Adoption Of Self-Sovereign Identities Is Skyrocketing

A new report from market intelligence firm SkyQuest predicts that the blockchain identity management market will grow from $2.37 billion in 2023 to a massive $293.39 billion in 2031.

The flaws in the current leading online identity solutions have left them vulnerable to the rise in sophisticated cybercrimes thanks to A.I. This is pushing organizations to switch to self-sovereign identities.

“Cybercrimes have also been on the rise due to technologies like machine learning, which can produce daily versions of viruses and malware. Sophisticated cyber threats cause harm to business entities, their property and their images, and their revenues.”

According to blockchain identity infrastructure provider cheqd, identity theft losses in the U.S. cost $712,4 billion in 2020.

In the U.K., a survey published in April by the Home Office found that 50% of businesses reported some form of cyber security breach or attack in the 12 months before the survey.

Current identity systems depend on single entities to issue and verify credentials. However, that reliance on centralized servers jeopardizes the privacy and safety of information. These systems make identities easy to forge while also giving entities unilateral control over the stored data, a privilege they can and often abuse by selling private individual information to third parties for commercial users.

Fraser Edwards, CEO of cheqd, noted, "The utility and relevance of SSI and digital identity have become increasingly apparent as data leaks and hacks have exposed the vulnerability of individuals' data, while the increased attention on the profits that social media giants generate by monetizing such data has helped to make people more aware of the value of their personal information."

Self-sovereign identities (SSI) are digital identities stored on decentralized databases. They allow users to prove their identity without relying on third-party providers to store and centrally manage the data, giving users exclusive control over their personal information while ensuring the data is tamper-proof.

SSIs are based on three key technological features: blockchain, decentralized identifiers (DIDs), and verifiable credentials (VCs).

DIDs are a globally unique string of code that makes it possible for users to prove who they are online without providing personal information, while VCs are cryptographically secure versions of paper or digital credentials.

Despite the growing interest in SSI solutions, SkyQuest reports that interoperability between protocols remains a barrier to further adoption. "There is a significant issue with compatibility and standardization between blockchain platforms and different identity systems, which is slowing the market's growth."

This problem is also noted in a similar report on the market released on April 2024 by Markets and Markets. It reads, "Standardising protocols and formats across systems is essential to facilitate interoperability, but achieving consensus on technical standards remains formidable."

Using different metrics, Markets and Markets' predictions for the growth of the SSI market are shyer than those of SkyNest, with the former expecting it to be worth $47.1 billion by 2029.

Both reports identify North America as the region with the highest SSI software adoption and the Asia Pacific as the region with the fastest-growing market.

Both also point to the inevitable growth of the blockchain identity solutions market due to its unparalleled offer of "crucial security enhancements and personal data control to mitigate cyber risks and safeguard digital identities."