Decentralized Digital Identity Using Blockchain in the Web4 Era

As more of our lives shift online, managing digital identity in a safe and user-centric way has become a pressing challenge. This paper explores how blockchain technology can offer a transparent, secure, and decentralized approach to identity management in the emerging Web4 ecosystem. It proposes a framework using Decentralized Identifiers (DIDs), Verifiable Credentials (VCs), Modular Identity Capsules (MICs), and Smart Contracts to enable self-sovereign identity. The study reviews existing systems like Microsoft ION, Sovrin, and Veramo, discusses practical applications in sectors like healthcare, education, and governance, and outlines future research directions for privacy-preserving digital identity systems.