Digital jewelry is fashion jewelry embedded with computer components like displays, microphones, and batteries. Examples include bracelets with small screens and rings with LED lights. The Java Ring by Dallas Semiconductor has memory, processing power, and a blue dot receptor to communicate with other devices. Digital jewelry could replace items like key chains and ID cards. Issues include small displays, potential health risks, waterproofing, and high costs. The technology aims to make computers wearable while staying fashionable.