Hashed People: Handshake Co-founders Andrew and Joseph on the future of authentication and naming

Joseph Poon and Andrew Lee have teamed up to create Handshake, a project that seeks to solve the issue of the blockchain authentication and naming. Both are committed deeply to the industry—Joseph co-wrote the Plasma whitepapers with Vitalik Buterin, while Andrew is the founder of purse.io, the most profitable of the  Bitcoin user cases. In this interview, they explain to us why a secure naming system is crucial to blockchain technology, and their reasons for airdropping 80% of their tokens to open-source developer communities.

Can you briefly introduce yourself, including background, history and what led you to the blockchain industry?

Andrew:

I’m Andrew Lee. I was born in Korea and moved to the US when I was about three years old. I mostly grew up in the East Coast and live in San Francisco now.

I got into payments when I started a payment company similar to Stripe, a merchant processing platform. Around that time, small and medium-sized retail was shifting online, and they had issues accepting credit cards, and I tried to solve it. Around 2011 or 2012, we sold the company, and I began to look at bitcoin. My initial impression of bitcoin was it was too hard to use for regular people.

In 2012, I moved to San Francisco working on payments research as a part of an investment bank. I worked with companies like Google and Apple to learn more about emerging payments. What I learned was that even the largest tech companies, when it comes to payments, were confined. They were making incremental improvements to UX because they couldn’t improve the infrastructure. So I thought the problem with payments was the infrastructure layer.

In 2013, I looked at bitcoin again and found huge improvements. Coinbase and Blockchain.info were starting up. There were SPV wallets in the market and lots of new ideas. The ecosystem improved a lot. Early 2014, I quit Merrill Lynch and started Purse.

As Purse grew, we started thinking about how we can offer to innovate use cases on the marketplace and decided to invest in protocol or infrastructure layer. We started with an idea to build a smart contract library on top of bitcoin, and our CTO JJ ended up rewriting all of bitcoin. We call the full node implementation bcoin, which is not a new coin, it’s more like the Chrome or Internet Explorer. Naver.com renders the same on either browser. Bcoin and Bitcoin Core both fun on the bitcoin network.

Since going live a year and a half ago, Bitpay switched their backend to bcoin, and Bitmain mined using bcoin. Dozens of others startups use bcoin as their backend.

Joseph and I have been talking about new ideas for several years, and a few years ago, we started talking about an idea with Andrew and JJ that became Handshake.

 I worked with companies like Google and Apple to learn more about emerging payments. They were making incremental improvements to UX because they couldn’t improve the infrastructure. So I thought the problem with payments was the infrastructure layer. 

Joseph:

I’m Joseph. My background is actually in finance and accounting. As a consequence, I got a view to reason about mechanism design because, in accounting, you deal with general ledgers and cash flows. And I learned how all the different ledgers interact with each other. It gave me more than an intuitive understating to the blockchain. The blockchain is very interdisciplinary and it gives opportunities for everybody with a lot of different types of backgrounds, not just computer science.

I worked at a big four accounting firm. After I left, I worked in a consulting division. Then, I was unemployed for a little bit, had some fun and participated a lot of bitcoin meetup scenes in the Bay Area around 2013. I heard about bitcoin earlier than that, but I didn’t really take it seriously. Even in 2013, I sort of saw it as a silly thing. Then, I worked at a company called Mirror which had people such as Nick Szabo and Dominic Williams. Then, Thaddeus Dryja and I released the lightning network white paper.

Later I co-founded a startup called Lightning Labs, and most recently, I co-authored the Plasma paper with Vitalik. And it is becoming an emerging collaborative group with a bunch of awesome people.

For a while, within the cryptocurrency space, my principal interest has been scalability. I think a lot of scalability problems are going to be resolved probably in the next year.

Right now, my research area is around coordination mechanisms.

I co-authored the Plasma paper with Vitalik. I think a lot of scalability problems are going to be resolved probably in the next year. Right now, my research area is around coordination mechanisms. 

Plasma Whitepaper

Can you explain the Handshake project?
Joseph:

Normally, people have tight pitches, but I’m not good at doing things like that. It’s interesting a lot of people are trying to resolve the problems around certificate authorities and naming. There are projects such as Namecoin, ENS and blockstack. They all have awesome approaches. The reason why we want to do it is or, to put it indifferently, our goal is to do it right and do it well.

It’s going to become an incredibly important aspect of the blockchain infrastructure. You need long hashes and long keys for payments. It’s very annoying and cumbersome. In order for blockchain to reach mass use, we really need to have human-readable, human-usable and secure naming systems that are native to the blockchain space. That’s why it’s incredibly important to do this right. A bunch of blockchain projects is going to be dependent on this kind of infrastructure.

Secondarily, there is a purpose of demonstrating a new coordination mechanism. This project, on some level, can be interpreted as a performance. Because of that, there are a lot of interesting design decisions and a lot of coordination mechanisms.

There are two different parts. One is a decentralized naming portion and the second one is convincing everybody to adopt or use this blockchain. The real challenge, what we are really after, is getting everybody to use it. The social viability of coordinating all of these different people, convincing the entire world to adopt it. It is a huge part of what this project is about. That is the rationale behind our plans like airdrop and the global distribution.

We are fundamentally designing decentralized systems. This means that we don’t really see ourselves as owners of this project. We see ourselves as the fire starter for this project, lightening the fire to be able to create something persistent. Potentially, the entire world can adopt it. In order to do that, we have to take into account all the various stakeholders all over the world from development to growth. Our entire process and our mechanism are focused around that.

The blockchain is designed to break down this boundary of having centralized institutions. When you have decentralized institutions we start to have questions. For example, what is an employee? Why does someone contribute to a project? We are looking to break down the entire notion of an employee itself; the notion of employee stock options and things of that nature. When you break down those notions, there is a question of equitability, the question of structure, and the question of verifiability. Our entire design decisions are based upon this notion of how you actually develop something, how you actually maintain something, how you develop and grow something when there is no corporation at the center.

There is a foundation in the blockchain, but the foundation doesn’t actually control the system. We are building something which is an exploration on that end. This is why I was saying earlier that this is more similar to projects like wiki’s, flash mobs and others: mass collaborative art processes.

We are fundamentally designing decentralized systems. This means that we don’t really see ourselves as owners of this project. We see ourselves as the fire starter for this project, lightening the fire to be able to create something persistent.

Handshake Twitter Banner

You touched on projects like ENS and Blockstack. And you said people are not using them and you want to do it right. Why do you think this is the case?

Joseph

We have to talk about the nature of what it is that we’re building itself. One aspect is that a lot of those infrastructures are not coordination and are not decentralized mechanisms first and foremost.

I think that the blockchain decentralization is a mean to an end. The end is mass coordination. That’s the end. Society is us all coming to an agreement to live together along some rules to coordinate together and to develop together. Otherwise, life is nasty, brutish and short. When you have that ability to do mass coordination, you can make an effective large-scale change.

I think a lot of the other projects have a different set of goals than we do. Our goal is for the entire world to adopt it. A lot of other projects are about building specific application use cases and platforms. Our goal is explicitly to get this cryptocurrency in the hands of everybody in the world.




Close to 80% of Handshake will be airdropped. Can you share ideas and some design strategies around getting a distribution like that in scale?


Joseph

When you are breaking down the notion of a corporation, you have to look at it in several phases as well. A corporation often times has a phase of development. At that, 80 percent is part of that development phase. Then there’s a second phase whereby if certain targets are met, the community will decide to double the money supply.

And in order to achieve that there are various strategies. One of them can be to collaborate with nonprofits and nonprofits leading the process. Another process can be a core goal distribution in collaboration with other projects that pursue the same goals.

So the project’s goal is to not only be a fire starter for the project but also hopefully to be a fire started for completely shifting the entire ICO ecosystem into something that is globally inclusive and potentially a massive shift in the way we see the world in terms of coordination.

As part of that, it may require collaboration with various other projects that do this.

Going back to why it concerns developers, the reason we’re giving to the open source developers first before the global distribution is that the open source developers are really the ones that created the internet.

They built the internet. They gave their time, opportunity cost, wrote software and gave it away for free.

Handshake compliments that. The airdrop mechanism compliments that by giving them Handshake coins without asking for anything in return.





Which open source communities will you start with? Does the Handshake team have criteria on who gets the airdrops first?

Andrew

We are picking three different channels. And they are all high signal places where open source developers coordinate.

The first one is like PGP web of trust strong set. They tend to be Linux package maintainers. There are about seventy thousand people. The second channel is Freenode on IRC. There are about one hundred thousand monthly active users. This is the area where open source communities collaborate. And the last channel is Github users with open source contributions.




Since we are in Korea, can you common on your thoughts on the Korean market and why it’s important for the Handshake team?

Andrew
Having been involved in bitcoin for many years and being a Korean, I was very interested in getting the Korean community involved in the crypto space early so Korea isn’t the last buyers or late buyers in this ecosystem.

About two years ago, I came into Korea and spoke at a conference. I found that there was lukewarm interest. And last year, things changed. I think there is some kind of education gap or learning gap about what this whole ecosystem’s about. But the interest in the space is pretty overwhelming. And I’m very optimistic. Things will play out well.





Can you introduce the protocol?
Joseph

The way it works is that there is a weekly release of all the names over the span of one year. And the design is that there’s an association between the certificate and the name. This is why we have to do naming in this construction.

Personally, it’d be much easier if we only needed to do certificate verification. But that’s not technically feasible. As a consequence, we need name registration. Once there’s name registration, you assign a certificate which says that “okay, there is an association between this name and this agent.” The purpose of this is that it allows you to have secure verification name system.

This will take a lot of time testing. The community will be testing the security properties and exploring mitigations along various properties.

There is a weekly release. Everybody puts in a bid using the native token. The bids are revealed. And after the reveal process, a winner is selected. The losers get their money back, but the winner gets the name and then the coins get permanently destroyed from the system. So what happens is you’ll see coins possibly ending upon usage.

There’s an annual transaction fee. And that is to ensure you still have access to the key because you don’t want someone losing access to the key. What happens is that if they don’t renew it, it expires and the new auction process potentially opens up.

It will be implemented for both decentralized and centralized apps.

And the blockchain itself is a fork of bcoin. Because it is a fork of bcoin, it is very cleaned up and has features like name registration and the auction, name mechanisms.

It’s GTXO-based proof of work so there will be mining rewards.





Has there been any shortcoming from using Javascript?

Andrew

JJ(Christopher Jeffery, developer of bcoin and CTO of purse.io) loves this question.

Performance-wise, the blockchain doesn’t need to be very fast because everybody computes all the data together. Requiring high performance is a serious security risk and is not one of the strong requirements in the design and architecture.

Joseph

Often times when you see projects claiming incredible performance - I’m not talking about offchain construction - they’re making serious tradeoffs of security and decentralization. And often times they’re an indicator that the project is a scam.

Performance-wise, the blockchain doesn’t need to be very fast because everybody computes all the data together. Requiring high performance is a serious security risk and is not one of the strong requirements in the design and architecture. 

Handshake co-founder Andrew Lee and Joseph Poon

When is the main net launch? Can you share your roadmap?

Andrew

It is ready now. We are getting everything else including legal hurdles and details prepared. I’m thinking maybe a month and a half or two months later.

Joseph

The interesting thing about the roadmap is that we’re designing this as a decentralized system. So everything after launch is up to the community consensus. And we can have a proposed roadmap, but I think even that can create certain types of biases and controls. We don’t want that as the legacy of the system.

What we will have been proposed ideas for possible changes in the future which the community can coalesce on. The things include something similar to the Casper Finality Gadgets or a certain type of scalability mechanisms. A couple of components, for example, can be back boarded into this after the interior side is fully implemented.

Andrew

In the few years, a standard process has emerged for new cryptocurrency projects, and we don’t think it makes any sense. The order of operations is two guys and a dog write a white paper, build a website, conduct a presale, followed by another presale, followed by an ICO. Then maybe they write some code some day.

We’ve kind of turned the order of operations backward. We’ve been working on this project for over a year writing the code first, then we wrote the white paper...


Joseph

The paper’s almost done. There’s just only one sale with accredited investors like Andreessen Horowitz and Hashed, so there’s no ICO or public sale of any kind. After that point, it’s really up to the community.





You’ve raised funding from some of the more established institutions in the world. What was the strategy here and what will you do with the funds raised?


Joseph

First of all, what is the point of raising two hundred million dollars? What do you really get out of it? I don’t understand why projects are raising that much money. I don’t know how they’re going to use that money.

You cannot attract top developers’ talent with money. You have to share values. And you have to share project goals and designs to change the world. That’s the major thing if you want to have effective developers. Instead of raising a bunch of money, we’re just giving the ownership to the developers who should rightfully own this type of infrastructure.

The purpose of bringing in a lot of the top VCs like Hashed is that there’s a strong alignment of incentives. I think open access is very important and there’s a value of democratization, but on the other hand, when you think about the viability of a project, a project is contingent upon alignment of incentives of stakeholders that will benefit you.


Andrew

And we’re not keeping any of the money that we raise from our investors, primarily because the blockchain’s built already. We don’t need to collect the money to develop the blockchain. We’re giving away coins to individuals and organizations that promote a secure and open internet, including open source projects and non-profits. We believe the strategy of giving away value increases the likelihood of success.


Joseph

We’re trying to potentially explore the possibility of a future that’s really beneficial to humanity. This could be a big movement. It’s not just about breaking down the theory of the firm. It’s about where we are headed as people, as a society, globally.

There’s a possibility in the future that people talk about basic income. This is exploration along those lines. And it’s very important for people to explore alternatives because basic income is inherently centralized. I think there is some social risk of that. Perhaps there are other solutions where everybody in the world can benefit while maintaining self-interested incentives.

This project is not communism. This project is predicated on the notion of self-interested incentives. The reason you see top venture capitalists put money into this is that if you give away more value, you get more value. This is the key mechanism that we’re thinking about here. The mechanism is very similar to capitalism which is why this is inherently not similar to core subsystems such as communism.

Six months from now, imagine there’s some niche networking project where you share wifi or something like that. And imagine there are three projects working on it. Assume they’re all technically viable. The one that gives away more value has greater odds of success if they give it away correctly.

That’s the competitive dynamic and the self-interested imperative similar to capitalism. That is the dynamism that has the potential the blockchain can create. That’s what this project is about.

First of all, what is the point of raising two hundred million dollars? What do you really get out of it? I don’t understand why projects are raising that much money. I don’t know how they’re going to use that money. You cannot attract top developers’ talent with money. You have to share values.

CREDITS: Shutterstock Images

It looks like you are building or have built a new blockchain for Handshake. Why do you need to build a new blockchain rather than just using one that is available in the market?

Joseph

We are very good friends with multiple blockchain projects. For example, I’m very close with the Ethereum project. We hope that Ethereum can be cross-compatible when it comes to building things up.

The reason we launched our own blockchain is, principally, because we need to be neutral on a technical level. We think that a lot of blockchain projects will need this technology. And it’s possible for each blockchain project to make its own system. By being neutral, we can be the platform that other people can use. That’s the principal thinking behind it.

And there’s a usability issues. By having a blockchain that’s specifically designed just for naming, we can make it lighter and get security benefit.





How about from an end user perspective. Do I need something like a new browser or a chrome extension?


Andrew

The browser is not the goal. The goal is to get everyone to integrate. We could make a chrome extension. There are other application use cases. When there is a key verification like “yes or no,” it can be made more secure and more useful. Everything in the blockchain space is going to need these usability benefits. It’s not just web browsers but everything on the internet. If we’re rebuilding the web to be decentralized and all of these projects coming up are potential replacements for how we use the web today, there’s a potential to leapfrog these legacy systems. 

This is a question for Joseph.
How do you maintain your older projects like Ethereum network? Are you still involved a and working on Handshake simultaneously?

Joseph

The style of development in this space is very different from corporate development processes. I don’t see myself as a leader for any of those projects, actually. I’m just a contributor like everyone else. On a day to day basis in terms of my personal time, it's doing whatever I’m interested in at the time. If it is plasma, it is.

Karl and I have biweekly phone calls. Still, the community is doing the implementations. And that’s how our development process works. The critical time or commitment is actually fairly low in this space for each individual. That’s the dynamics of this space. You can do a lot of interesting things. That’s how this ecosystem is and evolves.

One thing that I will say right now is, before launch and pre-development, there will be around 25 or more individuals working on the Handshake project.





You are going to airdrop 80% of your tokens to the developers. Why 80%?

Joseph

The 80% airdrop is not much different from Silicon Valley. In Silicon Valley, 80% of a company, when it comes to just startups, goes to the early developers. It’s very similar to that. The difference that we’re doing is that we are doing a gift economy construction, whereby we are giving the value without any expectation of work.

If the community agrees to it, if a certain value is hit, then the money supply will be doubled. And the goal of that doubling is to give it to 7 billion people or everybody on earth.

The 80% airdrop is not much different from Silicon Valley. In Silicon Valley, 80% of a company, when it comes to just startups, goes to the early developers. It’s very similar to that. The difference that we’re doing is that we are doing a gift economy construction, whereby we are giving the value without any expectation of work.

Could you guys share a quick statement to the Korean audience reading this?


Andrew

Blockchain has the potential to disrupt large conglomerates, even within Korea. And there is an opportunity to understand and take leadership in this space because tomorrow will look very different.

I think the goal of everyone we’re working within this space is to have everybody in the world use this technology. And what you are seeing is today, is just a lot of people speculating on exchanges. It’s really important that we start thinking about how you solve real-world problems.