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A Glance at the Market Structure of "Digital Identity": Who Will We Be in the Metaverse?
Foresight News
特邀专栏作者
2022-08-29 12:00
This article is about 3808 words, reading the full article takes about 6 minutes
The digital identity space will generate more than $600 billion in revenue by 2030.

Original title: "Digital ldentities Market Repont: Who will we be in the Metaverse?"

secondary title

Original compilation: angelilu, Foresight News

TL; DR

This report discusses the question of what digital identities mean to us humans and why we need them, the pros and cons of the real vs. virtual world, and the role of digital fashion in enabling self-expression.

To write this report, we collaborated with a number of professionals from Metaverse, NFT, and other institutions. The current market structure and dynamics are thoroughly studied.

Everyone is talking about the Metaverse - a new mode of human interaction. It's poised to be the next trillion-dollar opportunity in tech, with more and more companies showing interest in immersive virtual places. These venues will enable customers to travel beyond what is physically possible.

Its sharp growth in attention has been fueled by heavy investment from businesses looking for new ways to engage with customers, and venture capitalists looking to fund the next generation of unicorns. Entrepreneurs are building new worlds and creating innovative ways for people to interact.

Our main point is that the digital ID market is still in its infancy – but will grow exponentially in the coming years.

With our forecast that the digital identity space will generate more than $600 billion in revenue by 2030, and as people’s lives increasingly move to the digital realm, the answers to some of the core questions about digital identity in this report become even more important:

  • What should our digital identities look like in the future, and why?

  • What are Web3 native companies and established brands doing?

  • What will happen in terms of M&A activity in this space?

Companies are building out the infrastructure for digital identity and creating an ecosystem that can be divided into various types:

Avatars play an important role in expressing one's digital identity in a virtual space, and large technology companies and emerging third-generation Internet companies are at the forefront of digital identity-enabled vertical industries.

Digital fashion offers a means of self-expression on a nuanced level in the digital space, and established brands in the market are starting to recognize its value and investing heavily in this area.

Startups are creating fundamental concepts, and in addition to working on visual representation, many are grappling with the trust gap in digital identities. For this, encrypted credentials seem to offer a promising practical concept.

Two main fronts are driving M&A activity in this space:

  • Large enterprises are trying to get in on the action by acquiring smart teams and internalizing technology

  • Large firms expand their offerings horizontally by acquiring adjacent businesses, or vertically by integrating parts of the value chain.

what is metaverse

To put it simply, there is no exact definition of the metaverse. Is it a copy of the real world in the digital world, or is it a product of great imagination?

Brian Trunzo, head of Metaverse at Polygon Studios, said the Metaverse represents a new digital realm that will improve the relationship between consumers and businesses. Digital identity will play an important role in this, allowing users to take ownership of their data and decide when and how their data is used.

The exact definition of the term Metaverse is under discussion, and maybe there is no need for a clear definition now, and the development will be different in the next few years. Who would have thought of what the Internet was like ten years ago, keep thinking Be as open as possible and remove the mental constraints these definitions place on our imaginations to truly embrace this opportunity. Here are some directional features to help you perceive the Metaverse:

  • interoperable identity

  • Blending of digital and real life

  • Carry identity and property through NFT

  • move across space

  • real-time human interaction

1. Opportunities for brands

Most likely, there won't be "one metaverse", but rather many individual metaverses, possibly divided into different themed metaverses, some of which will be connected to interoperate.

2. Brands entering the metaverse

3. Five major events about the metaverse

  • Metaverse is a gaming forum, advertising platform, and center of social interaction.

  • Huge opportunity for merchants and creators - Nike bought RTFKT, Adidas bought NDFKT, Microsoft bought Activision.

  • Consumer interest is on the rise—searches for the Metaverse are up 2,200% in Google Trends in 2022.

  • NFTs are the key - digital ownership is becoming a reality.

  • Human creativity is raised to a new level - leaving the constraints of the physical world.

Digital Identity: Who We Will Be in the Metaverse

1. From Physical Identity to Metaverse Identity

  • Physical identity: including how you look, where you go to school, where you live.

  • Internet identity: what you searched for, what you bought, what you said online.

  • Metaverse identity: your domain name and virtual address.

What we mean by metaverse identity is that you connect your physical and internet identity with a digital identity, and a digital identity is only available if you want it to be, and you can control your interactions with others and control information about you. For personally identifiable information, the required support layer is a decentralized platform built on public blockchain technology.

2. Avatars: Digital identities are taking shape

An early embodiment of digital identity is the world of avatars, an extension of our virtual realm. There are no constraints on what these Avatars can look like, but there are divisions, and big tech companies like Meta are working hard to design avatars that are as close to our real identities as possible, outfitting them with purchasable clothing from famous brands, focusing on realizing the true identity of a A virtual representation of a person's real-world characteristics.

Another voice said that digital identity should focus on anonymity and diversity in the virtual world, and break the long-standing patterns and limitations of the real world, such as living environment, socioeconomic status, gender, physical characteristics, etc.

Sorry Meta, this is not what Avatars are supposed to be, Avatars are our new digital identities in the Metaverse, let's use our imaginations and seize this opportunity to be who we really want to be and build a more inclusive and diverse digital nation. —Sebastiel

Without judging the right or wrong of the two perspectives, ultimately, we need this 2D/3D version to interact using virtual services.

Digital Identity Avatar Map

Compared to human-like Avatars, Abstract Avatars have the following characteristics:

  • Authentic self-expression: can change dynamically according to character, mood or opinion;

  • Social class mobility: people with disabilities can express themselves unrestrictedly online;

  • Open diversity: the feeling of being a different race, gender or even species can be experienced through different Avatars;

  • Interaction design: breaking the interaction limitations of humanoid Avatars such as talking, dancing and playing games;

  • Greater Creativity: Opens up new design possibilities in areas such as virtual storytelling, visual arts and entertainment.

3. Digital trendy brand

The new Web3 paradigm offers unprecedented opportunities for the digitization of the fashion industry, and in recent years we have observed three main trends and players in digital fashion:

  • Newly Created Web3 Native Digital Fashion Brand

  • NFT-based digital fashion collections for brick-and-mortar brands

  • Digital fashion infrastructure layers (e.g. marketplaces, showrooms, creator tools)

According to McKinsey & Company, global spending on virtual fashion merchandise will exceed $30 billion in 2021, accounting for 2% of the global fashion market, but there will be more market opportunities as adoption of the metaverse and digital identities grow was developed.

According to Megan Kaspar, co-founder of Red DAO, there are five main trending use cases for on-chain digital fashion today: investment, digital tailoring, 2D wearables, 3D wearables, and proof of supply chain.

There are three drivers that can trigger the adoption of digital fashion, one of which happened recently in China, where the Chinese version of Instagram, Xiaohongshu, which has over 148 million daily active users, recently launched a marketplace for NFTs. AR digital fashion was the main driver of sales and the most popular use case for the platform.

4. Make digital identities more trustworthy

Contrary to the real world, digital identities employ a cryptographic rather than a humanistic root of trust.

Web3 opens up new possibilities for security and privacy controls. Encrypted credentials can be generalized to metaverse applications that use digital identities. Although these credentials may eventually become very complex, wallet addresses and history are already a good example. start.

digital identity market

1. Digital Identity Ecosystem Map

While many emerging concepts are just being created, the first market segments for digital identities have already emerged.

  • Virtual Worlds: Such as The Sandbox, Decentraland, and Somnium Space are building NFT-native worlds so that users can not only truly own their own identities, but also own the land and items in the world.

  • Avatars: Facilitating the realization of digital identities, communities, brands or creators can develop their own collection of Avatars, including matching fashion collections.

  • NFT PFP Collections: Owning an NFT can enter the corresponding community, giving digital identities a sense of belonging or a view on certain things.

  • Digital Identity Infrastructure: Addressing trust gaps in digital identities and ensuring identity security and privacy.

  • Digital Fashion: The aim is to enable people to equip their digital identities with a variety of clothing options that suit their personality and circumstances.

2. Market size: How big will the impact of digital identity be?

We believe that the economic value of the digital identity space will grow exponentially over the next 10 years, and compared to other technologies in the Web 2.0 era, digital identity no longer requires the basic technical infrastructure to be built from scratch. The open-source nature of Web3 accelerates the software development cycle. In addition, consumers are increasingly keen on their digital identities and are willing to pay for their digital identities.

We expect the digital identity space to generate more than $600 billion in revenue by 2030.

Acquisitions - an expanding ecosystem

In any innovation cycle, as an industry matures, network effects and economies of scale become more pronounced, and larger players expand their offerings through horizontal acquisitions of adjacent businesses, such as decentralized cryptocurrency exchanges Uniswap has acquired Genies, an NFT market aggregator, or there have been vertical acquisitions, such as NFT market Opensea's acquisition of NFT market aggregator Gem.

  • Research Driven Buying

  • Integration and Decentralization

Concluding Thoughts: Why Get Involved Now

Who will we be in the metaverse?

Since this question will largely determine who will be involved in value creation, there will naturally be a range of different stakeholders with varying interests.

Tech giants like Meta are working to connect real identities with human-like avatars in order to bridge the gap between social media and metaverse personas.

There are also different camps in the Web3 community, which are similar to the core ideas of decentralization and community ownership, and there are strong calls for anonymity and diversity in the virtual world.

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