A digital identity: 

• is a collection of digital credentials that have been verified, including identity credentials, such as an ID card, passport or driving licence, and eligibility credentials, such as education certificates, covid tests or covid vaccines records
• should use a recognised standard to verify evidence of an identity presented by a user in an online verification cycle
• might derive information from users' credentials, such as the user being ‘Over 18’ or ‘Covid Safe’, that the users can share securely. 

See the below short video for an animated explanation of Digital ID. 

This diagram expands on the the features you should expect to see in a Smart Digital ID:

OIX's Guide to Getting Reafy for Digital ID futher explores what a Digital ID is, why it can be trusted, how you can benefit from it and implementation options you might want to consider.