If you have been exploring Handshake, you have probably come across $HNS.
But what exactly is it?
$HNS is the native coin of the Handshake network.
But its role goes much further than simply being a cryptocurrency.
$HNS is part of the mechanism that allows Handshake to allocate names, process transactions and operate without a central registry controlling the system.
Why Does Handshake Need $HNS?
Handshake was created to explore a different way of coordinating names at the root of the Domain Name System.
Today, the traditional DNS root relies on centralised coordination.
Handshake asks a different question:
Could ownership of names at the root be coordinated by a decentralised network instead?
If there is no central organisation deciding who receives a name, the network needs another way for participants to reach agreement.
It also needs to prevent someone from simply claiming every desirable name.
$HNS provides an economic mechanism for doing this.
Instead of asking a central registry for permission to register an available name, participants can use $HNS to compete for names through the Handshake auction system.
$HNS and Handshake Names Are Different
This is an important distinction.
$HNS is the native coin of the network.
A Handshake name is the name you control.
Owning $HNS does not mean you own a Handshake name.
$HNS can be used to participate in the process of acquiring and managing names, while ownership of the name itself is controlled through cryptographic keys.
Two different things working within the same system.
What Is $HNS Used For?
One of the most visible uses of $HNS is Handshake name auctions.
When an available name enters an auction, participants use $HNS to place sealed bids.
Handshake uses a Vickrey style auction.
The highest bidder wins, but generally pays the amount of the second highest bid.
And something important happens to that $HNS.
The winning auction price is burned.
It is permanently removed from circulation.
There isn’t a registry sitting in the middle collecting the purchase price for the name.
$HNS is also used for transactions on the Handshake blockchain, including transactions involved in registering, transferring, updating and renewing names.
What About Proof of Work?
Handshake uses Proof of Work, similar in principle to Bitcoin.
Independent miners contribute computing power to help secure the network, process transactions and build new blocks.
In return for doing that work, miners can receive $HNS through block rewards and transaction fees.
We covered the role of miners in more detail here:
Where Can I Get $HNS?
Where and how $HNS can be obtained can change over time.
Exchanges may add or remove $HNS, trading pairs can change, and different options may be available depending on where you live.
Rather than point you towards one particular service, it is worth doing your own research and checking which current options support $HNS.
If you plan to use $HNS within the Handshake ecosystem, you will also need a compatible Handshake wallet.
As with anything involving cryptocurrency, check carefully before sending funds.
Why Does This Matter?
Put the pieces together and the purpose of $HNS becomes clearer.
Names provide the namespace.
Private keys provide control.
The blockchain records ownership and transactions.
Miners help secure the network.
$HNS provides the economic mechanism that helps those pieces work together.
There is no central registry collecting every registration payment or deciding every allocation.
Instead, the rules are built into the protocol and enforced across a distributed network.
That is what makes $HNS more than simply another cryptocurrency.
It is part of the infrastructure behind Handshake’s experiment in decentralised naming.
Own The Name | Own The Rules | Own The Dot