The SSI Market could be worth over $550 billion annually

By Fraser Edwards CEO, cheqd

Over the past few years, key thinkers have begun to identify the extent to which Self-Sovereign Identity (SSI) will precipitate a paradigm shift, revolutionising how individuals and companies exchange data across industries as diverse as finance, gaming and travel.[1] One indeed only need look to the pandemic, where SSI proved foundational in the implementation of the International Air Transport Association (IATA) Travel Pass as well as the UK’s National Health Service (NHS) staff passports, to sense how SSI could prove integral to unlocking a whole array of innovative solutions.

Yet despite this, there remains a crucial lack of clarity surrounding SSI’s total addressable market (TAM) value. SSI is a technology that will impact our economy and society on many levels, and this necessitates a concomitant effort to unpack the value of SSI and its applications in a much more sustained and tangible way than has hitherto been done. This is precisely why cheqd decided to conduct a meta-analysis, in order to establish a credible baseline figure that can then be iterated upon by the community.

Through our meta-analysis, we calculated the potential of the SSI market to be worth around $550 billion annually—a figure that reflects the full value of people and company’s data and their usages, based upon areas of opportunity identified in our report including finance, compliance (KYC), gaming, NFTs, the Metaverse, Official ID, and E-Commerce amongst others.

At the heart of all these use cases lies a common denominator: the need for digital trust and control. The current identity model is controlled by third-party providers who generate most of the value from this data. This centralised structure brings with it a host of security threats, providing the potential for hackers to target companies’ data silos on mass scales or trick individuals into giving away their passwords. SSI technology aims to redress these structural market issues by inverting data ownership, allowing individuals to create a single profile that they control and share with companies as and when they choose.

Areas of opportunity for SSI

As identified in the report, this disruptive technology could be used everywhere from banking to metaverse, travel to healthcare. One example of this includes Know Your Customer (KYC) practices, where SSI could create a perfect identity layer or a bridge between traditional data heavy interactions and a pseudonymous DeFi approach. While current KYC is single-use, SSI could make this information re-usable, thereby solving the current need for a more efficient and privacy preserving solution. The same holds true for e-Commerce payments. Here SSI could be used to increase transactional security as well as reduce onboarding and payment frictions.

Other areas of opportunity we identified include gaming, where SSI could be used to revolutionise player experience. While integrity of personal data is critical across all sectors, it is a particularly pertinent issue for gamers. This is because they have invested significant game-time and money purchasing assets and creating characters that are supposed to provide a virtual embodiment of their identity. Through SSI, gamers would be able to securely and efficiently transport their character, assets and experience between different games. This would enhance the gaming experience by allowing users to create a sustained and meaningful representation of themselves in the virtual world. Such a technology would prove particularly resonant in popular games such as Battlegrounds (PUBG), which are built around the importance of in-game identity.

On the electronic identity front, the European Commission, Canadian, United States and Australian governments have all led, or intend to lead, initiatives to actively promote the use of SSI to streamline their e-government services or national data processes.

Overall, our report seeks to quantify and reinforce our argument for the significant impact and scale of SSI. We calculated a number on SSI’s TAM using the information available so far, and while this figure is not meant to be taken as an exact number, but rather a credible estimate intended to flesh out our argument for the importance of SSI, it demonstrates that the potential annual SSI market value is staggering. The full scale of SSI impact is yet to be fully understood and determined, precisely because the technology is so readily adaptable to so many diverse and as yet unknown use cases. If there is one key takeaway from our whitepaper, then, it is this: above and beyond any figure we can provide, it is apparent that the applications of SSI will not only be limitless, but the security and control that it affords will also prove priceless.

[1] Preukschat, A. Drummond, R, Self-Sovereign Identity: Decentralized Digital Identity and Verifiable Credentials (Manning: 2021)