If there’s one service people are still willing to pay for in this economy… It’s their dating apps from Match Group (NASDAQ:MTCH) and its peers. But is there a better alternative for Tinder, Match.com, Hinge or OKCupid users…on the blockchain?
In a Cointelegraph op/ed yesterday, a crypto privacy startup called Session argues that blockchain services can be safer and more secure for online dating. Let’s see how they make the case… And the other use cases of privacy blockchain services that are setting up compelling investments today.
“The Way That the Internet Operates Isn’t Conducive to User Privacy”
With our current setup, Web 2.0, a lot of your personal info passes through these apps. Not only do you need to provide your phone number to verify your identity to the app… After you’re matched, a common next step is to let the person call, text, or message you on social media, if they seem cool. Keyword: “seem.”
Harassment is a constant problem online – particularly for women, 60% of whom reported unwanted messages in a Pew Research survey. And the more of your “real” identity that goes online… The worse cyberstalking can get.
“Now, [users] can give a love interest their Session ID instead of a phone number or social media account, keeping those personal details private until they want to move to the next step,” suggests Session in the Cointelegraph op/ed Monday.
Under our current privacy standards, people have been blackmailed using intimate photos and messages…“catfished” and scammed out of money by people who aren’t who they seem…suffered identity theft and had their devices/accounts compromised by malware. Yet online dating has been the typical way to find a partner for years now.
Even if you manage to avoid the creeps and jerks online… These dating platforms can still be hacked. And niche dating communities may be special targets for hackers who negatively judge its members – the way Ashley Madison was a few years ago.
Why Blockchain Apps Can Be Safer From Hackers
Of course, you don’t have to use just any app to communicate with people online…romantically or otherwise. You can message people with an encrypted app like Signal – which has gone from 20 million users to 40 million in about a year as people have started to demand more privacy.
Because Signal uses end-to-end encryption, your message can only be read by your recipient…
But there are other ways to mess with users. And when a vulnerability was spotted in Signal in 2016, Hacker News noted that Signal’s popularity with “security professionals and privacy advocates” puts it “on the priority list of nation-state actors” to hack.
In that bug from 2016, cryptographers found that attackers could target large files passed on Signal “to modify a valid attachment by adding random data to it,” reported Ars Technica.
And the only reason this could have worked? Because Signal data passes through centralized servers – which attackers would have to “hack or impersonate” to exploit the bug.
The Bitcoin (BTC-USD) network, in contrast, is so decentralized that it’s never been hacked. And Bitcoin becomes harder to hack with every “miner” that joins the network: There’s around 70,000 of them worldwide, verifying network transactions to receive BTC.
Transactions on Bitcoin – and other public blockchains – are anonymous… But, it’s worth noting, they’re NOT private. Blockchain sleuths can identify you by your network-transaction trail, which is how the Bitfinex thieves got caught with $3.6 billion of stolen bitcoin, for instance.
So, this is where blockchain privacy solutions come in: Take the benefits of decentralization, then layer on privacy features.
How Can Privacy Work on a Blockchain?
Plenty of blockchain projects are popping up to offer privacy features. Before we get into which ones – here’s the basic technology involved:
The original privacy blockchain, Monero (XMR-USD), uses ring confidential transactions and stealth addresses. Ring CTs “can be verified while only the sender and receiver see the amount being exchanged,” CoinDesk explains. And the blockchain creates “one-time public keys for each transaction.”
Mix networks take in data packets from different users, “mix” them together, and send them along in random order. That way, it’s harder to trace your transaction when you use a mixer like Tornado Cash. The more people use them, the easier you can “hide in plain sight.”
Zero-knowledge proofs are more popular nowadays – but began with a 1985 paper co-authored by Silvio Micali of Algorand (ALGO-USD). ZK proofs can verify information on-chain, without communicating the information between parties.
ZK is kind of the new hotness in the New Digital World lately: Polygon (MATIC-USD), for one, “has made ZK a centerpiece of its strategic vision” for the past year “and has committed $1 billion to related projects.”
Crypto Apps for Investors to Note
Polygon ID just launched on June 23 with its first authentication service for Web3 that maintains privacy. Know how you can “Sign In With Google” on all these Web 2.0 sites and apps? What if you could do it without signing away all your info to Big Tech? Polygon says it’s possible with those zero-knowledge proofs we just talked about.
Next up: Polygon ID Wallet (for individuals) and Polygon ID Platform (for organizations). There’s also Polygon Nightfall 3, so businesses can transact on Ethereum (ETH-USD) privately… Without the likes of Tornado Cash, which is popular with money-launderers – and which at least one security firm, Elliptic, says it can crack.
Oxen is where you’ll find Session (mentioned earlier), as well as Lokinet, which can host “Zoom Video on the blockchain” (privately), plus private browsing. The Oxen blockchain began as a “hard fork” of Monero, so it uses ring CTs and stealth addresses, too.
Nym uses that “mixnet” technology, with improvements. Like with Session, its developers are working to provide tech for private-messaging apps…as well as authentication services… and cryptocurrency transactions. Chelsea Manning has been working with the project as security expert and privacy advocate.
Also in the “crypto transactions” category: Aztec Connect, where “Private DeFi comes to Ethereum for the first time ever,” according to its launch announcement on Thursday, July 7. Right now, using DeFi on any public blockchain is kind of like using Venmo in public mode. (Which even Venmo got rid of.)
Wouldn’t you want your transactions kept private, like in your bank account? ask proponents of private DeFi. Speaking of banks, though, it’ll be interesting to see how private DeFi can coexist with regulators – who are keen on bringing know-your-customer (KYC) standards to crypto.
If developers on Oxen, Nym, etc. hope to attract users to a privacy browser there… Brave already passed 50 million monthly active users by January. That pales in comparison to Chrome, Safari, or Firefox – but uniquely, Brave has crypto incentives to attract users:
“By default, the Brave Browser rips out all the creepy ads & trackers from every web page you visit. Then it gives you the choice to see Brave Private Ads. If you do, you get rewarded with Basic Attention Tokens (BAT). If you don’t, that’s ok! The Brave Browser will always be free and private. Unlike Big Tech ads, Brave Ads don’t invade your privacy. Your data never leaves your device,” promises Brave.
If you do allow Brave Private Ads, they aren’t too intrusive, and they boast good engagement stats (since users can earn BAT tokens). This is how the company makes money – versus, say, cutting deals with search sites, like Mozilla Firefox does – along with price appreciation of the BAT crypto.
No matter how much users care about crypto, there’s another benefit of these privacy browsers: Your page loads faster without the ads (and ad trackers) inside them. BAT is a long-time pick in Luke Lango and Charlie Shrem’s portfolios, along with Polygon for their Crypto Investor Network. We’ll be sure to keep you posted on the latest and greatest here in The New Digital World, too.
On the date of publication, Ashley Cassell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. To have more news from The New Digital World sent to your inbox, click here to sign up for the newsletter.