Research firm says over half-a-billion people will be using verifiable credentials by 2026 and the decentralized identity market will likely be worth over $3 billion by 2031.
By Tim Spring
Research firm Gartner says the market for decentralized identity is rapidly evolving and that decentralization will fundamentally change how we manage identity, privacy, and security.
As conventional identity access management continues to struggle with identity authentication, data breaches, and privacy issues, decentralized identity, says Gartner, is now a viable market solution.
And with the European Union forging ahead with digital identity (eIDAS 2.0) and specifications for a digital identity wallet (EUDI), hundreds of millions of people will soon be able to use verifiable credentials to seamlessly access government services from simple digital wallet applications on their mobile devices.
These insights and more come from Gartner’s 2024 Market Guide for Decentralized Identity, which lists Indicio as a representative vendor. Indico is the first company specializing in decentralized identity technology to have a complete solution — Indicio Proven® — available in both AWS and Google Cloud Marketplace, and we have customers around the world deploying solutions. Indicio is also the first company to create certified training in all aspects of decentralized identity technology with Indicio Academy.
But to underscore just how rapidly the technology is evolving, the Market Guide omits several emerging sector use cases and technical developments driving adoption and innovation.
Digital Travel Credentials (DTC) based on International Civil Aviation Organization (ICAO) standards for digital passports are now being used by a government — Aruba — and multiple airlines (this is a key area for Indicio and our partner SITA; in collaboration, we successfully launched the world’s first DTC).
With a DTC, a traveler is able to create a “government-grade” digital identity from their passport and can be preauthorized for border crossing before they leave home (thus enabling the actual border to be crossed seamlessly, in a few seconds).
Given the power of a DTC as a digital identity, it can be used for much more than border crossing. As Phocuswire’s Mitra Sorrells recently noted, the result of this technology is that “Travel… is on the verge of a fundamental, radical shift.”
Verifiable credentials are also being used to verify more than a person’s identity. New Zealand’s Digital Farm Wallet project is using verifiable credentials to authenticate devices and sustainability claims in agriculture, so that farmers can easily and repeatedly prove compliance requirements in order to access funding and meet other needs.
Given the number of connected devices and their uses, verifiable identity means verifiable data. It’s not just about identity management; it’s about being able to create seamless operations and processes based on trusted data.
One particularly powerful aspect of decentralized identity that many businesses and governments are not yet aware of is the ability to add a secure communications channel between decentralized identities. Decentralized Identifier Communication, or DIDComm, enables trusted secure communication, such that a bank is able to seamlessly authenticate a customer and a customer their bank before any data is shared.
This feature provides a simple, cost-effective way not only to implement zero-trust security but to manage the threat of generative AI identity fraud, aka “deepfake phishing.” A bank can use the trusted channel to confirm that the call center caller is, in fact, their customer.
DIDComm has significant business value beyond security in that it enables rich, consent-based communication between businesses and customers, which when combined with verifiable credentials allows for an entirely new level of trust. At the recent KuppingerCole European Identity and Cloud Conference, DIDComm was the emergent protocol, notably through ID Union’s project to make it work with the European Union’s favored protocols, OID4VC.
The key takeaway from the Gartner report) is that this technology is gaining traction a lot faster than you (and even Gartner) think. So what should you do if you are interested in learning more?
If you’re a Gartner subscriber, the report is here.
If you want to get your head around the technology, we recommend our Beginner’s Guide to Decentralized Identity.
And if you really want something to chew on, book a free workshop with us, where we’ll take a use case of your choice and show you how we can either save you money, make you money, or mitigate risk by using verifiable credentials. Contact us here!
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