Earlier quoted context omitted.
In other words you have to harvest the parties' contact lists in order to do this matching?
We require access to your contacts. We do not harvest.
The most obvious way I see to support this feature is to build up a big table of contact connections, so that when I join and put in my phone number it can send up my list of contacts and find all the bidirectional connections to what's already in the database.
This means you're building up a big graph of how all your users are connected to each other, and to people who don't use Wave (yet). Is that not 'harvesting' the contacts? Do you do it a different way?