Decentralized Identity Market Size, By Identity Type (Biometrics, Non-Biometrics), By Enterprise Size (Large Enterprise, Small and Medium-sized Enterprises), By Industry Vertical & Forecast, 2024 - 2032

Decentralized Identity Market Size, By Identity Type (Biometrics, Non-Biometrics), By Enterprise Size (Large Enterprise, Small and Medium-sized Enterprises), By Industry Vertical & Forecast, 2024 - 2032

Decentralized Identity Market Size

Decentralized Identity Market was valued at USD 1.04 billion in 2023 and is expected to grow at a CAGR of over 70% from 2024 to 2032, propelled by the growing ubiquity of digital transformation programs in diverse sectors.

Identity management solutions need to be more effective and safer as more companies and organizations shift their operations online. Conventional techniques for verifying identity sometimes rely on centralized databases, which may be susceptible to security flaws and inefficiencies. By giving users authority over their identity data using blockchain technology and other decentralized frameworks, decentralized identity solutions provide a more secure and user-centric approach.

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Another important factor fueling the decentralized identity market expansion is the rise in identity theft and fraud cases. Fraud and identity theft pose serious risks to individuals and businesses alike, potentially resulting in financial losses, damage to reputation, and a loss of trust in digital systems. Due to their centralized database architecture, traditional identity management systems are especially susceptible to hacking and data breaches. Decentralized identification solutions, on the other hand, lower the possibility of a single point of failure by dispersing identity verification procedures throughout a network. This distributed strategy protects sensitive data and lowers the frequency of identity-related crimes by making it harder for hostile actors to compromise the system.
 

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Providing a smooth and easy-to-use User Experience (UX) is a major challenge in the decentralized identification business. Decentralized identification solutions can be intimidating for non-technical people as they frequently need users to handle complicated cryptographic keys and navigate strange interfaces. This intricacy may cause users to become frustrated and reluctant to embrace these new systems, especially in the case of populations that are used to more conventional identity management techniques. The complexity is increased by the need to guarantee a unified & intuitive user experience across various platforms and devices. Overcoming these user experience obstacles is essential to the broader acceptance of decentralized identification solutions. After all, even the most inventive and safest technologies can fall short if the public cannot easily access and utilize them.

Decentralized Identity Market Trends

In the decentralized identity market, the use of Self-sovereign Identity (SSI) frameworks is one of the main rising trends. SSI empowers individuals to possess, manage, and distribute their identification data independently of centralized middlemen. The growing worries about data security and privacy are driving this trend. Users can improve privacy and lower the risks of data breaches by storing their identification credentials on their devices and selectively disclosing information as needed. Blockchain technology is used by SSI frameworks to guarantee the verifiability and immutability of identity data. The market for decentralized identities is expected to grow substantially as the adoption of Self-Sovereign Identity (SSI) frameworks increases and regulatory environments increasingly prioritize data protection.

Another significant trend propelling the expansion of the decentralized identity market is the combination of blockchain technology and identity management systems. Blockchain offers a tamper-proof, transparent, and safe ledger for storing and authenticating identification data. Identity systems are strengthened by this integration, which increases their security and reliability against fraud and cyberattacks. Since blockchain is decentralized, it adheres to the decentralized identity principles, guaranteeing that no single party has authority over user data. In industries such as finance, healthcare, and supply chain management, where trustworthy and secure identity verification is essential, this trend is especially pertinent. The planned expansion of blockchain technology's application in decentralized identity solutions is expected to drive future market growth as the technology matures further.

The decentralized identity industry is being shaped by an increasing emphasis on creating and implementing interoperability standards. Decentralized identity solutions must be able to function fluidly across many platforms & ecosystems to be guaranteed interoperability. Users and businesses want identity systems that are interoperable with a wide range of apps and services, making it crucial for widespread adoption. Verifiable Credentials (VCs) and Decentralized Identifiers (DIDs) are two examples of the standards that industry consortia and standardization organizations, such the World Wide Web Consortium (W3C) and the Decentralized Identity Foundation (DIF), are actively striving to create & promote.

Decentralized Identity Market Analysis

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Based on identity type, the market is divided into biometrics & non-biometrics. The non-biometrics methods segment is expected to register a CAGR of 70% during 2024 to 2032.
 

• In the decentralized identity market, identity verification and management techniques that do not depend on biometric information—such as fingerprints, face recognition, or iris scans—are categorized as non-biometrics. Technologies including digital certificates, cryptographic keys, and Decentralized Identifiers (DIDs) are covered in this section.
   
• Organizations and individuals that are worried about the privacy and security concerns of using and storing biometric data find the non-biometrics approach appealing. Without requiring sensitive biometric data, non-biometric decentralized identity solutions provide a high degree of security and privacy by using blockchain and cryptography techniques to build verifiable & impenetrable identities.
   
• As it reduces the possibility of biometric data breaches and misuse, this strategy also complies with the growing legislative requirements for data privacy and user consent. As the awareness of these privacy issues grows, and as regulations become more stringent, the non-biometrics segment is expected to see significant adoption, particularly in industries such as finance, healthcare, and digital services, where data security and user privacy are paramount.

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Based on enterprise size, the market is divided into large enterprises & small and medium-sized enterprises. In 2032, the large enterprise segment dominated the global market with a revenue of over USD 65 billion.

• One major factor propelling the decentralized identity market expansion is the large enterprise segment. With so many workers, clients, and partners to handle, large firms in industries such as finance, healthcare, manufacturing, and technology face complicated identity management issues.
   
• Enterprises that encounter challenges with scalability, security, and compliance in traditional identity management systems generally look for more resilient options. By removing potential sources of failure and offering an impenetrable means of identity verification, decentralized identity systems improve security. This is especially important for big businesses that deal with confidential & private data.
   
• Furthermore, by enabling self-sovereign identity models where individuals have more control over their personal information, decentralized identity systems can improve user experience, expedite procedures, and lower costs related to identity management.

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North America dominated the global decentralized identity market in 2023, accounting for a share of over 35%. Technological innovations, legislative support, and growing need for secure identity solutions are driving considerable growth in North America's decentralized identity market. With significant investments made in decentralized identification systems by leading IT firms such as Microsoft, IBM, and Oracle, the U.S. is leading the way in this region. These businesses are creating cutting-edge solutions that improve security and give users more control over their personal data by utilizing blockchain technology. The adoption of decentralized identification systems is facilitated by regulatory frameworks such as the California Consumer Privacy Act (CCPA) and continuing talks surrounding federal data privacy laws. With programs such as the Pan-Canadian Trust Framework, which aims to create standardized digital identity systems, Canada is also becoming a major player.

The U.S. decentralized identity industry is expanding quickly owing to the nation's strong emphasis on data security and privacy as well as its thriving technology environment. Leading U.S. corporations, such as Microsoft and IBM, are leading the way in creating and implementing decentralized identification solutions. The adoption of these technologies is further supported by the legal environment, which is underlined by statutes such as the California Consumer Privacy Act (CCPA) and current debates surrounding a federal data privacy framework. A dynamic market environment is further facilitated by the U.S.'s flourishing startup culture, which encourages innovations in decentralized and blockchain technologies. Numerous sectors are implementing digital transformation programs, and these efforts, together with the rise in cyberattacks and data breaches, highlight the need for more secure & user-centric identity management systems, propelling the growth of the decentralized identity market in the country.

The market for decentralized identities is expanding in Japan as the nation embraces digital transformation and works to strengthen cybersecurity protocols. To encourage innovations, the Japanese government has taken the initiative to promote blockchain technology and has set up a welcoming regulatory framework. Security-focused digital identification solutions are essential, as demonstrated by initiatives such as the Society 5.0 vision, which attempts to build an ultra-intelligent society. To increase security and streamline operations, Japanese corporations—particularly those in the manufacturing and financial services sectors—are investigating decentralized identification. Furthermore, public-private partnerships are encouraging the creation of standardized frameworks for decentralized identification, guaranteeing trustworthiness and interoperability. Considerable growth is anticipated in the usage of decentralized identification systems as Japan continues to update its digital infrastructure.

South Korea's superior technological infrastructure and robust government support for blockchain initiatives are propelling the country's rise to prominence in the decentralized identification industry. Decentralized identification systems are among the many initiatives and legislative frameworks that the South Korean government has introduced to encourage the use of blockchain technology. The Ministry of Science and ICT has been actively promoting an atmosphere conducive to blockchain technology. To improve security and privacy in their goods and services, South Korean tech giants, such as Samsung and LG, are investing in decentralized identification solutions. New decentralized identification applications are also being developed and innovated owing in part to the thriving startup scene in the nation. South Korea, with a tech-savvy populace and a high rate of digital adoption, is ideally situated to become a leader in the decentralized identity market.

China has made major investments in blockchain technology and exerted strong political influence in the decentralized identification sector. Through several laws and programs, the Chinese government is aggressively encouraging the development of blockchain technology, having recognized it as a strategic priority. Decentralized identification solutions are being investigated by state-backed programs to improve the security and effectiveness of digital transactions and public services. With the goal of incorporating these technologies into their vast digital ecosystems, Chinese IT behemoths, such as Tencent and Alibaba, are also making significant investments in blockchain and decentralized identity technologies. However, there are difficulties and challenges for the adoption of decentralized identity solutions due to China's legal framework, which includes strict data management and cybersecurity rules. China is still at the forefront of blockchain technology innovation, and its market is expected to expand, with a focus on government-backed and enterprise-level applications.

Decentralized Identity Market Companies

Microsoft and Accenture held a significant share of over 10% in the decentralized identity market. As it made early, wise investments in blockchain technology and digital identification solutions, Microsoft now controls a sizable portion of the decentralized identity industry. Essential elements of its decentralized identification approach are the identification Overlay Network (ION) and Azure Active Directory (Azure AD), both of which were created by the corporation on the Bitcoin blockchain. Identity and access management is a common usage for Azure AD among businesses, and including decentralized identity solutions into this platform allows current users to migrate seamlessly. Microsoft is well-positioned in the industry owing to its powerful cloud infrastructure, large community of commercial clients, and solid security and dependability record. Microsoft also actively cooperates with industry standards groups, such as the World Wide Web Consortium (W3C) and the Decentralized Identity Foundation (DIF), aiding to shape the future of decentralized identity standards and ensuring its solutions are interoperable and widely adopted.

Accenture has established a noteworthy market position in the decentralized identity space by virtue of its all-encompassing strategy for digital transformation and its proficiency in executing inventive technological solutions in diverse sectors. To create scalable and secure decentralized identification systems, the company has teamed up with ID2020, a global alliance dedicated to resolving digital identity issues. Accenture's significant experience in consulting and implementing technology solutions for large organizations and governments allows it to incorporate decentralized identity solutions into complicated organizational structures successfully. Furthermore, Accenture is able to provide cutting-edge decentralized identity solutions that specifically address client demands owing to its research and development efforts and strategic collaborations with important technology vendors.

Decentralized Identity Market Share

Major players operating in the decentralized identity industry are

• Microsoft
• Accenture
• Ping Identity
• Civic Technologies, Inc.
• SecureKey Technologies Inc.
• Evernym Inc.
• Ontology

Decentralized Identity Industry News

• In January 2023, Quadrata, a Web3 identification solution aimed to improve reputation and compliance in public blockchains, partnered with nine well-known DeFi protocols including CR Square, Frigg.Eco, Chelo Finance, Chee Finance, Archblock, TrueFi, BSOS, Cred Protocol, and SPACE. Users of these protocols were able to access strong identity verification services via Quadrata's passport network, adding an essential degree of safety and security to their activities. This partnership reaffirmed Quadrata's and partnered protocols' dedication to putting user safety first and building a reliable ecosystem in the decentralized finance arena.
   
• In March 2022, Microsoft revealed its new identity and access management solution portfolio, Entra. The portfolio included two new product categories, Cloud Infrastructure Entitlement Management (CIEM) and Decentralized Identity, in addition to well-known solutions such as Azure AD. The Entra product line was designed to protect users' access to any application or resource by enabling security teams to find and manage rights in multi-cloud environments, enabling them to fully protect digital identities.

This decentralized identity market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD billion) from 2021 to 2032, for the following segments

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Market, By Identity Type

• Biometrics
• Non-biometrics

Market, By Enterprise Size

• Large Enterprises
• Small And Medium-sized Enterprises

Market, By Industry Vertical

• BFSI
• Retail & E-commerce
• It & Telecommunication
• Government & Public Sector
• Healthcare
• Real Estate
• Media & Entertainment
• Others

The above information is provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA