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Great question. All Handshake names are registered with HNS through the auction process. Say you bid 1000 HNS on a name and I bid 900 HNS. You'd win that name and pay 900 HNS (the second highest bid price. Importantly, that fee doesn't go to Namebase or any other entity — the coins are burned on-chain so they go to no one.

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uhhh, so I'm looking on the website right now, and it wants a scan of my passport or photo ID for the privilege of buying a virtual cryptocoin, that can be used for purchasing domain names almost nobody can currently resolve, which vanishes into thin air after the purchase? am I getting that right?

"Purchasing HNS with USD is currently limited to those with a US passport or ID."

Namebase is a service built on top of Handshake similar to how Coinbase builds on top of Bitcoin. It's an incorporated company that has to follow normal AML/KYC laws like other onramps. You don't have to go through Namebase to get HNS. Also, you can buy HNS with BTC without KYCing on Namebase. You can't sell or transfer the HNS without KYCing but you can still register names and transfer the names to other wallets without providing any passport info.

Can you explain how that works?

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