Decentralized Identity Systems Market Size, Share, Growth, and Industry Analysis, By Type (Biometric, Non-biometric), By Application (BFSI, Government, Healthcare and Life Sciences, Telecom and IT, Retail and E-Commerce, Transport and Logistics, Media & Entertainment, Other), Regional Insights and Forecast To 2031

Updated On: 22 April 2024

decentralized identity systems market Report Overview

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The global decentralized identity systems market size was USD 477.8 million in 2022 and is expected to reach USD 9832.3 million in 2029, at CAGR of 65.5% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with decentralized identity systems market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden rise in CAGR is attributable to the market's growth and demand returning to pre-pandemic levels once the pandemic is over. 

Decentralized identity systems are a novel approach to managing digital identities in a more secure, user-centric, and privacy-preserving manner. These systems aim to give individuals more control over their personal information and reduce the reliance on centralized identity providers (such as social media logins or government-issued IDs). It is built on block chain or distributed ledger technology, enabling individuals to manage their identity without relying on traditional centralized identity providers like social media platforms or government authorities.

The decentralized identity systems market is experiencing rapid growth due to increasing concerns about data privacy and security. Individuals were seeking alternatives to traditional, centralized identity management systems, and businesses were exploring SSI as a way to enhance user trust.

COVID-19 Impact: Pandemic Boosted the Market Demand Due to Increased Interest in Digital Identity

The COVID-19 pandemic accelerated the need for digital identity solutions as many businesses and organizations transitioned to remote work and online services. This increased reliance on digital platforms highlighted the importance of secure and user-friendly identity systems. With more activities taking place online, there was an increased risk of cyberattacks and identity theft. This heightened the demand for decentralized identity solutions that can provide better security and privacy.  Some governments began to explore or accelerate the implementation of decentralized identity systems to help manage health data, vaccination records, and other pandemic-related information securely. The pandemic led to discussions about the use of digital health passports to confirm an individual's health status for travel or access to certain facilities. These systems often rely on decentralized identity technology to protect users' sensitive health information.  Many businesses had to adapt to remote onboarding processes for customers and employees. Decentralized identity solutions can play a crucial role in securely verifying and managing identity information remotely.

Latest Trends

"Wider Adoption of Self-Sovereign Identity (SSI) Methods to Fuel Market Growth"

Self-sovereign identity, where individuals have full control over their digital identities and personal data, was gaining traction. The SSI model enables users to manage their credentials and share them selectively, enhancing security and privacy. Interoperability between various decentralized identity solutions was being addressed. Standards and protocols like DID (Decentralized Identifiers) and Verifiable Credentials were being developed to ensure that different systems can work together seamlessly. Concerns about data breaches and privacy issues were driving interest in decentralized identity solutions. Users and organizations were looking for more secure and private ways to manage digital identities and personal data.  Some governments were exploring the use of decentralized identity systems for secure and efficient citizen services, such as digital IDs and voting systems. These initiatives may have continued to evolve. Many decentralized identity solutions were built on block chain or DLT platforms, which provide the security and immutability required for managing identity data. The adoption and development of block chain technology have had an impact on this market.

decentralized identity systems market Segmentation

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• By Type Analysis

According to type, the market can be segmented into biometric, non-biometric.

• By Application Analysis

Based on application, the market can be divided into BFSI, government, healthcare and life sciences, telecom and IT, Retail and E-Commerce, transport and logistics, media & entertainment, other.

Driving Factors

"Privacy and Security Concerns to Drive Market Growth"

The increasing awareness and concern about data privacy and security have driven the decentralized identity systems market growth. Users want more control over their personal information and are looking for solutions that minimize the risk of data breaches and identity theft. High-profile data breaches and identity theft incidents have led to a loss of trust in centralized identity systems. Decentralized identity solutions offer a more secure alternative, as they reduce the reliance on a single point of failure. Regulations like the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) have placed strict requirements on how organizations handle personal data. Decentralized identity solutions can help organizations comply with these regulations by giving individuals more control over their data.

"Rising Demand for User-Centric Identity to Accelerate Market Demand"

Users increasingly demand control over their digital identities and data. Decentralized identity systems allow individuals to own and manage their digital identities, granting or revoking access to their personal information as needed. The development of interoperable standards, such as the W3C's DID (Decentralized Identifier) and Verifiable Credentials, has facilitated the adoption of decentralized identity solutions. These standards enable different systems to work together seamlessly. These identity systems are not limited to identity verification. They can be used in various applications, including secure access to online services, authentication in healthcare and financial sectors, supply chain management, and more. This versatility has expanded their market potential.

Restraining Factor

"Lack of Standardization to Restrict Market Growth "

The decentralized identity space lacks standardization. Various organizations and platforms are working on their own solutions, which can lead to interoperability issues. The absence of standardized protocols and formats can hinder the widespread adoption of decentralized identity systems. These identity systems can be complex for the average user to understand and manage. User adoption may be slow due to the technical expertise required to set up and use these systems effectively.

decentralized identity systems market Regional Insights

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"North America Anticipated to Drive Market Expansion owing to Presence of Key Players "

North America holds leading position in decentralized identity systems market share. The region, particularly the USA and Canada, has been a hub for technological innovation, including block chain and decentralized identity solutions. Many start-ups and established companies in this region were actively working on decentralized identity solutions. Additionally, North America has significant research and development efforts in this field.

Key Industry Players

"Adoption Innovative Strategies by Key Players Influencing Market Growth"

Prominent market players are making collaborative efforts by partnering with other companies to stay ahead of the competition. Many companies are also investing in new product launches to expand their product portfolio.

The top key players in the market are Microsoft, Avast, Ping Identity, 1Kosmos, IBM, Accenture, R3. The strategies to develop new technologies, capital investment in R&D, improve product quality, acquisitions, mergers, and compete for the market competition help them to perpetuate their position and value in the market. Besides, collaboration with other companies & extensive possession over market shares by the key players stimulates market demand.

List of Market Players Profiled

• Microsoft (U.S.)
• Avast (Czech Republic)
• Ping Identity (U.S.)
• 1Kosmos (U.S.)
• IBM (U.S.)
• Accenture (Ireland)
• R3 (U.S.)

Report Coverage

This report examines an understanding of the decentralized identity systems market’s size, share, and growth rate, segmentation by type, application, key players, and previous and current market scenarios. The report also collects the market’s precise data and forecasts by market experts. Also, it describes the study of this industry’s financial performance, investments, growth, innovation marks, and new product launches by the top companies and offers deep insights into the current market structure, competitive analysis based on key players, key driving forces, and restraints that affect the demand for growth, opportunities, and risks.

Furthermore, the post-COVID-19 pandemic’s effects on international market restrictions and a deep understanding of how the industry will recover, and strategies are also stated in the report. The competitive landscape has also been examined in detail to provide clarification of the competitive landscape.

This report also discloses the research based on methodologies that define price trend analysis of target companies, collection of data, statistics, target competitors, import-export, information, and previous years’ records based on market sales. Moreover, all the significant factors which influence the market such as small or medium business industry, macro-economic indicators, value chain analysis, and demand-side dynamics, with all the major business players have been explained in detail. This analysis is subject to modification if the key players and feasible analysis of market dynamics change.