My thoughts as well, I love this!

Easy to do, easy to implement but hard to bypass. Also it tells me something about the network that is not vying for a slice of the attention economy and isn't going to do everything it can to keep me on the site.

Why "hard to bypass" would be a sufficient thing? It depends on the technology used to connect the two phones. Bypassing this process can range from "easy" to "quite complicated", but it remains possible. Once the security is compromised, the entire network loses its core value since a single interaction is enough to establish a permanent connection.

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Don't underestimate the stubbornness of "get rich easy" people when it comes down to cheating etc. Even if it's not easy or cost effective, if this was going to be actually viral, they would tap real phones in click-farms to game the system. And do it once a year.

It's true that there are people who pay a premium for thinking they got one up on you, and will waste $1000 of effort to get $100.

But it wouldn't actually work well. It doesn't even need physical invites, keeping track of the invite graph is a great way to kick scammers out. It works. It's been demonstrated to work well since at least 2004.

The reason social media sites don't do it is not that it doesn't work - it's that growth trumps those concerns. Making onboarding as easy as possible is more important than keeping scammers out.