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The forces changing user-controlled digital identity in 2022

The forces changing user-controlled digital identity in 2022

The end of the year is a time when many put on an amateur futurist hat to make predictions about the coming year. As a professional futurist, I take a hard line against predictions. By design the future has not happened and since no one controls the future, predictions are aspirations, not certainty. However, we can identify the forces acting on the present and hypothesize what could happen as a result of their influence.


I have selected eight forces of change at work in 2022. For each of these variables, we can hypothesize what would happen if they stay the same as they did in 2021, or if they increase or decrease.

  • Funding: What kind of funding is available for SSI projects? Where is the funding coming from? Governments; VC; grants; other startup investments; bootstrapping?
  • Regulation: Are we seeing an interest in regulation related to SSI tech or that might influence the adoption of SSI tech?
  • Technology maturity: How mature is the technology and in which way is the technology maturing?
  • Standardization: What is the state of SSI technology standards and organizations’ usage and compliance with them?
  • Technology productization: What kind of products are available and what is their maturity? This can be full solutions, proof of concepts and specific products like wallets, data storage, credentials or enterprise solutions? We can also look at the industries that have more SSI solutions in the market.
  • Private Sector Adoption: What level of interest does the private sector have? Where are companies on the adoption lifecycle?
  • Government Adoption: How are governments responding to SSI? Where are they on the adoption lifecycle?
  • End User Adoption: How are users responding to SSI? What is their response to technology offerings?

2021: Our Starting Point

Businesses face more online security threats than ever before. We hear about debilitating security attacks on a near daily basis, especially around RAAS (Ransomware as a service) and Business Email Compromise (BEC). Thanks to ongoing COVID variants, companies are still managing remote workforces and dealing with employee burnout, making corporate infrastructure an attractive attack surface for criminals.

Theoretically, consumers want data privacy and protections, but in the U.S. they have little power to pressure private sector companies to build these features into their technology. It seems that U.S. companies will not willingly offer these protections, and only comply with existing regulation when required.

It is still early days for broad awareness of decentralized identity/SSI outside of the identity community. While new business models are emerging, these are really just baby steps. There are some successful early adopter companies in specific markets. Governments are interested in solutions and offer funding for projects. Europe appears to be a more serious market for developing product offerings than the U.S., where incumbent tech companies are actively obstructing standardization activities.

The Future!

So, what could 2022 look like? I have selected multiple variables from above and woven them into four scenarios. For the record, these are not predictions, but I do hope you find them provocative!

Scenario 1: Corporate Resistance: Erosion of US Technology Leadership

European companies take data privacy and protection seriously and bring products to market which U.S. customers snap up. Companies in China continue to build technology in line with their values, and collect data on global users. U.S. tech companies struggle for relevance as China stays on track to be the dominating science and tech force by 2050.

The U.S. Government enacts regulation in line with Europe looking out for citizen privacy and freedom, but U.S. companies are allowed significant time to comply with the new regulations, leading to an erosion of U.S. tech product offerings. More funding for SSI is available outside the U.S., so real innovation moves outside of the U.S. market.

Scenario 2: Successful Disruption: The Secure Web is Born

Online criminal activities overload everyone, and companies finally realize they need to invest in a new system. SSI is broadly embraced by the private sector and adoption is led by democratic governments through funding and grant programs in the U.S., Canada, and EU.

Innovation is driven by organizations’ business models that are not based on data selling. New solutions to identity theft and other problems are developed, and as the technology is innovated, new business models present themselves. Funding pours into this new industry and there is a resurgence of energy to create ‘The Secure Web.’ This ushers in a new gold rush boom cycle to re-create the internet as we know it.

Scenario 3: Big Bureaucracy: Stagnation and Slow Progress

Hackers are still causing a lot of corporate pain, but it is not enough to change. U.S. corporations take a passive-aggressive approach to digital identity and data privacy standards, only complying with regulation when forced. Governments embrace SSI tech and issue technology requirements for government funded projects. This leads to a government-tech company standoff, with companies doing the bare minimum to comply. Startups enter the space, but are slow to get traction, as larger incumbents obstruct technology standards development.

Scenario 4: Tribal Entrepreneurship

SSI technology standards are released along with robust developer documentation which attracts many new developers into the community. As education spreads, intrapreneurs inside large organizations and opportunistic entrepreneurs use the standards for their own 1.0 releases. Some of these 1.0 releases are in adjacent industries focused on educational credentials, vaccine credentials or crypto-currency wallets that also hold and transfer credential data. Many of these systems are not interoperable by design, and the application of SSI grows through many industries. Wallets and credentials are interoperable in theory, but the reality is that end users must use wallets designed for the various siloed credentials. This creates a lot of choice and also headache for end users and enterprise customers. The dream of the one wallet through consolidation is never realized as the market expands and more developers build and iterate on their 1.0 products. The products that eventually rise to the top are driven by charismatic leadership and network effect rather than the best technology solutions. It takes years to consolidate.

SSI in 2022 will probably develop as some combination of the above scenarios. Understanding the forces at work in the world helps us understand the trajectory of the future, and make better decisions at work and in our lives. We do not need to predict the future to have control over it.

About the author

Heather Vescent is a digital identity industry thought leader and futurist with more than a decade of experience delivering strategic intelligence consulting to governments, corporations and entrepreneurs. Vescent’s research has been covered in the New York Times, CNN, American Banker, CNBC, Fox and the Atlantic. She is co-author of the The Secrets of Spies, The Cyber Attack Survival Manual and The Comprehensive Guide to Self Sovereign Identity.

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