Articles

Gartner predicts 500 million smartphone users will be making verifiable claims using a digital identity wallet built on distributed ledger technology by 2026

2 Mins read
distributed ledger technology

By 2026, at least 500 million smartphone users will be regularly making verifiable claims using a digital identity wallet built on distributed ledger technology, according to Gartner, Inc.

Decentralized identity (DCI) based on distributed ledger technology is used for user verification, identifying, and tying a physical person to an identity wallet, and for user authentication and authorization, authenticating that user and authorizing them to access resources and data.

Traditional centralized approaches to managing identity data often fall short in user experience, security, and privacy. DCI offers a transformative solution by eliminating central data stores and enhancing user experience through simple smartphone applications. It ensures security via the integrity of robust identity verification mechanisms and preserves privacy through consent management and the use of privacy-preserving protocols such as zero-knowledge proofs (ZKPs), which provide pseudonymity. This approach addresses key issues like identity verification, fraud, and account takeovers, making it a superior alternative to conventional methods.

The use cases for DCI are diverse, spanning government-citizen interactions, business-customer relationships, and employer-workforce engagements. For instance, the government of Zug, Switzerland, uses uPort technology to offer DCI for citizen services, such as signing up for city amenities. Similarly, Condatis and Sitekit have implemented Microsoft Entra Verified ID to create a digital staff passport, which is used by hospitals in the U.K. to facilitate the movement of medical staff. While the benefits of DCI technology are substantial, its adoption is currently hindered by immature and inconsistent standards and protocols, limiting its use to niche applications in the short term.

Challenges of DCI Adoption and the Role of Governments

One of the biggest challenges to the widespread adoption of DCI is ensuring the authenticity of Verifiable Credentials (VCs) by verifying that the issuer is authoritative. For example, a university must be recognized as the legitimate source of an educational credential. Governments can help overcome this challenge by acting as authoritative sources for many identity attributes, such as proof of citizenship, which supports access to government benefits.

Government projects have shown faster results when agencies serve as trusted sources for specific identity data. A significant development is the EU’s ratification of eIDAS 2.0, which sets legal requirements for digital identity in EU member states. This regulation provides a framework for DCI vendors, who have been preparing for its implementation. Additionally, governments can leverage their large-scale infrastructure to support numerous use cases, further accelerating DCI adoption.

Navigating Uncertainty in the DCI Market

Given the current uncertainty around validating authoritative issuers of VCs, companies should focus on use cases where governments are the issuers. Governments worldwide are actively exploring and developing DCI use cases for citizens, providing a solid starting point. Additionally, they should stay updated on developments in organizational credentials, such as the vLEI standard from the Global Legal Entity Identifier Foundation (GLEIF), which could help identify authoritative issuers of VCs.

When selecting use cases, business leaders should prioritize those with high opportunity costs—situations where current processes are time-consuming, costly, and resource-intensive, but could be streamlined with DCI. This strategic approach can help companies navigate the complexities of the evolving DCI market effectively.

Author Bio: By Akif Khan, VP Analyst at Gartner

Read next: Gartner predicts worldwide shipments of AI PCs and GenAI smartphones to total 295 million units in 2024

Leave a Reply

Your email address will not be published. Required fields are marked *

1 + 1 =