HOTBIT AMA 🎉：Huge potential market of the decentralized domain name system — Handshake
The Host: Daisy(Global Community Manager of Hotbit)
The Guests: Eric, the contributor to HNS
Matthew Zipkin, the contributor to HSD
Q1: What is Handshake? What is HNS?
Eric：Handshake is a way to fairly assign and record the ownership of top-level domains (like .com, .org etc), without giving any centralized party control over the assignment process, or the ability to unfairly alter records of ownership.
At a technical level, Handshake is a new blockchain based root zone for new TLDs, designed to be able to coexist peacefully alongside the existing root zone which serves TLDs like com, and org, or even eventually absorb it entirely. If this sentence didn’t make sense to you, just keep reading.
Q2:How is HNS different from Bitcoin?
Matthew: Handshake is based on Bitcoin. it’s a UTXO based model. What Handshake adds is COVENANTS to transactions these limit how TXs can be spent and also control the auction (name-bidding) process.
Q3: Why is Handshake useful?
Eric：The use case is pretty simple, Handshake allows you to truly own a TLD
in the same way that Bitcoin allows you to truly own money bitcoin is to fiat as handshake is to an ICANN domain.
Q4: how is HNS different from DNS?
Matthew： so HNS extends the current DNS root zone, and that’s all…
Q5:What makes Handshake domain names valuable?
Eric：A combination of usefulness and scarcity to elaboarte a bit here
Verisign which runs .com currently makes about 1 billion dollars,from selling sub-domains annually,also renewals, etc.The company is valued at around 20 B, so its fairly straightforward that domains in general have value.A thing that’s kind of unique and interesting about domains is that they’re one of VERY few digital assets that are naturally scarce. i.e. only one person can have the name “hotbit” on handshake.so there’s a natural sort of value that comes with that scarcity, which is cool Handshake domains are worth LESS than icann/traditional domains because less people can use them (so far, though we’re just getting started),but they’re also maybe worth more, because you can truly own one as discussed in the previous example.
Q6:how do i acquire a name on the HNS blockchain?
Matthew： So there is an on-chain auction process run by transaction covenants.
First any use can OPEN a name, this broadcasts a name and its hash to the network
About 36 blocks later, the BIDDING phase begins. Any one can place a bid on a name. Bids are BLINDED with a high value and another hash, so NO ONE KNOWS what you are bidding.
After 5 days is the REVEAL phase, when bids MUST be revealed (or you lose your coins forever!)
After 10 more days the auction is closed.
Whoever placed the highest bid wins the name and only pays the value of the SECOND HIGHEST BID.
This is called a “vickrey” auction.
There are diagrams in my slides from a recent talk:
Q7: What makes the HNS coin valuable, and what factors might affect its price?
Eric：The first thing that drives HNS value is the burn mechanism: HNS coins are burned every time an auction with more than two bids concludes. This has resulted in about 1% of the circulating supply being burned in only two months. Comparing this to other tokens with burn mechanisms is pretty pointless given all of the differences in situation, mechanism, etc but however you look at it this is a remarkable level of activity from a network in its infancy: it took MKR/DAI over a year to have burned as much USD value as HNS has done in 8 weeks.
While comparing value burned is in my opinion not especially useful, I do think it’s interesting to compare the amount of risk involved in various token-driven networks. Handshake looks very good in this department — it has the same highly effective burn dynamics that traders love in exchange platform tokens like BNB or Bitfinex’s LEO, but has none of the counterparty risk that the exchange will simply stop honoring the token burn policy, alter it unilaterally, go out of business, etc. It also isn’t subject to anything analogous to the risk that MKR holders got a tough demonstration of recently — that a big price crash in ETH caused enough MKR to be printed that not only was all of the previously burned MKR restored, the system is actually currently inflated by a little under 6000 MKR or 2 million dollars.
Q8: can i bid multilpe times on a name?
Matthew： Yes you can bid as many times as you want on any name. But the winning bid still pays the second-highest bid price, so you may end up raising your own price!
Q9:What factors will accelerate adoption of Handshake names?
Eric： More browsers, more domain name resolution services, more wallets to support! At present, next dns has started to support it, and Brave Browser is also doing support work!
Q10:what happens if there is only one bid on a name?
Matthew：Then you win the name and you still pay the “second highest price” which is null … or 0 HNS!Lots of names are being aquired for free right now.There is no marketing development plan. Handshake can not focus on anything because Handshake is a blockchain, not a person. Would you like to promote HNS in Vietnam? I would be happy to provide you with resources to do so.
Q11:Specifically what kind of domains are likely to be valuable?
Eric：The answer to this question depends on how people end up using names. Here are a few use patterns I’ve been thinking of:
Bare names as TLDs/web addresses (TLDs as URLS)
People may use Handshake names as bare TLDs. At first it feels kind of weird to type a word in the URL bar and not have a “dot” something suffix, but you get used to it, and I could see this catching on especially for single-purpose sites where it makes them feel almost like UNIX commands. For example ‘amipwnd/’ is a site for checking whether your commonly used passwords are in any leaks, down for everyone or just me/ check whether a site is actually down or something’s just wrong with your internet, and whats my ip/, well, I’ll let you figure that one out.
Interestingly this not only is theoretically supported by the DNS specs, but is currently being used. The owner of the .ai TLD, a venerable cypherpunk named Vincent Aron Cate, who also happens to be one of the founders of the well known Financial Cryptography conference series, has a website hosted on the ai TLD itself! Apparently it doesn’t work in 100% of browsers, but for most people, if you just copy-paste “http://ai/" into your browser, you can see a very awesome 90s style page for the ai registry. That this basically works “out of the box” is good news for HNS name compatibility.
Bare names as crypto addresses
Another reason that people may value names that work well as single words is that they make cool crypto addresses. There’s a simple trick to allow wallets to use HNS names as addresses for literally any cryptocurrency (just add a TXT record with the relevant addresses in some standard format the wallet providers agree to — if you read the previous section, getting this done is definitely one of the most important “bridges” we can build early on).
So instead of having to do that stressful thing where Satoshi tells Alice his address is 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa, and Alice sends him 0.000001 BTC as a test, but she misheard the G as a J and has to start over, Satoshi can just tell Alice “send to satoshi please” and when Alice enters “satoshi” in her wallet, it does a quick DNS lookup to check Satoshi’s BTC address and then sends the coin. Having your own name, or some other cool word as your crypto address is likely to become a thing, like vanity plates, HK millionaires paying for phone numbers with lots of 8s in them, etc etc. I think it’s silly, but I also really, really want to get my name as my address, so there it is.
Names that are well suited for issuing SLDs
Other names that may be valuable are those which work well for issuing SLDs. For example, common last names (joe.smith, alice.yang etc) or suffixes which are good for domain hacks like how del.icio.us worked back in the day, or things like “.coin” for SLDs like bit.coin, privacy.coin etc.
Q12:why does HNS need its own blockchain instead of using bitcoin or ethereum?
Matthew：Handshake has been deesigned to be limited. Do one thing, and do it well. This way it can stay very streamlined and is more likely to be integrated into existing software like operating systems and web browsers. We don’t have to worry about fee pressure or mining irregularlites from other networks or censorhip from sub-communities.
Q13:why is hsd written in nodejs instead of c++ like most other bitcoin-based chains?
developers all have different opinions on programming languages (linux torvalds hates C++ for example)
and a lot of people really hate JS, but there’s no reason to. Great code can be written in JS and this library is an exceptional piece of excellent work by a few of the best developers in the spave (JJ and Indutny)
JS was built for async activity, and a full node has tons of events like this, so JS is uniquely constructed for this kind of thing.
its not as fast as compiled native code, but as far as scripting languages go, it is pretty damn fast.
Hopefully if HNS gets popular we will see implementations written in Go Rust and C++
Hotbit official website:https://www.hotbit.io/