What are the advantages of digital credentials in the SSI model?

The user gets more control over their credentials and their use, data is stored decentrally, there is less dependence on identity providers during use, and the approach can improve security, privacy and transparency.

• User control: the holder decides when, to whom and how much to present.
• Decentralised storage: there is no central database of everyone's identity data that could be breached or misused. This design fits well with eIDAS (the EU regulation on electronic identification) and the GDPR (the EU data protection regulation), which both favour data minimisation.
• Less dependence on identity providers at use: once a credential is issued, using it needs no provider in the loop. The provider can't see usage, and its outage doesn't block you.
• Potentially better security, privacy and transparency: no honeypot of credentials, minimal disclosure, open and verifiable mechanisms.

"Potentially" is deliberate: these benefits depend on a good implementation, for example on whether unlinkability is actually achieved. The flip side is on the next card.

Go deeper:

• eIDAS (Wikipedia) — the EU regulation, including the 2024 revision that introduced the European digital identity wallet.