Blockchain Is Changing How Dating Apps Work

In its relatively short existence, online dating has gone from being a highly stigmatized way to meet people to the default strategy for locating dates among younger, and even older, generations. Older models based on sites like eHarmony have given way to gamified systems like Tinder and its contemporaries, but the equation has remained mostly unchanged. Users create profiles intended to exhibit the best possible impression (sometimes to the point of exaggeration or lying) before other users make selections based on limited information if they are interested.

The industry is undoubtedly in a boom after millions of new users flocked to join online dating services in recent years, but it is not without its headwinds. Most of the existing apps, including major names like Tinder and Bumble, create little incentive for honesty, rewarding those whose profile looks best, and not the most transparent. Moreover, people don’t magically become extroverts online, and for some users finding a match is still a challenging process.

Nevertheless, the industry continues to evolve, and new startups are introducing blockchain into the equation in an attempt to overcome some of these hurdles.  The technology allows for creative models that shift incentives, and by using many of its inherent advantages, startups are building on an already popular foundation to produce an even better experience for all users.

The Transparency Problem

One of the biggest issues dating apps face — and a problem that has existed since inception — is honesty. In the real world, people have fewer chances to lie about certain aspects of their identities, especially in relation to physical appearance and other easily verifiable details.

Online, users must display a certain degree of blind trust, assuming that the person interacted with is truthful, an aspect in application-based dating that isn't always a given. The main issue here is the lack of an incentive to be transparent.

The goal for most people on apps like Tinder is to identify as many matches as possible, an objective that lends itself poorly to honesty. Users are less likely to post an accurate photo or description of themselves if they perceive it to be harmful to their dating opportunities. Apps have made attempts to punish users, but there is no real mechanism to prevent the problem in the first place. Blockchain, on the other hand, has a ready-made solution designed to address the problem.

Blockchain technology is built on the idea of full transparency and immutability, two factors that play a large role in verifying users’ identities while maintaining the option of privacy. Because users can freely share information which will remain anonymous, but which is easy to verify on a chain, identities are thereby easier to validate. Companies like Viola and Hicky have both implemented blockchain solutions that increase transparency by requiring users to verify their identities.

More importantly, blockchain helps companies offer strong incentives for good behavior such as undergoing a verification process or adding more details to a profile. This in turn promotes a more transparent ecosystem that lets users feel confident while avoiding scams, fraud, and dishonest users. (See also: Beware of these Five Bitcoin Scams.)

Improving the Matchmaking Process

The other problem for many users is actually finding a match. Despite the fast-rising popularity of the online dating scene, many people still rely on their real-world social networks to find a match, a feature most dating apps have yet to incorporate. The issue in this case is a lack of clear incentives for helping others find a match. In the real world, friends, family, and colleagues may help others find a date for altruistic reasons, but among strangers that is less common.

Online, the problem results in awkward interactions, failed matches, and frustration by shier users who are unable to find a partner this way. In an ecosystem where matches have been gamified into a measure of success, this dynamic can be compounded and cause users to simply leave the app altogether.

It’s hard to ignore that some users do prefer this mode of finding a partner, and blockchain-based startups have come up with interesting solutions that could resolve the issue. Blockchain startup Ponder is one such app adding a twist to the regular dating dynamic by allowing users to participate simply as matchmakers. By employing this model, users can connect other participants whom they believe would be a good match, while others can volunteer to be matched, allowing third parties to select their potential next date.

Other apps have introduced similar models, such as Matchpool, which hinge on this very situation. In both cases, users are rewarded for being helpful. Ponder awards users who match others with tokens, with the incentive to quickly earn more as they match additional users. This presents a third way for both matchers and those being matched. Instead of relying on computer algorithms or a highly gamified ecosystem, users can trust others who are motivated to succeed in matching them, as they have an incentive to work to fulfill everyone’s best interests.

Redefining Dating Apps

Much of the press blockchain has received has focused on its large-scale applicability, from logistics to IoT functionality and even the broad travel industry. However, by localizing the technology to the dating industry, startups have been able to quickly target and start disentangling some of the biggest drawbacks the market has so far been unable to resolve on its own.

With new apps quickly emerging and threatening to capture market share from established companies like Match and eHarmony, the industry is faced with a real need to embrace innovation or be cannibalized by its younger visionaries. By adopting blockchain and the easy fixes it offers, dating services can improve their transparency, provide users with a more complete experience, and create incentives for honesty and good behavior. (See also: SEC Halts Trading In 3 Firms Linked To Blockchain and Cryptocurrencies.)

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrencies.