Top Trader Highlights Digital Identity as a Key Blockchain Sector

A top trader and blockchain analyst has identified digital identity as a burgeoning sector poised to lead the blockchain industry in the coming years. The analyst emphasized the sector’s adoption potential as a critical growth factor.

According to the analyst, digital identity possesses the capability to attract a significant number of users to the blockchain ecosystem, with only gaming having the potential to onboard more users than digital ID and proof of humanity.

The security proof layer of the blockchain is deemed essential, explaining why leading blockchain companies are increasingly directing their focus in this area.

Digital Identity Sector Undervalued

The analyst remarked on the present undervaluation of the digital identity sector. He anticipates that a considerable amount of on-chain value will be realized within this space. For instance, he highlighted the potential to onboard approximately 385 million individuals in the US onto the blockchain via digital IDs, leading to immense value creation for the sector.

Related: VeChain Awarded US Patent for Blockchain-Based Identity Authentication

While recognizing that government involvement may drive the adoption of digital IDs, the analyst underscored the inherent benefits of these solutions, including the implementation of zero-knowledge proof to tackle privacy and security challenges.

The broad deployment of blockchain-based digital ID across diverse industries is projected to generate substantial activity within the ecosystem, reinforcing the analyst’s view that it could become the next significant trend in blockchain and cryptocurrency.

Analyst’s Outlook on the DeFi Market

In addition to digital ID, the analyst asserts that the decentralized finance (DeFi) market is currently undervalued, especially in light of the large capital pools expected to enter the ecosystem.

Related: Cardano’s Prism Becomes Hyperledger Identus: A Decentralized Identity Framework

The analyst opines that the technological environment is ripe for these capital pools to merge and elevate the DeFi market’s value. Such a scenario could inject substantial liquidity into DeFi, potentially reviving the energy seen in the sector a few years back.

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