Digital identity: your wallet, your ID and the blockchain

What digital identity is

Your digital identity is the set of data that lets a service know it's you: a username and password, an email, a customer number, a fingerprint on your phone, a certificate. Every time you sign in, someone compares what you present with what they have on record.

The important question isn't what data it's made of, but who controls it. There are three models:

In Chile we live with the first two every day. The RUT, the national ID number, identifies you to the State and to companies, and the ClaveÚnica, issued by the Civil Registry, opens online procedures at many institutions with a single password. The federated model works well for legal identity, because someone has to vouch for who you are. Web3 adds the third, for whatever doesn't need an intermediary.

The four layers: key, address, name and profile

This is the heart of the matter: how your wallet, your ID and the blockchain relate. They aren't the same thing; they're layers, each resting on the one below.

• The wallet keeps your private key and signs for you. It isn't your identity: it's the keyring that protects it. We explain it in what a wallet is.
• The address is your public identifier. It's derived from your key, so only you can act on its behalf.
• The blockchain is the record of what that address holds and does: tokens, names, votes, badges. Nobody runs it alone and anyone can verify it.
• The name is a record in ENS, on Ethereum, that connects something readable —yourname.eth— to your address.

Your key proves it's you; your address says where; your name says who.

Signing in with your wallet

Many Web3 applications don't ask for an email or a password: they ask you to connect your wallet and sign a message. The standard for doing that is called Sign-In with Ethereum (EIP-4361). The site shows you a text like this one, your wallet signs it with your key and the site checks the signature:

example.com wants you to sign in with your Ethereum account:
0x4c2a…9f1b

Sign in to example.com

URI: https://example.com
Version: 1
Chain ID: 1
Nonce: 8f3kQ2xLm
Issued At: 2026-09-10T14:05:00Z

The signature proves you control that address without revealing your key. The site doesn't store a password that could leak, and you don't create a new account. Before signing, check three things:

1. The domain. The first line must say exactly the site you're on. A fake site imitating another gives itself away there.
2. That it's a message. Signing in doesn't move funds or charge gas. If you see amounts, a contract or the word approve, it isn't a sign-in.
3. That it isn't a permit. Some gasless signatures, such as permit signatures, authorize a third party to spend your tokens. If you don't understand what you're signing, don't sign it. More in crypto scams and how to avoid them.

Your .eth name: the readable layer

A 42-character address isn't an identity anyone can remember. ENS solves that with two records that complement each other:

Well-built applications show your name only if both directions match. Anyone can declare someone else's name as their primary name, but if that name doesn't point back to their address, the application ignores it. That way nobody can pass themselves off as yourname.eth.

The name also stores text records: your avatar, a description, your website, your X or Telegram accounts, addresses on other networks. You set them once and any ENS-compatible application reads them. If an application disappears, your profile stays with your name.

The same works for communities and brands. ethereumchile.eth, for example, issues subnames like yourproject.ethereumchile.eth to people building from Chile: a shared identity, verifiable on-chain. How a name works under the hood is explained in the last block of this series.

Credentials: proving something without showing everything

An identity isn't just a name: it's also the things others can vouch for about you. Your degree, your job, your attendance at an event, your membership in a community. In the digital world that's called a verifiable credential, and it works between three parties:

There are open standards for this: decentralized identifiers (DIDs) and verifiable credentials from the W3C, the consortium that sets the web's standards, which published version 2.0 in May 2025. With cryptographic techniques such as zero-knowledge proofs, you can also prove that you meet a condition —being of legal age, for example— without revealing your date of birth.

The idea is already being used at scale, and not always with a blockchain. The European Union requires every member state to offer its citizens a digital identity wallet from the end of 2026 (Regulation (EU) 2024/1183). It shares Web3's principle: credentials live on a device the person controls, not in a third party's database.

In the Ethereum ecosystem there are simpler, public versions, such as the attendance badges handed out at many events or attestations recorded on-chain. They're for reputation, not for sensitive data.

What should never go on a blockchain

A public blockchain is a record that can't be erased and that anyone can read. It's perfect for proving that something happened, and terrible for storing personal data.

• Your ID number, your ID card, your home address or your phone number. Not even their hash: a Chilean RUT has so few possible combinations that its fingerprint can be guessed by trying them all.
• Health, financial or children's data. What gets published can't be taken back.
• Whole documents. If you need to prove a document existed, recording its fingerprint is enough, and only if the document can't be guessed.

The law points the same way. In 2024 Chile passed a new personal data protection law, Law 21,719, which strengthens rights such as asking for your data to be deleted. An immutable record can't comply with that, so good designs keep personal data off-chain and use the blockchain only for what must be public. The law was due to take effect on December 1, 2026; in October, the Senate passed a bill that pushes it to October 15, 2027, which now goes to the Chamber of Deputies.

What it means for you in Chile

• Your legal identity doesn't change. The RUT and the ClaveÚnica are still how you identify yourself to the State, banks and regulated companies.
• Your identity on the internet can be yours. An address with a .eth name is a profile that doesn't depend on any platform and that you carry from one application to another.
• Your reputation can be verified. Payments received, events, contributions to projects: what you do with that address is recorded and anyone can check it, if you choose to show it.

Where to go next

Your address doesn't just identify you: it's also where your digital assets live. The next block explains which ones exist and how they differ: tokens, stablecoins and NFTs.