INTERNET NAME TRANSFERS USING COINS TO PREVENT SYBIL ATTACKS

Handshake is a piece of software (and a loose consensus on agreement of the software itself). This software's primary function is for people to come to agreement on names and cryptographic keys authorized to represent that names in a decentralized way. To do this in a decentralized way, we need to prevent a single party from claiming all the names. Therefore, a unit of account is needed to prevent that single party from claiming all names.

Handshake uses a coin system for name registration. The Handshake coin (HNS) is the mechanism by which participants transfer, register, and update internet names. The community will be able to initiate auctions and place bids for top-level domains using HNS or trade their HNS as they see fit, with differing value per name.

Therefore, Handshake allocates the majority of its initial coins towards the FOSS community with absolutely no obligation attached, as it is this community most relevant with decentralized software and tools. The goal of the initial design was to account for all possible stakeholders. More info.

Handshake's incentive design assumptions relies upon Metcalfe's Law (Beckstrom's Law, etc.). While Bitcoin's value is derived from it being a costly store of value, Handshake's value is derived from its network of users. Metcalfe's Law asserts that an increase in userbase increases the value of the network (sub)exponentially. This means that allocation of value to potential developers and users of this system be a benefit to everyone, with network effect derived benefiting all users.