Love Is 'No Battlefield' With The Blockchain, But Is It A Perfect Match?

images (3).jpg

How was Valentine’s Day for you? Did Cupid, the God of Love, shoot his arrow in your favor? But whether you like it or not for retailers, restaurants and hotels it’s a major event promising big revenues. This year, the National Retail Federation expected U.S. consumers to spend almost $20 billion for Valentine’s - up over a billion from last year.

It was also anticipated to be a busy season for online dating apps and services. With the negative stigma associated with online dating seeming to have been shaken off, today the practice has become a socially-accepted means to find partners.

As an industry, dating services have now become a $3 billion market. Developments in technology and generational turnover have enabled the industry’s growth. Certainly online dating has gone a long way from its infancy of matchmaking sites in the early 2000s - aka the “noughties.” Now, the experience is geared towards the mobile lifestyle through apps like Tinder and Coffee Meets Bagel.

Millennials have been instrumental to this. They may be known as a lonely generation, but they do yearn. And, given their penchant for technology, many have turned to online dating services to find partners.

A study by Pew Research Center, a non-partisan fact tank, has shown that use of dating apps by Americans in the 18-24 years age bracket tripled in 2016 versus figures in 2013. Interestingly perhaps millennials are not the only ones participating. Usage by “Baby boomers” aged 55 to 64 also doubled within the same time span.

Today, emerging technologies like blockchain are now figuring out ways into the industry as well. Several blockchain start-ups have set their sights on building online dating services on top of the technology.

For example, networking and connection platform MatchPool is a pioneering dating-meets-blockchain application. And, up-and-coming services like Hicky and Ponder, ventures that both scheduled holding their public token sale on Valentine’s Day itself, are also seeking to improve upon the current online dating experience by applying blockchain’s strengths.

Slightly further afield the technology has even been tested and applied in an effort to stem piracy in the adult entertainment industry by Slovakian blockchain company DECENT, which is seeking in the main to bring blockchain to disrupt content distribution across the media and music industries.

Manshu Agarwal, Ponder’s CEO and co-founder, commenting said: “The blockchain has been called the Internet of Value, providing new ways to reward people for their time and effort. These methods can be channeled to create better online dating systems with higher match rates, less time spent browsing and messaging and more time meeting real people.”

Ponder is trying to utilize blockchain’s strengths to create a transparent matchmaking platform that incentivizes it’s users to create successful matches.

Disrupting Dating & Security

The explosion of mobile adoption has greatly changed the online dating landscape. The mechanics of online dating are now far removed from its early days, which mainly featured services offering paid matchmaking.

Today’s apps have effectively leveraged mobile’s features such as geolocation, messaging and cameras to connect interested daters. Matchmaking has also been simplified to become a swipe-left-or-right activity. These may have created a faster and more convenient experience but certain issues still remain.

Many still complain about the very generic matchmaking that happens with most services. Users also still fail to find suitable partners despite the increase in participants.

Only 5% of Americans in committed relationships surveyed indicated that they have met their significant others online. Fake profiles and information still proliferate in these services, leading to a lack of trust among users. Many, particularly female ones, also report of harassment through dating platforms.

Security is also a concern. After suffering from a catastrophic breach in July 2015, dating platform Ashley Madison again had security concerns last year that left users’ private and explicit photos vulnerable to leaks.

The Canadian online dating service gained wide media attention after the hackers stole all the firm's customers data - including emails, names, home addresses and credit card information - threatening to post the data online.

Such episodes also raise the issue of centralization. Most of these services have full control over all information shared on their platforms so security breaches often lead to users’ personal information becoming exposed.

Julian Fuchs, Hicky’s founder, said: “The online-dating sphere is currently flooded with fraud and mistrust. Traditional dating services are not just standing aside from taking any measures to solve these issues but often encourage those to increase traffic and cash inflow.”

Blockchain can improve upon this by bringing security, trust, and economics into the experience. The technology provides means to secure data and transactions and even incentivize user involvement.

Encouraging Trust and Truth

Services like Hicky, MatchPool and Ponder all aim to bring trust to online dating. These platforms believe in leveraging decentralization and encryption to secure the information that users provide. Decentralization also eliminates the single point of failure that attackers commonly exploit helping these systems prevent threats of data breach.

For Hicky, creating trust involves making users feel that the information they provide is safe and that the information they receive in return is accurate according the protagonists behind the venture.

Hicky requires a verification process that includes sharing of biometric information to validate the identity of those participating on the platform. The platform touts that it ensures that only those with express permission are able to view any information shared by users. Further security is provided through encrypted communication.

Fuchs added: “I believe that modern technology can drastically change the situation. Blockchain gives an opportunity to make the sphere much more transparent and trustworthy, providing 100% identification of the person. The Hicky platform will work as a place to meet your real soul mate and not someone for a one-night stand.”

Ponder also encourages the participation of “real people”, however one might exactly interpret that. The platform requires all Ponder token holders to pass through Civic’s identity management. Such a mechanism is held up as discouraging those using fake identities and profiles from using the service.

Incentivizing Involvement

In addition to security, blockchain brings an economy to online dating. With the use of blockchain smart contracts and cryptocurrencies, it is possible for these platforms to incentivize online dating activities. Some argue that this could help make the experience more human and social, rather than be driven by algorithms that presuppose and presume users’ preferences.

Hicky plans to inspire good behavior by using a token economy. Users will have to stake tokens when going on dates. Bad behavior like standing up dates or being rude in interactions will cause a user to lose their staked tokens. The platform taps its own community to adjudicate and resolve conflicts and those participating in conflict resolution could earn tokens.

MatchPool focuses on the matchmaking element of dating. The platform provides tools to enable users to create positive connections to others and uses tokens to incentivize successful matchmakers. Dating, however, is just one of its use cases.

Ponder works similarly but is focused primarily on dating. The platform is couched in terms of putting faith in people’s good judgment in connecting daters. Matchmakers simply have to identify and match those they believe would be compatible.

If the prospects like each other, the matchmaker gets a reward through its token system. And, should the couple eventually commit to marriage, the matchmaker earns a larger reward. Ponder is also working on a group matchmaking feature, which would allow for the creation of sub-groups that could be based on shared values or interests.

As to the merits of using and applying blockchain technologies for dating and matchmaking industry, Siim Õunap, an FX and cryptocurrency markets trader, remarked: “Not many things need more protection than information about your private life. There is no better way to protect your data than by using the blockchain.”

The Estonian who is based between London and Tallinn added: “Most companies anyway, due to the new General Data Protection Regulation (GDPR) rules coming later this year in May will have to tighten up the security of their data, especially if they are based in Europe or deal with European customers. And, there is no better way to secure data than by using decentralized blockchain technology.”

Effective May 25, 2018, GDPR is designed to unify data privacy requirements across the EU. If firms market to or process the information of EU data subjects, which includes end users, customers and employees - they need to learn how to address these key requirements.

A Perfect Match?

These aforementioned new mechanics introduce fresh dimensions to the current online dating experience. The security and trust that blockchain brings could significantly curb the falsities that have plagued the online dating scene. But the start-ups involved in the space need to execute on their plans and get buy-in from users, if they are to monetize their efforts.

Blockchain’s transparency could also help encourage good behavior among users. The introduction of a token economy could also drive human participation and interaction into the matchmaking process. And, if these blockchain services lead to more serious and meaningful relationships formed among their users, then the technology and the activity could just be the perfect match.