
  7. Avatar for AveradAverad says

    January 10, 2011

    We already have Ip addresses that can be tracked via your Internet Provider, you post something online and your IP address gets logged and can be back tracked to your computer. Even if your smart enough to use something as Tor people can find your original IP.

    Seriously articles like this are to install fear in stupid computer users.

    Reply
  8. Avatar for KevinKevin says

    January 10, 2011

    CNN is basically the Defense Department’s mouthpeice. Notice whenever there is a conflict (like the Georgia/Russia skirmish on 8.8.08) CNN always has the first word.

    Reply
  9. Avatar for Cayce PollardCayce Pollard says

    January 10, 2011

    From your comments, you clearly haven’t read the National Strategy for Trusted Identities in Cyberspace. The US government isn’t proposing a single ID for cyberspace, nor anything like it.

    Reply
  10. Avatar for JoshJosh says

    January 10, 2011

    I shouldnt be so shocked that there are comments in here defending this idea. You morons bent over and willingly showed the government where they could stick their throbbing rod on illegal wire-tapping, torture, illegal wars, airport x-rays and now you are going to do it again with this crap. Dont even respond to this comment because I wont be reading it. I am absolutely disgusted with people like you since you make it so easy for them to screw us over. There is not a single thread of legislation that needs to be added to the internet, its fine how it is and if you are stupid enough to get scammed stay away from it. Keep the government away from the internet as much as possible you stupid apes, its the last form of free communication we have and you are busting down the doors trying to give it away!

    Reply
  11. Avatar for TheoTheo says

    January 10, 2011

    Bottom line, they know what they’re doing.

    Is it a bad idea for us? YES. Great idea for them.

    If this guy gets elected for a 2nd term then I will have officially lost all faith in the US populous’ ability to think freely.

    Reply
  12. Avatar for N8N8 says

    January 10, 2011

    Please google the following:

    Define:DARPA

    I stopped reading because it sounded like partisan drivel. AKA first paragraph.

    Reply
  13. Avatar for theendtheend says

    January 10, 2011

    sign of the apocalypse

    Reply
    • Avatar for FishingPilotFishingPilot says

      April 14, 2011

      I was thinking the same thing – one monetary system

      Reply
  14. Avatar for DavidDavid says

    January 10, 2011

    Hahahaha – you get what you pay for. As long as america keeps putting up with stuff like this it will keep happening. Someday, people will wakeup and find they have the government they always wanted – and can’t stand it.

    The bottom line is that the government can’t do anything better than the free market. They always take longer, refuse outside input, and spend a fortune building their broken products.

    Reply
  15. Avatar for JarikJarik says

    January 10, 2011

    CNN is liberal?

    I guess if you call constant stupid shots of you tube, news on something trivial as a animal showing up in a community and annoying one liners is liberal then ok. that being said, they dont realy take sides as i watch them to try and get a balanced view.

    I have my issues with CNN, taking a partisan approach is not one of them.

    Reply
  16. Avatar for TerexTerex says

    January 10, 2011

    “The Republicans should (hopefully) block any legislation from happening. This is where it is important to remain vigilant in protecting civil rights even in times where it seems that they allow for bad things to happen”

    Then the Patriot Act should have been blocked.

    Reply
  17. Avatar for TranisTranis says

    January 10, 2011

    Why did none of you Republicans bitch when G.W. Bush tried to implement the National ID system, for everyone, in the real world? The Democrats have blocked the “national ID” since they got in.

    This implementation is meant to be for secure online transactions(commerce department), but will fail, just like Microsofts dot Net ID system, or any other online company that has tried a “one ID” system.

    Reply
  18. Avatar for JarikJarik says

    January 11, 2011

    The biggest and most telling of these is Social Security ID. Social Security numbers were created for only one reason – to keep track of your contributions and how much you’re owed by Social Security.

    Now, you’re required to give it to go to a bank, go to school, get a job, get a credit card, etc. etc.

    What will happen is that businesses will say “this is the best way to protect ourselves” and if the majority of people adopt it, they will just refuse to do business with anyone that doesn’t use it. It becomes a slippery slope thing. It is unquestionably better for businesses, as it starts to put others on the hook for their security issues, so they will be clamoring to force all their customers to use it. The more people that do, the easier it will be to justify the decision. The more businesses that do it, the easier it will be for other businesses to do the same. Eventually, no major online retailer will do business without it.

    It’s insanely important for people to resist this and to stay away from it. There are countless other reasons to not use it, but resisting it now is even more important as it’s become obvious that most people don’t think of the long-term ramifications of this decision and just say “Hey it makes it easier, and they say it’s safer, so why not?” The masses will gobble it up, and the people who are outliers will be stuck.

    Reply
    • Avatar for wheninthecoursewheninthecourse says

      January 13, 2011

      im not a high tech computer person, but the more i read out here the more convinced I am that this NSTIC is like a one on one tracking device. how do we resist it?

      Reply
  19. Avatar for KevinKevin says

    January 11, 2011

    Weren’t the body scanners at the airports opt-in (e.g. you have the right to refuse?). I could easily see this going the same way…

    “Sure you don’t have to have a national ID, but if you want to get on the internet you have to go down to the DMV, show 6 points of identification, obtain your temporary, & disposable passphrase, and then activate the 4 hour e-commerce access in the next 15 minutes…. Or you could opt-in.”

    Reply
  20. Avatar for TranisTranis says

    January 11, 2011

    “A fine is a criminal sanction. A civil sanction, by contrast, is called a penalty. The term fine is sometimes used to describe a penalty, but the terms fine and penalty should be kept separate because the consequences are different: nonpayment of a criminal fine can result in incarceration, whereas nonpayment of a civil penalty cannot.”

    I think you mean Civil Penalty , and not a Fine.

    Reply
  21. Avatar for CypherCypher says

    January 11, 2011

    It’ll be hacked in 30 seconds and then the guberment will just spy on average citizens. FACT

    Reply
  22. Avatar for GregGreg says

    January 11, 2011

    It’s true. The Government already has the capacity to access any and all information about personal computer users. All this would do (and that’s not even for sure) is that accessing that data would become easier.

    Reply
  23. Avatar for Rob JRob J says

    January 12, 2011

    At the end of the day this is really more for the government to track my illegal activity’s and downloads.

    Reply
  24. Avatar for perry security llcperry security llc says

    January 13, 2011

    You People dont have clue of what your talking about!! This is a great idea….. If the system is done properly it can resolve alot of problems. Taking into account my company owns the interlectual property for the application the presidents proposing. FYI we at perry security have the software to implement this system without failure.

    Reply
  25. Avatar for Gary SmithGary Smith says

    January 19, 2011

    People do speculate on almost everything that relates to Obama. And now here’s some speculation on the national ID! We all feel bad when government has access to all our info. Now that’s ridiculous.

    Reply
  26. Avatar for janicejanice says

    January 21, 2011

    Yes, thats what we all want to do. Poke in someone’s life. This is what we have done till now. Government is doing nothing but imitating us and giving us our own lessons.

    Reply
  27. Avatar for WarronWarron says

    January 24, 2011

    Do I really need to tell that why government does all this? It is for our benefits and to stop any sort of bad things happening all around.

    Reply
  28. Avatar for GregGreg says

    January 28, 2011

    Safety is something we need to install in our lives. Government helps us in this way by scanning everything. It is its basic right.

    Reply
  29. Avatar for princeyprincey says

    January 31, 2011

    How much more speculations and how many more news?

    Reply
  30. Avatar for JoelHJoelH says

    July 28, 2011

    The only thing that Mr. Transparency wants is our personal lives to be transparent to the Government…Exactly what he criticized the Bush administration for…Oh, remember the Patriot Act that was so evil and to be abandoned?  Well, not only did they keep it, they are going for this, Medical records, and much much more…kiss the “land of the free” farewell…that boat left on 10-1-2001.

    Reply

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