How do digital certificates help confirm an entity's identity?

Digital certificates serve a crucial role in confirming an entity's identity by binding a public key to that entity's identity. This binding process is facilitated through a trusted third party known as a Certificate Authority (CA). When an entity requests a digital certificate, the CA verifies their identity and issues a certificate that includes the entity's public key along with information about the entity, such as its name and address.

This linkage provides assurance to anyone who relies on the certificate that the public key indeed belongs to the stated entity. When users or systems encounter this digital certificate, they can trust that they are communicating with the correct individual or organization, as the public key contained within the certificate can be used for secure communications or transactions. This method is foundational to various security protocols, ensuring data integrity, confidentiality, and authentication in digital environments.

The other choices do not directly contribute to confirming an entity's identity in the same manner. For instance, while encrypting user passwords is important for security, it does not validate identity. Similarly, storing personal data securely is critical for privacy but does not inherently confirm who the entity is. Verifying a physical address of an entity may be part of identity verification but is not accomplished through the mechanism of digital certificates.