As transactions become increasingly digital, new concerns arise surrounding identity. With traditional cash or credit based transactions, the face-to-face interaction serves an identity check. The photo on your credit card can be matched with your face. Cash goes directly in the register, false payment credentials are a manageable risk. As we become ever more reliant on the digital world, our traditional concept of identity must evolve.

Here in my office I have numerous forms of ID. Every card in my wallet serves as some form of identification. Whether a credit card number linking to a personal account, an insurance card linking me to a policy, or a driver’s license connecting me to a speeding ticket, each serves to identify me in a specific environment or context. The common denominator between these traditional forms of identification is their physical nature. This is not the reality for e-commerce and m-commerce players. The future of identity it appears is a digital one, based not on a card, driving record or bank account, but based on IP and social media profiles.

Signifyd, winner of the 2013 Merchant Risk Council award for Most Innovative Startup, combines traditional forms on digital verification such as IP Geo-Location with social networking data to assess suspicious transactions. Combing data from the likes of Facebook, LinkedIn, and Twitter, Signifyd combines social graph information with hundreds of other data sources, including public records, address look-up, bank information and even search data. The firm bridges the gap between virtual identity with real identity, using its collection of data.

The social graph represents all interactions between an individual and the world wide web. Not surprisingly, Facebook has the largest social graph in the world. Google’s Knowledge Graph and Twitter’s Interest Graph are notable and Inome advertised in the Wall Street Journal earlier this week. These aggregations of online information are a 21st century mapping expedition. What is where, who is doing what?

As our lives are increasingly split between the physical and digital worlds, being on the digital map will become as valuable as being on the physical one. The ID of the future is not a fancier card, or updated drivers license, but a hybrid identity marrying an individual in the real world with a profile in the physical one.

Happy 4th of July to those of us in the U.S.A. (it’s our Independence Day)