Decentralized Identity Market Report and Forecast 2024-2032

According to the report, the global decentralized identity market size attained approximately USD 548.39 million in 2023. Aided by the increasing concern over data privacy and security, the market is estimated to grow at a CAGR of 89.10% in the forecast period of 2024-2032, reaching a value of around USD 1,69,556.03 million by 2032.

Decentralized identity represents a transformative approach to identity management and verification in the digital world. Unlike traditional identity systems managed by centralized authorities such as governments or major corporations, decentralized identity systems allow individuals to own and control their personal information without relying on any central authority. This system utilises blockchain technology to create a secure, immutable, and verifiable record of an individual's identity data, which they can share selectively with others to prove their identity or qualifications.

In the realm of digital interactions, where concerns about privacy and data security are paramount, decentralized identity offers a compelling solution. It mitigates risks associated with centralized data storage, such as data breaches, unauthorised access, and privacy violations. By empowering users to control their data, decentralized identity systems enhance privacy and provide a foundation for trust in digital transactions.

The global decentralized identity market is influenced by several key trends that underscore its growing relevance and potential for widespread adoption. A primary trend is the increasing concern over data privacy and security. High-profile data breaches and the tightening of data protection regulations globally, such as the GDPR in Europe and similar laws in other regions, have driven demand for more secure and private methods of handling personal identity information. Decentralized identity systems address these concerns by offering a more secure framework where users can control who accesses their data and under what circumstances.

Another significant decentralized identity market trend is the integration of decentralized identities with various sectors that require reliable verification methods. For example, in financial services, decentralized identity can streamline the Know Your Customer (KYC) process and reduce the risk of fraud. In healthcare, it can provide a secure way to manage patients’ medical records, allowing data to be shared securely between providers while ensuring patient privacy. Education, e-commerce, and public services are other fields where decentralized identity systems are increasingly being explored to enhance service delivery and security.

Technological advancements in blockchain and related technologies are also propelling the global decentralized identity market growth. The development of more efficient and scalable blockchain platforms that can handle the high throughput required for the widespread use of decentralized identities is crucial. As these platforms evolve, they implement decentralized identity solutions more practical and appealing across various applications.

Furthermore, strategic partnerships between technology providers, government entities, and industry stakeholders are playing a crucial role in shaping the global decentralized identity market dynamics. These collaborations are essential for creating the interoperable standards needed for decentralized identity systems to function across different sectors and jurisdictions. As more organisations recognize the benefits of decentralized identity, such partnerships are likely to increase, driving further innovation and adoption.

Global initiatives and consortiums such as the Decentralized Identity Foundation (DIF) and the World Wide Web Consortium (W3C) are working to establish technical standards and governance models for decentralized identity. These efforts are critical for ensuring that decentralized identity solutions are secure, interoperable, and compliant with international regulations. This standardization is expected to accelerate global decentralized identity market expansion by reducing uncertainty and fragmentation, encouraging more organisations to invest in decentralized identity technologies.

The rise of smart cities and the Internet of Things (IoT) presents additional growth opportunities for the decentralized identity market. In smart city initiatives, decentralized identity can help manage and secure the vast amounts of data generated by connected devices, while in IoT applications, it can ensure secure communication and authentication between devices without the need for a central authority.

Despite its potential, the decentralized identity market faces challenges such as the complexity of the technology, which can hinder adoption, especially among organisations that lack the technical expertise to implement these systems. There is also the need for widespread public awareness and understanding of how decentralized identity works and its benefits.

Market Segmentation

The global decentralized identity market can be divided based on identity type, enterprise size, application, end use, and region.

Market Breakup by Identity Type

• Biometric
• Non-biometric

Market Breakup by Enterprise Size

• Large Enterprises
• Small and Medium Enterprises

Market Breakup by Application

• Individual
• Enterprises

Market Breakup by End Use

• BFSI
• Government
• Healthcare
• Media and Entertainment
• Manufacturing
• Retail and E-commerce
• IT and Telecom
• Others

Market Breakup by Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

Competitive Landscape

The report looks into the market shares, plant turnarounds, capacities, investments, and mergers and acquisitions, among other major developments, of the leading companies operating in the global decentralized identity market. Some of the major players explored in the report are as follows:

• Microsoft Corporation
• Wipro Limited
• Civic Technologies, Inc.
• Validated ID, SL
• Dragonchain
• Nuggets Ltd.
• Ping Identity Corp.
• Finema Co., Ltd.
• Datarella GmbH
• NuID, Inc.
• Others