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With the driving force of digitalisation and the manifold use cases, it is clear that there is a tremendous market opportunity for decentralised identity. But there are adoption challenges and decentralised identity will have to compete with centralised biometric identity. It may not be exaggerating to describe it as 'crypto identity vs fiat identity'.
DIDs and Verifiable Credentials promise the convenience of: register once and use everywhere, without sharing passwords or being tracked as you use online services.
According to recent research, the global digital identity solutions market is projected to grow from 23.3 billion U.S. dollars in 2020 to 49.5 billion U.S. dollars in 2026. The rapid market growth is driven by increasing instances of identity frauds, data breaches and new government regulations.
"Based on solution type, the Digital Identity Solutions Market has been bifurcated into two segments: biometrics and non-biometrics. These solutions play a vital role in every organization. Most organizations are moving toward digitalization and cloud-based infrastructure, which help them drive businesses forward and strengthen customer relationships. Biometric segments market will hold the largest market share in the Digital Identity Solutions Market." - published by MarketsandMarkets, Jul 2021
This massive market opportunity is focused on biometrics, generically known as identity verification, particularly facial recognition. The market leaders are folks like Idemia, Clear Secure, Jumio and iProov.
But there is a strong public backlash against facial recognition in the US and EU, where some communities have outlawed the use of facial recognition software for surveillance cameras used in public places. The UK and US don't even issue national identity cards. But countries like India and China have gone the other way, with India using retinal scans and 10 fingerprints for their Aadhar identity system. In China, the state not only has a central biometric registry with IDs for every citizen, this is combined with social scoring data to reward 'good social behaviour' and to punish non-compliance with government policies.
The smaller part of this market is decentralised identity, which the above-mentioned research reports describe as 'non-biometric'. But it is also growing fast.
A Juniper Research report published in Feb 2022, predicted a US 26b digital identity market by 2026 and stated: "The research also highlighted that verified digital identity, where identities are confirmed as genuine using verifiable credentials, as being vital for improving fraud mitigation. This represents the next evolutionary step for digital identity; moving from establishing infrastructure to utilising and verifying identity in practical applications. To facilitate this, the report predicts increasing data partnerships between vendors to provide comprehensive, data diverse identity systems."
"Verifiable Credentials represents the next evolutionary step for digital identity" - Juniper Research
For NextID, the target market is South East Asia. The company will focus on the corporate market for continuing education and document management solutions. The total addressable market is global because the company's service is cloud-based, but currently the marketing reach of the company is limited. Working with resellers will allow NextID to reach customers outside of South East Asia.