Handshake deals and free money
Posted on 15 May, 2021
Over the past week or so, there’s been a lot of discussion amongst software developers about Handshake, a combination between a cryptocurrency and a decentralised network to allocate ‘names within zones’, much like Internet domain names1.
In particular, there’s been the realisation that, back in 2019, Handshake provided an initial seeding of their cryptocurrency to anyone with a GitHub account - provided that account has 15 or more followers and a valid SSH or GPG key attached. Two years later, that initial seeding (also known as the Handshake airdrop) is now worth a bit of money - anyone with a qualified account could help themselves to 4.2k HNS2. Those HNS - at least at the beginning of this week - were worth around $4000 AUD ($3000 USD). Free money, for those with the luck of having a qualified account, plus the technical know-how and patience to translate it into a more common currency of their choice.
I’m not going to explain what cryptocurrencies are here, but it’s important to note that many (all?) of the bigger ones (such as Bitcoin, the original and best-known of the bunch) consume enormous amounts of energy as part of processing transactions, and the energy requirements per transaction only grow over time due to how transactions are confirmed. In a time when we’re trying to reduce our global energy consumption, this is pretty horrific. The energy spent on Bitcoin at the moment is larger than many nations.
This is a big part of why I’m especially leery of Bitcoin in particular and cryptocurrencies generally, and I’m far from alone in this.
Handshake’s approach is, it seems, similar to Bitcoin - though they do stress that the energy might be renewable. Not the most convincing argument, especially when the goal should be using less energy, no matter what the source of that energy is.
So, many developers now - including myself! - have ‘free money’, but from a dubious and energy-intensive source. Cue much wringing of hands as we accept this windfall while feeling a little guilty.
To be honest, my issue with all of this isn’t so much the carbon cost of it all (though I don’t like that either). Rather, it’s that this free money has gone to software developers who are very likely to be paid well for their work. Essentially: the cash splash falls along lines of privilege. The rich are getting richer.
And yes, that’s only a rough rule - there are exceptions, particularly any of my industry peers outside of developed/Western nations. Though, the SSH/GPG key requirement might rule out a bunch of less experienced developers. I’m not suggesting everyone else who got these funds shouldn’t have them - but I’m quite sure a significant majority of us are within the wealthiest 1% of the global population.
This all is perhaps a frustratingly accurate model of how our financial systems and economies are broken, and is what I find most annoying about this situation: the ‘free’ money largely reinforces the status quo of the growing wealth gap and its parallels to other common markers of privilege.
With all of this in mind, I have some questions - particularly aimed at those with knowledge of (or operate with) cryptocurrencies:
- Are there any cryptocurrencies out there that are trying to minimise energy use? Ideally, somehow with an increasingly smaller energy cost per transaction over time?
- In Australia, women make 87 cents for every dollar a man makes - in the USA, it’s 82 cents. Then you take race into account: for Black American women, it’s 63 cents. What would these values be for disabled people? Trans people? Are there any cryptocurrencies out there that are focused on improving the financial situation of those so consistently underpaid and undervalued?
- And, thinking of the value of cash injections from governments towards stimulating broader economic activity: Are there any cryptocurrencies which are predominantly used for everyday transactions, rather than currency trading or hoarding of wealth?
If you’re generating wealth, who is it for?
Or, to put this all another way: tech folks, your current ideas around economics and currencies aren’t making the world better, they’re just entrenching existing inequalities. Do better.
And finally, some requests for those who have been on the lucky side of this Handshake windfall: Given it’s tied to your occupation, I’d argue this money counts as income. So, pay the appropriate taxes (and the rent, for those in Narrm/Melbourne). And if you’re in a position to, please consider sending a solid portion of this free money to causes that actually need it. I would recommend Black Rainbow, Human Aid’s Gaza Lifeline, community groups in India, or your local climate change advocacy and action group. Go with what feels right for you.