Joel Dudley discusses decentralized digital identity on the blockchain using Hyperledger Indy. Indy uses blockchains to create a decentralized identity system where anyone can perform transactions to create immutable digital IDs. It allows anyone to issue, verify, and revoke credentials while keeping credentials themselves off-chain. As an example, Joel describes how Indy could be used for a user to prove they have a valid driver's license to rent a car without revealing the entire license to the rental company.