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Friday, February 14, 2020

How Blockchain Enables Self-Sovereign Identity Apps

Many organizations need to verify your identity before you initiate an online transaction. But there are two issues: it's easy for fraudsters to exploit the system when all that's required is an email address and password. And, when the burden of proof is higher, this can be problematic for users.

The ability to either create or impersonate identities is a challenge for many businesses, particularly those processing financial data and associated payments. According to the latest worldwide market study by Juniper Research, in 2024 over $50 billion will likely be lost due to online payment fraud.

There are multiple points of potential failure in conventional identification and verification processes, particularly for online payment details. Passwords and centralized repositories are typically the core security issue in the growing problem of identity fraud.

Blockchain and SSI Market Development

Juniper analysts believe that one of the most promising approaches to improve online verification is Self-Sovereign Identity (SSI) solutions. This verification approach uses a secure blockchain to keep a record of who has validated an identity credential.

According to Juniper, the SSI movement which uses blockchain to give users direct control of who accesses their online credentials will reach annual revenue of $1.1 billion by 2024 -- that's up from an estimated $100 million by the end of 2020.

The latest research analysis uncovered that approximately 88 percent of revenue for SSI providers will likely come from businesses paying a subscription fee to access these verified identity services.


As SSI solutions are still in their early stages, early adopter companies require a consultancy approach to aid implementation, as well as the technical solution from emerging SSI market leaders, such as Evernym, Civic and Metadium.

Meanwhile, Juniper analysts also believe that the need for the continued use of third party blockchain servers will result in the continued dominance of the subscription services business model.

Juniper Research believes other business models -- such as billing per user or per request -- will grow slowly because of the many forms of competition that SSI faces, both from digital and traditional forms of identity verification.

This will result in about 32 million end-user apps being in use by the end of 2024.

Outlook for Blockchain and SSI Use Case Growth

The latest research shows how SSI will appeal to institutions that value secure and traceable identities in the long run, thanks to the immutability of blockchain records and the absence of large data repositories. However, there will be little differentiation of the user experience.

"Self-Sovereign Identity has high potential due to its security and data privacy credentials, but our report shows that, in order for it to succeed, businesses and governments need to take the lead and rule out the use of less secure, but easier to implement, alternatives," said James Moar, lead analyst at Juniper Research.