Decentralized Identity: Blockchain ID & Self-Sovereign Identity Solutions

The KuppingerCole Market Compass on Decentralized Identity: Blockchain ID & SSI Solutions surveys a fast-evolving, highly heterogeneous market of blockchain-based identity products aimed at self-sovereign identity (SSI), reusable KYC, and passwordless authentication. It frames SSI as complete user ownership of PII stored only on user-controlled devices and shared solely with explicit consent, emphasizing that blockchain is not required for SSI but aligns well through decentralization, tamper-evidence, and selective disclosure. The report positions blockchain as a potential “identity fabric” that can enable secure information sharing without exposing private data, responding to consumer pressure driven by breaches and data misuse, while also acknowledging a broader “disillusion” phase affecting blockchain adoption.

The segment remains nascent and complements rather than replaces traditional IAM, leaving areas like B2E IAM and parts of CIAM largely unaddressed. Four subsegments define current enterprise-relevant use cases: Universal ID, new customer onboarding, strong customer authentication (SCA), and reusable KYC. The strongest near-term growth is expected in SCA and reusable KYC due to clear security, cost, and user-experience benefits; Universal ID is portrayed as more aspirational and dependent on voluntary participation by visionary organizations.

Core capabilities span self-sovereign control, off-chain PII storage, support for KYC reuse, third-party verification, and compliance, with advanced features such as verifiable claims, zero-knowledge proofs, selective sharing, interoperability across protocols, device synchronization, biometrics, and recovery mechanisms. Vendor evaluations show varying maturity and tradeoffs: ShoCard is highlighted for broad capabilities and enterprise fit; Authenteq for innovation (including anti-trolling verified anonymity); 1Kosmos for scalability and biometrics (including DAG-based scaling); and Cambridge Blockchain for finance-focused reusable KYC. Common weaknesses across products include limited multi-device support, uneven documentation, and challenges achieving critical mass for ecosystem effects.

• The decentralized identity market segment excludes vendors that do not use blockchain as a central aspect of achieving SSI or have not released a product.
• SSI is defined here as complete ownership of PII stored only on a user’s devices and shared only with explicit consent.
• No PII data should be stored on-chain because blockchains are immutable.
• The decentralized identity market began in 2017 and grew slightly in 2018 and 2019.
• The subsegments identified are Universal ID, New Customer Onboarding, Strong Customer Authentication (SCA), and Reusable KYC.
• ShoCard stores only a hash value of credentials on-chain, with no PII included.
• Civic raised over $33 million during its 2017 ICO.
• Authenteq reports 60 seconds for initial identity verification and 3 seconds for repeated authentications.
• 1Kosmos BlockID Verify achieves level 3 assurance in accordance with NIST.SP.800-63A.
• KnowMeNow’s level 3 verification process is approximately 5 minutes.

• “Blockchain presents a previously untested opportunity for digital ID management.”
• “The current but contradictory push for both data privacy and transparency poses a challenge for traditional Identity and Access Management (IAM).”
• “We expect that only few of today’s player will survive, while others will be acquired or simply disappear from the market.”
• “This market segment is still in its nascent stages, and thus there is no dominant application for SSI and blockchain ID in enterprises.”
• “The hype unfortunately propels underdeveloped solutions to launch prematurely, which feeds the skepticism from enterprises that blockchain does not deliver on all its promises.”
• “The remaining subsegment – Universal ID – is a philosophical goal that motivates many vendors, but does not have the strong business case that the other subsegments do.”
• “Anonymity is a coveted right of the internet, but it can easily shield individuals from taking responsibility for harassment and criminal action.”
• “Scalability is a constant question regarding blockchain solutions.”
• “Decentralized identity solutions typically move storage of PII data to the user’s personal devices, stored in an identity wallet app.”
• “No PII data should ever be stored on-chain.”