# Why Decentralized Identity Solutions Will Take Over the World

The adoption of decentralized identity solutions is expected to drive significant growth in the global market, which was valued at USD 379.66 million in 2021. According to a report published by The Federal Trade Commission (FTC) in February 2022, the number of identity fraud incidents increased by approximately 45% globally in 2020. In response to this trend, businesses and individuals are increasingly turning to decentralized identity as a secure solution to protect against identity theft. As a result, the market is expected to experience a compound annual growth rate (CAGR) of 88.2% from 2022 to 2030. The adoption of decentralized identity technologies is driven by the need to innovate and improve security in the face of rising incidences of identity fraud.

**What is decentralized identity?**

Decentralized identity (DI) is a system that allows individuals and organizations to own and control their own digital identity, rather than relying on a centralized authority to manage and verify their identity. In a decentralized identity system, identity data is stored in a decentralized database, such as a blockchain, and is secured using cryptographic techniques. This means that individuals and organizations can prove their identity without relying on a central authority to verify it, giving them more control over their personal information and reducing the risk of identity theft. But how ?

To create your own wallet individually and instutitionally. Digital identity wallets are typically created using decentralized identity (DI) technologies, such as blockchain, which allow individuals and organizations to own and control their own identity data.

Once they have a digital identity wallet, individuals and organizations can use it to prove their identity and access services online. For example, they might use their digital identity wallet to sign in to websites or applications, verify their identity when making online transactions, or access government services.

**Who is building Decentralized identity solutions?**

Big tech to startups are building decentralized identity solutions, including the potential for increased security, control, convenience, and market demand. As the digital world becomes increasingly interconnected and reliant on online identity verification, decentralized identity systems offer the potential to create more secure and privacy-respecting ways of verifying and authenticating identity. Here is some big tech and web3 start-ups companies building blockchain-based decentralised identity solutions:

**Microsoft:** Microsoft has developed a decentralized identity platform called the [Identity Overlay Network (ION)](https://techcommunity.microsoft.com/t5/identity-standards-blog/ion-we-have-liftoff/ba-p/1441555), which uses the Bitcoin blockchain to store and secure identity data. Microsoft's ION platform is designed to enable self-sovereign identity, allowing individuals and organizations to own and control their own digital identity.

**Evernym:** Evernym is a company that specializes in decentralized identity solutions and has developed a platform called [Sovrin ](https://www.evernym.com/government/)that allows individuals and organizations to create and manage their own digital identity credentials. Sovrin is designed to enable [self-sovereign identity](https://en.wikipedia.org/wiki/Self-sovereign_identity) and is used by a variety of organizations, including government agencies and financial institutions.

**uPort:** [uPort](https://www.uport.me) is a decentralized identity platform developed by ConsenSys, a blockchain technology company. uPort allows individuals and organizations to create and manage their own digital identity credentials using the Ethereum blockchain. uPort is designed to enable self-sovereign identity and is used by a variety of organizations, including government agencies and financial institutions.

**Civic:** [Civic](https://www.civic.com) is a decentralized identity platform that allows individuals to control their personal information and use it to securely verify their identity online. Civic is designed to enable self-sovereign identity and is used by a variety of organizations, including government agencies and financial institutions.

The importance of security in handling sensitive user information cannot be overemphasized. With the implementation of user privacy regulations like GDPR and an increased focus on corporate IT responsibility, companies face new risks if they do not properly protect this type of data. Ignoring these risks can lead to costly fines and the need for expensive and risky projects to address the balance between data security and business needs. It is crucial for companies to prioritize the security of sensitive user information in order to mitigate potential risks and ensure the responsible handling of customer data.

**Which governments are exploring Decentralised Identity?**

Decentralized identity systems are important for governments because they can improve security, privacy, efficiency, and inclusivity in identity verification processes. They use blockchain technology to resist tampering and fraud, give individuals more control over their personal identifying information, streamline processes, and make it easier for individuals without access to traditional forms of identification to prove their identity. Here are some governments pioneering decentralized identity for their citizens:

**Estonia:** Estonia has a well-established digital identity system that uses decentralized technologies such as blockchain to verify and authenticate identity. Estonian citizens and residents can use their digital identity to access a wide range of online services, including healthcare, banking, and government services.([E-Estonia](https://e-estonia.com/the-making-of-a-giant-estonia-and-its-digital-identity-infrastructure/))

**India:** The government of India has launched a decentralized identity platform called the [India Stack,](https://hindiastack.org) which allows individuals to create and manage their own digital identity credentials using the Aadhaar system. The [India Stack ](https://indiastack.org)is used to verify identity for a wide range of purposes, including access to government services, banking, and healthcare.

**Canada**: The government of Canada is exploring the use of decentralized identity systems to improve the security and privacy of online services. In 2019, the government launched a pilot project to test the use of decentralized identity technologies for accessing government services online.

**United States:** The U.S. government agencies ( NIST, DHS, GSA,NSF) is also exploring the use of decentralized identity systems. In 2020, the NIST has published guidelines for the use of decentralized identity systems in the federal government. NIST is also working on a project called "[Identity Management and Privacy in the Digital Age](https://pages.nist.gov/800-63-3/sp800-63-3.html)," which aims to develop technical solutions and standards for decentralized identity systems.

**The European Union:** The EU has been actively exploring the use of decentralized identity systems as part of its digital single market strategy. The EU has also funded research projects( ID4D, DID-Euro, ID2020, eIDAS) focused on the development and implementation of decentralized identity systems.

**Why we need decentralised identity now and then?**

* Decentralized identity refers to a system for managing and verifying user identity in a decentralized manner, without relying on centralized authorities or third-party services. It uses blockchain technology to create trust between parties and provide cryptographic guarantees for the validity of identity-related information.

* Decentralized identity makes identity data portable, allowing users to store and share it in their mobile wallet with any party of their choice.

* It can work well with zero-knowledge technologies, which allow individuals to prove certain actions or ownership without revealing the specifics.
* Decentralized identity also enables anti-Sybil mechanisms, which can identify when one person is pretending to be multiple people in order to game or spam a system.

**Discover & Use decentralized identity**

Mostly, decentralized identity systems are built on public blockchains like Ethereum. These systems allow individuals to control their identity-related information. There are many ambitious projects using [Ethereum as a foundation for decentralized identity](https://ethereum.org/en/decentralized-identity/) solutions:

[Ethereum Name Service (ENS)](https://ens.domains) - A decentralized naming system for on-chain, machine-readable identifiers, like, Ethereum wallet addresses, content hashes, and metadata.

[SpruceID](https://www.spruceid.com) - A decentralized identity project which allows users to control digital identity with Ethereum accounts and ENS profiles instead of relying on third-party services.

[Proof of Humanity](https://www.proofofhumanity.id) - Proof of Humanity (or PoH) is a social identity verification system built on Ethereum.

[BrightID](https://www.brightid.org) - A decentralized, open-source social identity network seeking to reform identity verification through the creation and analysis of a social graph.

[Proof-of-personhood Passport( Gitcoin Passsport)](https://passport.gitcoin.co) - A decentralized digital identity aggregator.

**Conclusion**

As I continue to explore and utilize decentralized ID solutions, my experience with them has been consistently positive. One particularly noteworthy example is the ability to [sign in with Eth](https://login.xyz), which offers a glimpse into the potential of the web3 future. Based on my experience, I highly recommend that others discover and try out these solutions for themselves. Not only will it give them a firsthand understanding of the technology, but it will also prepare them for the adoption of a more secure and decentralized digital world. In my opinion, decentralized ID solutions are a crucial step towards building a more trustworthy and sustainable online ecosystem.