A legal identity is a government-recognized identifier (e.g., passport, national ID) used for official purposes like voting or taxation. A digital identity, however, is an online representation of an individual or entity, often tied to credentials stored digitally (e.g., social media logins, VCs). While legal identities are centralized and regulated, digital identities can be decentralized, self-sovereign, and privacy-preserving, enabling users to control their data while complying with legal requirements.
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Data retention policies for issuers typically comply with regulations like GDPR or CCPA, requiring minimal storage of personally identifiable information (PII). Issuers may retain only essential data for verification purposes (e.g., hashed credentials) and delete raw data after use. Policies often include time-bound retention periods, audit trails, and secure deletion protocols to balance compliance with user privacy.
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Issuers follow strict data minimization, retaining only cryptographic proofs (e.g., hashes) of issued credentials. Personal data is deleted post-verification, with metadata stored temporarily for compliance. GDPR-aligned policies enforce "right to erasure," allowing users to request full data deletion. Zero-knowledge architectures ensure issuers never hold plaintext data, while time-bound retention (e.g., 30–90 days) applies to audit logs unless legally required otherwise.
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