What is a universal digital wallet?
To protect, verify and share important corporate data, we have launched a new project based on blockchain technology with LTO Network, a hybrid blockchain network. Through this network, users can store and manage their cryptocurrencies and other digital assets such as NFTs (non-fungible tokens), as well as their verifiable digital credentials in a new digital wallet from LTO Network and Izertis.
The main aspects of the project, implemented by LTO and Izertis are the following: first of all, this wallet works both for the app and the web, which means that it is portable. Secondly, it is a self-managed digital identity wallet that allows the management of cryptocurrencies and other assets.
Why is this project innovative?
By describing it as an innovative product that "connects digital assets in a way never experienced until now", we obtain the key. The development of a digital credit card that combines the specifications of a digital wallet and a self-managing digital identity is truly innovative and opens the door to a universal credit card.
Nowadays, the universal digital wallet has become an objective for individuals, businesses, and organisations across the Web3, seizing the potential of blockchain to transform the economy and relationships. This project is a significant step forward towards in the implementation of this solution.
In this article we explain the meaning of a universal digital wallet and the way it influences the development of blockchain systems, as well as the new economy called by the experts the token economy (tokenomics).
What is a universal digital wallet?
Not all wallets are the same. They have many different uses, and not all of them follow the principles of self-managed digital identity and decentralised data models. Sometimes a third party hosts and provides "wallets" in the cloud. These wallets are not really operating under the control of their owners.
The universal concept of wallet is based on the use of decentralised data systems, built upon blockchain technology, as well as the implementation of the concept of sovereign identity (decentralised and self-managed digital identity) or Self-Sovereign Identity (SSI).
In the article "What is self-managed digital identity and why do we need it?" we explained this idea with simple examples. Self-managed digital identity implies that the individual is the true owner of his or her digital attributes and credentials and can submit and manage them autonomously, safely and privately.
The wallet is a crucial tool to materialize self-managed digital identity. It is essential to identify and access to several services without re-registering as a user, as well as to safely share information about our identity as necessary.
The self-administered digital identity card allows us, for example, to apply for a birth certificate, submit a tax return, open a bank account, save a prescription, check into a hotel or rent a car with a digital driving licence, as required by the European eIDAS regulation. And we will do it, making sure our personal information is safely shared and remains private until we decide otherwise.
We would say that the self-managing digital wallet is like a traditional wallet that we can open and close whenever we want and where we can store documents identifying us to third parties and allowing us to reach certain services.
Is it not true that we carry in our wallets much more than the documents we use to identify ourselves when accessing certain services?
Imagine the inconvenience of carrying several wallets in both the physical and the digital world: one for our IDs and identification documents, one for money, one for credit cards, one for health insurance, one for our belongings, such as our beloved family photos or a discount coupon, received rewarding our loyalty to an establishment.
The universal wallet is an excellent option for storing, managing and transacting any kind of digital assets. It can include not only cryptocurrencies, but also credentials, other tokens, NFTs and non-fungible identifiers. This is a wallet that, like our traditional wallet, should work anywhere and with any document.
The importance of the universal digital wallet in blockchain systems and the token economy
At first glance, the comparison with a traditional wallet might lead us to think about the idea of a universal wallet from a simplistic perspective: a place to store cryptocurrencies and credentials. However, its importance is much greater, being the tool granting the access to all the functions of blockchain networks and opening up a multitude of new services created by blockchain.
In early 2022, Kim Peiter Jørgensen and Roman Beck published an interesting article entitled "Universal wallets". In this article, they call for more research effort to bring to market wallets for blockchain-based solutions, such as "digital identities, self-sufficient identity management, tokens and innovative uses of digital wallets and cryptocurrency wallets". According to these authors, new services will emerge that will have a significant social impact, transforming the way businesses operate and the role of users and customers. For example, universal wallets will allow shared ownership of a car or a work of art, and permission to buy or sell any digital asset managed by the wallet can be granted instantly through NFT. Web3 and the token economy show the way towards this scenario.
The universal wallet is an essential component of Web3. In our article Web3: Towards a decentralised internet thanks to blockchain we talk about the impact of this new internet. Web3 is a decentralised internet that is more secure and open, where the wallet is the essential tool to make this happen and promote the exchange and storage of tokens. This digital wallet should accept all types of tokens, including cryptocurrencies and other digital assets such as the NFTs mentioned above. The token economy needs universal wallets.
The benefits of travelling with an e-wallet: how would it be in an "ideal world"?
We would like to propose a customer journey of a tourist who travels on holiday with a wallet installed on his smartphone.
Firstly, it would be no longer necessary to log in to our favourite applications with a username and password to start searching for travel destinations. We will use a wallet application on our smartphone to verify our identity, which will be the tool to log in to all websites, emails, mobile apps, etc. We will no longer have profiles on all websites; instead, we access all services through the digital wallet.
In addition, loyalty points from any of our applications are stored in our wallet and added to our travel budgets as a discount without us having to use discount codes.
We can enhance the speed when the tourist picks up the rental car. The travel documents are verified and unified in a scannable QR code. The car rental company employee scans the QR code and asks the customer to use a biometric facial scanner. After the employee has compared the biometric facial scan with his or her digital reference, the green light is given.
Upon arrival at the hotel, we can use the wallet to confirm our identity without having to queue at the reception, to check in with the payment solution linked to our identity and to the hotel. During our stay, a room key in the wallet of our mobile phone (in the form of a token) is provided to access the room via the NFC reader on the room door.
All these wallet usage touch points undoubtedly enhance the customer experience.
If your company is interested in using blockchain technology to solve digital identity challenges or develop products and services where transparency, privacy, autonomy, or traceability are essential, Izertis is your trusted Web3 expert partner. We will work to meet your unique needs, bringing your digital services and products to life, tailored to what your customers and end users demand.