Digital Identity: End User Experience

Part 8 of SpruceID’s Digital Identity in America Series

This article is part of SpruceID’s series on the future of digital identity in America. Start with the first installment here.

When people talk about digital identity, they often focus on the issuers - the DMVs, vital records offices, and municipal agencies that create credentials - or the verifiers, like banks and government agencies, that check them. But in between sits the most important actor of all: the holder.

Holders are the individuals who carry credentials in their wallets and present them when needed. Without them, digital identity is just infrastructure with no purpose. They are not passive participants. They are the ones whose trust, adoption, and daily choices will determine whether digital identity succeeds or fails in America.

Designing for holders means confronting a hard truth: people are skeptical. They worry about surveillance, data breaches, and usability nightmares. At the same time, they expect consumer-grade experiences. If digital identity wallets aren’t as seamless as Apple Pay or Google Maps, adoption will stall. For all the cryptography and compliance frameworks under the hood, the success of digital identity ultimately rests on the experience of the holder.

Why Holders Matter

The entire promise of decentralized identity rests on one principle: people, not platforms, should control their own identity data. This vision collapses if people don’t actually feel in control.

Every stakeholder depends on holders. Issuers need them to accept and store credentials. Verifiers need them to present proofs on demand. Policymakers need them to trust that rights and protections are being respected. If holders reject the system, the rest of the ecosystem crumbles.

This is why the “middle actor” is in fact the central one. Identity systems succeed or fail based on whether they deliver value to holders in their daily lives.

What People Want from Digital Identity

Research and experience show that people want three things from identity systems: convenience, security, and privacy. These are not luxuries; they are the baseline.

Convenience: People expect identity to be easy. A digital credential should be as simple to use as tapping your phone to pay. If proving your age or your residency takes more than a few clicks, users will default to old methods.
Security: People are tired of data breaches. They know their Social Security numbers, addresses, and account information are floating around the dark web. They want identity systems that are harder to hack, and they want to feel safe using them.
Privacy: Oversharing is the core problem of today’s identity model. A bartender doesn’t need your address, yet your driver’s license shows it. An online retailer doesn’t need your birthdate, yet it collects it anyway. Holders want identity systems that minimize exposure—sharing just what’s necessary, nothing more.

If digital identity wallets deliver on these three expectations, holders will adopt them. If they don’t, the entire system risks rejection.

The Problem of Identity Fatigue

People are already suffering from “identity fatigue.” The average American manages over 100 online accounts, each with its own login, password, and recovery process. Two-factor authentication, while more secure, adds more steps. Meanwhile, fraud continues to rise despite all the friction.

This fatigue leads to shortcuts - password reuse, insecure recovery methods, reliance on federated logins like “Sign in with Google.” These shortcuts may be convenient, but they erode privacy and security.

A practical digital identity wallet can relieve this fatigue. Instead of dozens of accounts and logins, people would carry a small set of credentials that prove who they are across contexts. But if wallets themselves add friction or confusion, they risk becoming just another layer of fatigue.

A Day in the Life of a Holder

To see what digital identity means in practice, let’s follow a person through a day.

In the morning, they log into their health portal. Instead of juggling usernames and passwords, they present a credential from their wallet confirming their patient ID. The hospital accepts it instantly.

At lunch, they stop at a liquor store. Instead of handing over a plastic license that reveals their address, they share a proof that says only: “Over 21.” The cashier sees a green checkmark, nothing more.

That afternoon, they apply for a new bank account. Instead of scanning utility bills and uploading selfies, they share a DMV-issued credential. The bank checks authenticity against the DMV’s key, verifies revocation status, and completes onboarding in minutes.

Later, they log into a government portal to renew their passport. The system accepts their verifiable credential from the DMV, eliminating the need for them to re-enter biographical data.

Finally, they attend an evening concert. Their ticket is tied to a credential in their wallet, ensuring it can’t be counterfeited or scalped.

In each case, the holder presents just what’s needed, nothing more. The experience is faster, safer, and less invasive than the alternatives. That’s the promise of digital identity - when designed for the holder.

Privacy as a User Expectation

Privacy is often discussed as a policy principle, but for holders it is an expectation. They may not use the phrase “zero-knowledge proof,” but they know they don’t want to overshare.

Selective disclosure is the feature that makes this possible. Holders should be able to prove they are over 21 without revealing their exact birthdate, or prove they live in a certain state without exposing their full address. Zero-knowledge proofs take it further, allowing holders to prove they are not on a sanctions list or do meet an eligibility requirement without exposing anything else.

For holders, the language is simple: “I show only what I need to.” If wallets don’t deliver this privacy by default, people will assume the system is just another surveillance tool.

Trust and Transparency

Holders will not adopt digital identity unless they trust it. Trust comes from transparency. People want to know:

Who issued this credential?
Who can see it when I use it?
What data am I sharing?
Can I revoke it if I need to?
Can I choose not to use it at all?

Utah’s SB 260 is a good example of policy supporting holder trust. It enshrines voluntariness, bans tracking, and ensures physical IDs remain valid. The EU’s eIDAS 2.0 regulation does the same, mandating free wallets for citizens, selective disclosure, and a ban on central databases.

Technology must align with these protections. Wallets should show holders exactly what they’re sharing and with whom. They should allow easy revocation. They should make it clear that people, not platforms, are in control.

The Risk of Exclusion

One of the biggest risks in digital identity is exclusion. Holders who lack access to smartphones, reliable internet, or government-issued IDs risk being left behind. Millions of Americans fall into these categories.

For digital identity to succeed, it must be inclusive. That means supporting low-tech alternatives, ensuring physical IDs remain valid, and expanding the set of issuers beyond DMVs to include vital records, veterans’ agencies, and municipal IDs. It also means ensuring wallets are accessible for people with disabilities and designed for multilingual populations.

If holders don’t see themselves in the system, they won’t use it. Worse, they’ll be excluded from services that go digital-only. Designing for inclusivity is not optional; it is essential.

What Holders Need from Wallets

From the holder’s perspective, the wallet is the face of digital identity. It must embody the values of usability, security, privacy, and decentralization.

Usability: Wallets should feel like familiar apps: clean, intuitive, and frictionless. Issuing and presenting credentials should be no harder than downloading a boarding pass.
Security: Wallets must use strong cryptography, but they should hide that complexity from users. People shouldn’t need to understand keys or signatures. They should just trust that the wallet is safe.
Privacy: Wallets must default to minimal disclosure and make it obvious what data is being shared. Transparency is critical.
Decentralization: Wallets must avoid lock-in. Holders should be able to move credentials between wallets, just as they can move SIM cards between phones. If wallets become walled gardens, trust collapses.

Wallet certification programs, like those proposed through FIDO and Kantara, can give holders assurance that their wallet meets these standards. But the ultimate test will be the experience itself.

The Opportunity for Holders

For holders, digital identity offers a new kind of empowerment. No longer do they have to overshare, entrust sensitive documents to strangers, or juggle dozens of logins. Instead, they can carry their identity with them, on their terms, and use it across contexts.

This empowerment is not abstract. It means a mother can update her last name after marriage without mailing in stacks of documents. A veteran can prove their service instantly for benefits. A refugee can present credentials safely across borders. A teenager can prove their age online without exposing personal information.

Digital identity, when designed for holders, is not just more efficient. It is more human. Designing for holders means making digital identity usable, secure, private, and inclusive. It means respecting choice and protecting against surveillance. It means recognizing that identity is not just a technical artifact, but a deeply personal part of who people are.

The lesson is clear: if digital identity doesn’t work for holders, it doesn’t work at all.

This article is part of SpruceID’s series on the future of digital identity in America. Read more in the series:

SpruceID Digital Identity in America Series

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About SpruceID: SpruceID builds digital trust infrastructure for government. We help states and cities modernize identity, security, and service delivery — from digital wallets and SSO to fraud prevention and workflow optimization. Our standards-based technology and public-sector expertise ensure every project advances a more secure, interoperable, and citizen-centric digital future.