The decentralized identity market is expected to grow at a CAGR of 87.5% during the forecast period of 2024 to 2032, market for decentralised identity is poised for phenomenal growth, which will revolutionize how individuals and businesses manage digital identities. Enhanced security through biometrics, a rising demand for privacy and data control, and advancements in blockchain technology are propelling the decentralized identity market on a trajectory of rapid expansion. Despite interoperability challenges, the market is poised for growth in both biometrics and non-biometrics segments. Individual and business adoption, as well as geographic trends, indicate a bright future for decentralized identity solutions. The market will grow from 2024 to 2032 as a result of continued innovation and collaboration by market leaders.
The adoption of biometrics for digital identity verification is one of the primary forces driving the decentralised identity market. Biometric authentication techniques, such as fingerprint recognition, facial recognition, and retinal scanning, offer unrivaled security and precision, thereby reducing the risk of identity theft and fraud. The increasing incorporation of biometric authentication into smartphones, laptops, and other devices demonstrates its prevalence and efficacy. Decentralized identity solutions based on biometrics offer consumers a secure and convenient method of authentication.
Demand for decentralized identity solutions has been driven by a growing concern for data privacy and control. Individuals and businesses seek to regain control over their personal data and restrict access to their sensitive information by third parties. Data breaches and privacy crises with widespread publicity have increased awareness of the risks associated with centralized identity systems. Decentralized identity solutions based on blockchain technology enable users to more securely manage their data.
Blockchain technology is a key market enabler for decentralized identity. Blockchain's inherent immutability, transparency, and security make it an ideal platform for decentralized identity solutions. As blockchain technology evolves, the potential for decentralized identity also increases. SelfKey and uPort are examples of blockchain-based identity projects that have garnered significant traction and funding. These platforms enable users to establish and manage digital identities on a transparent and secure blockchain.
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The difficulty of interoperability between various decentralized identity platforms and standards is a significant market constraint for decentralized identity. The absence of a unified standard could impede widespread adoption and collaboration as the market expands. Standardized protocols and interoperability are frequent topics of conversation within the decentralized identity community. Without a common framework, it may be difficult for users to seamlessly navigate between various decentralized identity providers.
By identity type, the decentralised identity market can be segmented into Biometrics and Non-biometrics. In 2023, the Biometrics segment of the decentralized identity market held the largest revenue share. This trend is anticipated to continue, with biometrics maintaining the highest CAGR during the period between 2024 and 2032. The increasing adoption of biometric authentication in various sectors, including mobile devices, financial services, and healthcare, highlights its market dominance. Biometrics provides a highly secure and user-friendly method of confirming an individual's identity. Non-biometric authentication methods, such as traditional username-password combinations and other non-biometric methods, also contribute significantly to the decentralised identity market. However, this segment is anticipated to grow at a slower rate than biometrics. While non-biometric authentication methods are still widely used, their susceptibility to security breaches and phishing attacks has prompted a shift towards more secure authentication mechanisms, such as biometrics.
End-users can further segment the decentralised identity market into Individual and Enterprise segments. Individuals accounted for a substantial portion of the decentralised identity market's revenue in 2023. Also anticipated to have the highest CAGR from 2024 to 2032, this segment is anticipated to have the highest growth rate. Individuals are becoming increasingly aware of the significance of securely administering their digital identities, particularly in the context of online services, social media, and financial transactions. Individuals can control their digital presence with decentralized identity solutions. The Enterprises segment, which comprises businesses of all sizes and industries, contributes significantly to the revenue of the decentralised identity market. During the forecast period, enterprises are anticipated to continue employing decentralized identity solutions. Decentralized identity solutions reduce the risk of data breaches, increase consumer trust, and streamline user authentication processes for businesses. The adoption of decentralized identity technologies is motivated by these benefits.
There are notable regional trends in the decentralised identity market, with specific regions exhibiting higher growth rates and revenue percentages. North America and Europe led the decentralised identity market in terms of revenue in 2023, due to their robust regulatory frameworks and heightened awareness of data privacy. However, it is anticipated that the Asia-Pacific region will record the highest CAGR over the forecast period, due to the region's increasing digitalization and economic growth.
Microsoft, IBM, uPort (by ConsenSys), Sovrin Foundation, SelfKey, Civic, Evernym, Accenture plc, Wipro Limited, SecureKey Technologies Inc., Persistent Systems Limited, Avast Software s.r.o., R3, Validated ID, SL, Dragonchain, Nuggets,1Kosmos Inc, and others are key players in this market. The leading competitors in the decentralised identity market have adopted a variety of growth-driving and position-maintaining strategies. Partnerships, open-source development, and the expansion of blockchain ecosystems are among these strategies. To promote decentralized identity solutions, the leading companies have formed strategic alliances with organizations, governments, and technology providers. Additionally, they have contributed to open-source identity initiatives, fostering industry-wide collaboration.
