Technology allows prostitutes to advertise, screen clients, and be screened by clients in new ways that reduce transaction costs and allow prostitutes and clients to sort and signal each other more efficiently than before. Prostitution 2.0 seems safer, healthier, less socially visible or obnoxious, less coercive, and more rewarding than streetwalking or other forms of indoor prostitution. At the same time, concerns remain. In particular, Prostitution 2.0 does not eliminate all troubling information asymmetries between prostitutes and clients—particularly about health risks, criminal propensity, and trafficking.
To overcome the remaining problems in sex markets, Prostitution 3.0 requires four innovations: (1) verification of STD status; (2) verification of criminal history; (3) verification of anti-trafficking credentials; and (4) biometric identity verification. These four technologies could change prostitution from a market in which prostitutes and clients must guess at material information to one in which such information becomes routinely available.
The first three necessary technologies all require intermediated biometric identification to truly make Prostitution 3.0 succeed. Only if prostitutes and clients can be reassured that the physical person they are transacting with is the person that they digitally verified will Prostitution 3.0 improve prostitution markets.
What to do about street prostitution? The short answer is Prostitution 3.5—taking the improvements of Prostitution 3.0 to the street through location-based mobile technologies.

Prostitution 3.0? (PDF)