The past month saw hash rates on the Handshake protocol more than 16x.
July 13th, 2020 | A look into the Handshake Protocol and its recent run up in hashrates.
Let’s not confuse Handshake with A handshake, which seems to be the antiquated physical way of politely grabbing another person’s hands in a firm-like grip, through quick up and down motions to signal a greeting or an agreement. In some instances, that handshake might be awkwardly prolongated, evoking images of Trump’s notorious handshakes which are well documented on many social media platforms. In the case of an SSL/TSL handshake, such an elongated exchange might prompt a failed connection leading to a 404. Or if a corrupted certificate is exchanged due to a Man-in-the-middle (MITM) attack, a host of other headaches would come along leading to a different view on what a handshake actually traditionally exchanges besides the supposedly innocuous agreement of acknowledgment (or in worst cases, COVID!!!).
In comes Handshake
For a project that has basically been “quiet” compared to other blockchain protocols working in a anonymous-like fashion, the Handshake protocol has crept up in an apace way the past month by seeing its mining hash rate 16x from around 25TH/S to now over 400TH/S. Falling in line with theoretical PoW mining economics, the price of HNS followed suit in the opposite direction starting from around $0.11 on June 7th hitting an ATL around $0.075 on June 28th, now recovering towards $0.0911.
It’s quite clear now how COVID has vehemently altered our lives in many aspects that has caused us to flip the script on a lot of things we’ve never questioned before. Without needing to get into too much detail of what we have experienced over the past 7 months, but the word dystopian could be understandably emblematic of what we have seen play out. The draconian social distancing and stay at home measures have basically placed us to be on the internet more so than we were before. This has inadvertently called for the need of more security and sovereignty in our internet lives as we have seen good actors try to spread important information fall into the hands of government censorship or bad actors trying to take advantage of our naïve internet time.
It was understood from the beginning of how the developers behind the Handshake protocol was going to join the blockchain movement in a concerted effort from the start. Ultimately with the goal of democratizing the way domain names are bought and sold, giving a new standardization around the Root Name Server, which is currently controlled by ICANN. Last year ICANN was egregiously caught attempting to sell the .Org top level domain (TLD) to a private equity firm for a whopping amount of money. A bit more on this later but this spun the question of how more centralized the internet has really become?
The digital TLS handshake
For a brief primer of what the Handshake team is trying to do, it’s best to quickly have an understanding of where the name comes from. No it does not come from our normal polite way of greeting people in person as introduced earlier, which we all now are staring to yearn more of, but rather the digital “handshake” our internet browsers make with backend servers to deliver you your daily “needed” non-essential social media content. It is basically a way for our computers to verify that the internet website we are about to connect to is secure and safe through a cryptographic process that takes milliseconds. Uday Hiwarale does a terrific job of breaking down common standard SSL/TLS handshakes in this article if you want to understand deeper.
But for a brief illustration, it basically looks like a couple of back and forth request and receive messages from the client to the server illustrated in the below graphic as a waterfall like process.
The crux is when a client sends a request to the server, the server sends back a certificate, issued by a centralized trustworthy Certificate Authority (CA) and the public key to the client. This way the client can “trust” that the website is who they are supposed to be and then attaches a ‘pre-master secret’ back to the server encrypted with the public key given. But like with any centralized entity, attacks on these CAs have happened. What’s more alarming is how one CA provider actually has over a 50% market share of all CAs. And who’s to say that these centralized attacks can’t happen again?
For such an arcane territory of the internet, the Handshake protocol tries to alleviate this through their decentralized PoW blockchain network, allowing users to create and purchase their own top level domains with their private keys, such as .com, .net, .org, etc. via a Vickery Auction style. This is essentially trying to “eliminate” the needs for ICANN and CAs that are all too prone to centralized attacks and greedy egos that place money on top of security at times. To most people, these two acronyms, let alone this topic, is of an esoteric subject that really doesn’t affect them in their daily lives. But what we have seen with the advent of Bitcoin being spawned up at coincidentally, or purposely, during the same time of the last financial crisis, the same can be said with Handshake and recent events such as below:
1. In 2011, a Dutch certificate authority, known as DigiNotor, was quickly declared bankrupt after a security breach in their systems was found causing them to issue fraudulent certificates which then resulted in major web browsers to blacklist all DigiNotar certificates at the time.
2. In the same year, another certificate authority known as Comodo issued fraudulent certifications to users for many highly visited sites leading users to believe they were accessing these sites securely when in fact a MITM attack could’ve occurred.
3. And last but not least, the irony in ICANN being exposed for attempting to sell the rights of the more popular TLD, .Org, to a shady private equity firm set up by the former executive of ICANN. What’s more interesting about this news, which led to actual protests outside of ICANN’s offices, was the fact that this alleged sale was about to take place after the price cap of .Org domains was taken off earlier.
How the Handshake has been shakin’ up to be
It’s hard to say whether this project will take off since it merely was launched earlier this year with the help of Tieshun Roquerre and the team at Namebase attracting a more retail focused crowd by making it exponentially easier for a novice to purchase their own TLD and make tweeks to your DNS settings to access their Handshake domain names. And as true to the tune of decentralized and cypherpunk anonymity, the Handshake protocol has “no team” or “There is no official Handshake Foundation or entity.” Ultimately staying true to the ethos of blockchain in the same manner Bitcoin came about.
When analyzing on-chain data, it’s clear that the network is growing in strides based on the total HNS locked in current bids. Through the Handshake block explorer HNScan, by taking the amount of HNS burned and subtracting it from the total HNS locked, the correct amount of HNS locked in bids stands at roughly over $13 million. For comparison’s sake, the Ethereum Naming System (ENS), which only allows users to purchase a domain with the .eth suffix, has supposedly had over 170k ETH spent (much more now) on ENS during its over 3 year existence. But the biggest nuance between Handshake and ENS (or even Namecoin) is that Handshake allows for the purchase of TLDs.
Daily bids seem to be quite erratic with daily bids ranging from over 10,000 one day to just a measly few hundred on other days. But overall the months from April until now have shown more growth than the months before indicating increased community engagement.
The HNS mining pool, 6Block, have been quite instrumental in the recent run up of the hashrate with their Mars H1 coming onto the market last month. One of 6Block’s team members informed me that “The recent HNS hashrate growth is partly beacuse of the Mars H1 miner shipment, but in the meanwhile, there’re also some other ASIC miners emerging in the market, which is also contributing to the network”. And what’s more surprising is that nobody is talking about this. But as recent word on the street of new HNS mining chips being created through Global Foundries and TSMC are starting to unfold, look for the hashrate to naturally rise up even further. Which is ultimately good for the network in attracting new miners to flow in to support this, one of the more truer, dissident blockchain tech protocols. But if HNS price keeps dropping, mining profitability would also just tank as it already has in the past week from around $12.35/day to a current reading of around -$3/day.
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