Ethereum has strong potential as a technical backbone for a digital identity ecosystem. Its decentralized, blockchain-based architecture ensures security, transparency, and immutability, ideal for managing digital identities. Smart contracts enable automated, trustless identity verification and access control, reducing reliance on centralized authorities. Ethereum's support for standards like ERC-725 and ERC-735 allows for self-sovereign identity, empowering users to control their data. Interoperability with other blockchains and off-chain systems further enhances its scalability. However, challenges like high gas fees and network congestion could hinder adoption unless addressed by upgrades like sharding or layer-2 solutions. With its robust developer community and ongoing improvements, Ethereum is well-positioned to support a secure, user-centric digital identity framework.