HandyCon 2025 | Day 3 - Handshake’s Future – Navigating Fork Proposals and Next Steps

Transcript:

00:00 Introduction to Handshake

• 00:00 Jesse introduces himself as an enthusiast of the Handshake ecosystem, highlighting his contributions and collaborations.

• 00:41 Discussion about initial involvement in Handshake, with mentions of Andrew Lee's introduction and excitement about the project.

• 01:17 Andrew shares his background in Bitcoin app development since 2012 and involvement in launching Handshake.

02:11 Personal Stories and Connections

• 02:11 Chango recounts discovering purse.io during a meetup in Bali, leading to his interest in blockchain companies.

• 02:46 Chango discusses returning to the U.S. and visiting blockchain firms, including interviewing co-founder JJ from purse.io.

• 03:35 Brian shares his history with domains since 1996 and how he became involved with Handshake at a conference.

03:58 Community Insights

• 03:58 Brian describes Texas's strong crypto community and its significance for freedom and economics.

• 04:21 Mention of large Bitcoin data centers located near Brian's home, emphasizing Texas's role in crypto mining.

• 04:57 Alex introduces himself as a UX design manager at Namecheap, sharing how he learned about Handshake through the company’s interests.

05:41 Future Discussions on Handshake

• 05:41 The panel shifts focus to discuss the future of Handshake amidst ongoing debates about hard forks.

• 07:04 Acknowledgment of challenges faced in decision-making within decentralized environments like Handshake.

07:47 What Are the Concerns with Handshake Tokenomics?

Overview of Tokenomics

• 08:24 1.36 billion of the 2 billion total supply was pre-mined; 950 million airdropped to developers.

• 09:03 680 million set aside for mining, but little of the developer airdrop has been claimed.

• 09:40 Major criticism revolves around tokenomics and potential solutions include making unclaimed coins unclaimable.

Community Impact and Discussions

• 10:15 The conversation about hard forks is significant; community cohesion is essential despite challenges.

• 10:50 Some community members have left due to contentious discussions; maintaining unity is crucial.

• 11:14 Difficult conversations are expected in consensus changes, highlighting the need for safe spaces for dialogue.

Airdrop Motivations and Fair Distribution

• 12:28 Initial motivations behind airdrops were to support open-source developers and seed network participation.

• 12:51 Successful projects since Bitcoin typically involve some form of fair distribution or initial participant seeding.

15:30 Airdrop Mechanism and Its Challenges

• 15:30 Only 2-3% of the airdrop has been claimed; 97-98% remains unclaimed, totaling around 600 to 900 million coins.

• 15:51 There are differing perspectives on whether Bitcoin's model can be replicated; some argue it was unique due to being the first mover.

• 16:12 Satoshi mined early blocks and distributed coins through faucets, accumulating nearly 5% of the network at minimal cost.

16:34 Decentralization vs. Governance Mechanisms

• 16:34 Concerns exist about recentralizing control into a foundation, which could violate community ethos.

• 16:58 A mechanism is needed to aggregate attention and build initial stakeholders to address cold start problems.

• 17:19 Previous proposals aimed at governance have not been perfect; challenges remain in upgrading proof-of-work networks compared to proof-of-stake ones.

17:41 Challenges in Governance Systems

• 17:41 Upgrading proof-of-work networks is more complex than for proof-of-stake networks due to miner dynamics and stakeholder engagement.

• 18:26 Direct democracy has historically failed; representative democracy may offer a better solution for blockchain governance.

• 19:26 Information asymmetry among stakeholders complicates consensus-building efforts in decentralized systems.

20:14 Proposed Solutions for Effective Governance

• 20:14 A Dow system with representatives could help streamline decision-making by leveraging experienced members' expertise.

• 20:36 Moving away from direct democracy is essential as it leads to repeated failures in governance structures over time.

• 21:12 Proof-of-stake networks have built-in mechanisms for decision-making but still require refinement for effective governance.

21:35 Upgrading Challenges in Permissionless Networks

• 21:35 Limited individuals (Matt Zipkin, Nodar, JJ) hold significant power over upgrades, complicating progress within permissionless networks.

22:32 Discussion on Bitcoin and Governance

Key Insights

• 22:32 The analogy of GitHub keys as legislative and miners as judicial branches is debated; historical context is important.

• 22:56 Early Bitcoin development lacked funding, requiring dedication from developers; the existence of dev airdrop coins is seen as a miracle for development.

• 23:19 Governance experiments can lead to conflict; building on Bitcoin requires commitment from its community.

Challenges in Tokenomics

• 23:41 Executing changes in governance faces opposition; past network splits (e.g., BCH, ETH) inform current discussions.

• 24:17 The need for consensus on software adoption raises questions about necessity and feasibility of changes.

• 24:39 Addressing tokenomics complexity is crucial due to dual economies: name side and token side.

Economic Viability

• 25:12 A low coin price discourages mining; supply must be tightened to encourage mining activity.

• 25:36 Handshake's hyper-deflationary nature limits liquidity, complicating exchange integration.

• 25:58 Continuous burning of coins does not guarantee value increase without demand; addressing demand issues is essential.

Future Considerations

• 26:46 Future interest from high-profile figures could drive demand for handshake domains, but profitability for miners remains critical.

• 27:44 If mining becomes unprofitable, blockchain production halts, risking system failure; economic sustainability must be prioritized.

• 28:07 Attention drives liquidity and price dynamics; focusing on attracting attention may yield better results than merely adjusting supply.

Conclusion on Utility and Reallocation

29:50 Discussion on Network Splits and Innovation

Understanding Consumer Perspectives

• 29:50 The unexpected dividend from Ethereum's split raises questions about consumer perceptions.

• 30:21 Concerns exist regarding potential network splits, such as "handshake classic" or "handshake cash."

• 30:54 Discussion on whether exchanges could support both chains and the implications for innovation.

Chain Split Concerns

• 31:19 Potential risks include 51% attacks and lack of consensus among users.

• 31:44 Exploring the idea of having names and coins on both chains to facilitate resolution.

• 32:04 Acknowledgment of opposing views and the need for a mature conversation about chain upgrades.

Role of Namebase in Development

• 32:27 Namebase is often confused with handshake; its role in user experience is significant.

• 33:01 Insights from Nodar, an employee at Namebase, suggest a soft fork may be preferable over a hard fork.

• 33:45 For changes to occur, Namebase must agree to allow development efforts.

On-chain Activity and Tokenomics

• 34:32 Increased on-chain activity is essential for improving token prices and overall ecosystem health.

• 35:07 Reallocation strategies should focus on bringing builders into the ecosystem rather than burning coins.

• 35:40 Clear definitions are needed before considering any forks to ensure productive outcomes.

Key Points for Future Consideration

• 36:15 Agreement on necessary actions has yet to be established within the community.

37:03 Discussion on Handshake and Attention

Backward Compatibility and Name Claims

• 37:03 Discussion on the importance of backward compatibility with legacy internet for I can names.

• 37:37 General support for releasing more I can names and extending legacy systems.

• 38:00 Core issue revolves around what the chain and community need for growth.

Attention and Onchain Activity

• 38:22 Emphasis on the need for attention to drive liquidity, price action, and onchain activity.

• 38:44 Price follows attention but also requires scarcity; fundraising may be necessary.

• 39:08 Scarcity alone does not guarantee value without market awareness.

Value Perception in Market

• 39:59 Importance of convincing others of an asset's value; relates to shared perceptions in fiat currency.

• 40:24 Marketing is crucial to create a shared belief in value among potential buyers.

• 40:47 The challenge lies in acquiring attention effectively, which often requires significant investment.

Funding and Development Challenges

• 41:43 Building a successful ecosystem involves substantial costs related to marketing, development, and partnerships.

• 42:19 Debate over how to manage coins: either limit circulation or use funds for innovation incentives.

• 42:55 Discussion about balancing innovation with traditional approaches within the community.

Tokenomics Concerns

• 43:27 Acknowledgment that while handshake functions well technically, its tokenomics are perceived as broken.

Governance Challenges in Network Upgrades

Understanding the Governance Dilemma

• 44:32 Upgrading the network raises governance questions, often leading to conflict and greed within ecosystems.

• 45:03 The challenge lies in balancing consumer benefits with governance over financial resources.

• 45:27 Exploring dual-chain names could provide a solution, reminiscent of replay protection in past forks.

Historical Context and Community Dynamics

• 45:49 Historical precedents exist for resolving disagreements; community discussions can be lengthy and controversial.

• 46:11 Past experiences with BCH and ETC highlight liquidity issues and the importance of community cohesion.

• 47:06 Development funding is crucial; without it, chains risk stagnation despite passionate supporters.

Protocol Changes and Funding Initiatives

• 47:27 Diverse opinions on protocol changes reflect the complexity of governance decisions within communities.

• 48:04 A recent $50,000 fund aims to catalyze training for protocol upgrades but faces challenges in execution.

• 48:27 Identifying capable individuals for protocol changes is essential; not all upgrades are detrimental.

Decision-Making Complexity

• 49:10 Discussions around name claims reveal differing opinions even within small groups; consensus is hard to achieve.

• 49:54 Minimum viable governance concepts emerge as necessary for effective decision-making processes.

• 50:20 Engaging the community requires structured conversations beyond simple polls or thumbs-up votes.

Consensus Building Challenges

• 50:43 Establishing a clear system for reaching consensus remains difficult; thresholds need definition.

• 51:05 The lack of a robust governance framework complicates decision-making processes significantly.

52:02 Discussion on Bitcoin and Governance

Community Dynamics

• 52:02 Arguments often arise within online communities, leading to burnout from debates.

• 52:25 Bitcoin experienced significant governance wars in 2017; currently, it seems stable compared to Handshake.

Governance and Leadership

• 52:50 The winning side in Bitcoin's governance was the one that effectively garnered attention, not necessarily based on technical merit.

• 53:12 Caution is advised against idolizing certain figures in the community who may not have contributed meaningfully.

Upgrading Challenges

• 53:34 Achieving consensus on upgrades requires clarity on problems and goals within the community.

• 53:56 Attention is a key factor influencing liquidity, price, and development activity.

54:18 Community Engagement and Decisions

Ongoing Initiatives

• 54:18 Monthly Discord meetings and Twitter spaces are held to engage the community around Handshake topics.

Decision-Making Process

• 54:42 Founders' agreement could lead to unified decisions; however, there has been resistance to proposed ideas for upgrades.

Controversial Proposals

• 55:04 A recent proposal faced controversy but reflects decentralization principles within Handshake.

55:49 Burning Tokens Debate

Community Sentiment

• 55:49 High support for token burning proposals exists; some builders may prioritize reallocation over burning.

Perspectives on Burning

• 56:11 While some advocate for burning tokens to increase value, others believe it won't significantly impact market dynamics.

Market Behavior Insights

57:41 Integrations and Partnerships

• 57:41 Importance of partnerships with traditional finance for cryptocurrency adoption.

• 58:06 Ripple's success despite skepticism; people care more about results than the story behind it.

• 58:27 Debate between old-school Bitcoiners and newer innovations in cryptocurrency.

59:00 Collaborative Hard Fork Discussion

• 59:00 Questioning the feasibility of a collaborative hard fork versus contentious ones.

• 59:24 Need for community preparation and voting on upgrades to avoid splits.

• 59:57 Concerns over changing tokenomics amidst ongoing debates within the community.

01:00:20 Community Dynamics and Consensus

• 01:00:20 Active debate on reallocating funds for effective use among holders.

• 01:00:52 Tension between decentralization ideals and practical upgrades in the network.

• 01:01:13 Emphasis on conversation as a means to reach consensus without conflict.

01:01:48 Creative Solutions in Cryptocurrency

• 01:01:48 Importance of divergent thinking to prevent network splits.

• 01:02:21 Collaborative hard forks offer optionality for community members regarding which version to support.

• 01:02:43 Comparison of Handshake community ideologies with Bitcoin Cash (BCH).

01:03:06 Market Evolution and Decentralization

• 01:03:06 Acknowledgment that market dynamics have shifted since Bitcoin's inception 15 years ago.

• 01:03:31 Majority of crypto investors may not understand or value decentralization principles.

01:03:53 Future Regulatory Landscape

• 01:03:53 Potential for new regulations to incentivize decentralized blockchains.

01:05:00 Cryptocurrency Reserves and Community Decisions

Overview of Cryptocurrency Reserves

• 01:05:00 Discussion on XRP, ADA, and Bitcoin's role in reserves; only Bitcoin confirmed for reserve status.

• 01:05:22 Other cryptocurrencies may be seized during criminal investigations; Bitcoin classified differently from others.

Security Classification Concerns

• 01:05:46 Handshake is not a concern as it ranks low on the security classification list.

• 01:06:07 Emphasis on the importance of miners in proof-of-work systems compared to Ethereum's approach.

Community Engagement and Future Discussions

• 01:06:43 Acknowledgment of ongoing discussions about community decisions; need for clearer communication.

• 01:07:06 Importance of addressing hard fork components; name claim seen as the easiest part to tackle.

Commitment to Technology and Future Growth

• 01:07:29 Recognition of community interest in cryptocurrency technologies; belief in future potential.

• 01:07:50 Historical context provided regarding Bitcoin's early traction compared to other coins like Doge.

Expanding the Conversation

01:08:13 Encouragement for broader community involvement beyond small groups; upcoming spaces hosted by Todd mentioned.