Reusable digital identity solutions are picking up steam, with verifiable credentials becoming a central technology to tackle today’s challenges and more. Dock Labs has hands on experience working with the Decentralized Identity Foundation (DIF). They’re working on other solutions, including Truvera, to address these challenges. The user-held digital identity market The future potential market for user held digital identity is massive. It covers about 2.6 billion people worldwide and over 143 million business entities that could serve as potential relying parties. Widespread adoption does depend on achieving a critical mass among holders, issuers, and verifiers.
Addressing the Identity Challenge
Yet there is a key hurdle to the widespread adoption of digital identity. Second, it’s really hard to make sense of the data that comes from these trusted systems of record.
"The biggest one is trying to get our information out of a trusted system of records." - Richard Esplin of Dock Labs
Esplin contends that verifiable credentials are the solution to this problem. They provide tools that let people exchange authenticated, credible information quickly and safely. Dock Labs is leading the charge in this space with its development of Truvera. Further, the company has been deeply involved with the Decentralized Identity Foundation (DIF).
The appetite for a digital identity solution is more than ripe. Problems still exist – especially due to the splintered implementation of mobile driver’s licenses (mDLs). The human rights implications of the U.S. entering the “yellow zone” for digital ID adoption This is an encouraging status, reflecting significant progress, yet it further underscores the imperative of continued development and standardization across the board.
Biometrics and User Control
Biometric authentication is the quintessential role of digital ID. Biometric authentication has become a central feature of today’s digital identity solutions. That said, valid concerns about data privacy and security require a serious discussion about how biometric data is used, collected, and stored. On-device comparisons to templates previously captured by the issuer or verifier have limited usefulness. Cloud processing, by nature, requires the storage of biometric data with a third-party entity, introducing potential privacy risks.
This approach is aligned with decentralized identity principles. It gives people the tools to manage their data directly, letting them choose what to share with whom on trusted terms.
"We favor keeping that biometric solution under the holder’s control." - Richard Esplin
As Anne Bailey points out, getting to critical mass will be crucial to making user-held, reusable digital identity a success. This is only possible with a critical mass of holders, issuers, and verifiers consistently using credentials in the ecosystem. Dock Labs estimates that the issuance of new credentials will soar, with 400 million new credentials expected to be issued per year starting in 2026. Even with this explosive growth, getting to full market penetration will still be a long process. Even assuming a linear adoption at this pace, it would still take about 6.5 years to reach their entire addressable market.
The Path to Critical Mass
Research done by KuppingerCole puts that number at an average of five identity credentials per person. Each credential is a three-year credential, and so one must renew the credential every three years. This further underscores the growing demand for streamlined and convenient credentialing management systems.
KuppingerCole estimates that the average person will manage around five identity credentials, each with a lifespan of approximately three years before requiring renewal. This highlights the ongoing need for efficient and user-friendly credential management solutions.
