diff --git a/net/handshake/Makefile b/net/handshake/Makefile
new file mode 100644
index 00000000000..4530e364432
--- /dev/null
+++ b/net/handshake/Makefile
@@ -0,0 +1,8 @@
+
+all: semver.pb.go
+
+semver.pb.go: semver.proto
+	protoc --gogo_out=. --proto_path=../../../../../:/usr/local/opt/protobuf/include:. $<
+
+clean:
+	rm semver.pb.go
diff --git a/net/handshake/semver.pb.go b/net/handshake/semver.pb.go
new file mode 100644
index 00000000000..e1a5fb5d903
--- /dev/null
+++ b/net/handshake/semver.pb.go
@@ -0,0 +1,51 @@
+// Code generated by protoc-gen-gogo.
+// source: semver.proto
+// DO NOT EDIT!
+
+/*
+Package handshake is a generated protocol buffer package.
+
+It is generated from these files:
+	semver.proto
+
+It has these top-level messages:
+	Handshake1
+*/
+package handshake
+
+import proto "github.com/jbenet/go-ipfs/Godeps/_workspace/src/code.google.com/p/gogoprotobuf/proto"
+import math "math"
+
+// Reference imports to suppress errors if they are not otherwise used.
+var _ = proto.Marshal
+var _ = math.Inf
+
+type Handshake1 struct {
+	// protocolVersion determines compatibility between peers
+	ProtocolVersion *string `protobuf:"bytes,1,opt,name=protocolVersion" json:"protocolVersion,omitempty"`
+	// agentVersion is like a UserAgent string in browsers, or client version in bittorrent
+	// includes the client name and client. e.g.   "go-ipfs/0.1.0"
+	AgentVersion     *string `protobuf:"bytes,2,opt,name=agentVersion" json:"agentVersion,omitempty"`
+	XXX_unrecognized []byte  `json:"-"`
+}
+
+func (m *Handshake1) Reset()         { *m = Handshake1{} }
+func (m *Handshake1) String() string { return proto.CompactTextString(m) }
+func (*Handshake1) ProtoMessage()    {}
+
+func (m *Handshake1) GetProtocolVersion() string {
+	if m != nil && m.ProtocolVersion != nil {
+		return *m.ProtocolVersion
+	}
+	return ""
+}
+
+func (m *Handshake1) GetAgentVersion() string {
+	if m != nil && m.AgentVersion != nil {
+		return *m.AgentVersion
+	}
+	return ""
+}
+
+func init() {
+}
diff --git a/net/handshake/semver.proto b/net/handshake/semver.proto
new file mode 100644
index 00000000000..5c6ac2b91b7
--- /dev/null
+++ b/net/handshake/semver.proto
@@ -0,0 +1,12 @@
+package handshake;
+
+message Handshake1 {
+    // protocolVersion determines compatibility between peers
+    optional string protocolVersion = 1; // semver
+
+    // agentVersion is like a UserAgent string in browsers, or client version in bittorrent
+    // includes the client name and client. e.g.   "go-ipfs/0.1.0"
+    optional string agentVersion = 2; // semver
+
+    // we'll have more fields here later.
+}
diff --git a/net/handshake/version.go b/net/handshake/version.go
new file mode 100644
index 00000000000..34152206243
--- /dev/null
+++ b/net/handshake/version.go
@@ -0,0 +1,56 @@
+package handshake
+
+import (
+	"errors"
+	"fmt"
+
+	updates "github.com/jbenet/go-ipfs/updates"
+
+	semver "github.com/jbenet/go-ipfs/Godeps/_workspace/src/github.com/coreos/go-semver/semver"
+)
+
+// currentVersion holds the current protocol version for a client running this code
+var currentVersion *semver.Version
+
+func init() {
+	var err error
+	currentVersion, err = semver.NewVersion("0.0.1")
+	if err != nil {
+		panic(fmt.Errorf("invalid protocol version: %v", err))
+	}
+}
+
+// CurrentHandshake returns the current protocol version as a protobuf message
+func CurrentHandshake() *Handshake1 {
+	return NewHandshake1(currentVersion.String(), "go-ipfs/"+updates.Version)
+}
+
+// ErrVersionMismatch is returned when two clients don't share a protocol version
+var ErrVersionMismatch = errors.New("protocol missmatch")
+
+// Compatible checks wether two versions are compatible
+// returns nil if they are fine
+func Compatible(handshakeA, handshakeB *Handshake1) error {
+	a, err := semver.NewVersion(*handshakeA.ProtocolVersion)
+	if err != nil {
+		return err
+	}
+	b, err := semver.NewVersion(*handshakeB.ProtocolVersion)
+	if err != nil {
+		return err
+	}
+
+	if a.Major != b.Major {
+		return ErrVersionMismatch
+	}
+
+	return nil
+}
+
+// NewHandshake1 creates a new Handshake1 from the two strings
+func NewHandshake1(protoVer, agentVer string) *Handshake1 {
+	return &Handshake1{
+		ProtocolVersion: &protoVer,
+		AgentVersion:    &agentVer,
+	}
+}
diff --git a/net/handshake/version_test.go b/net/handshake/version_test.go
new file mode 100644
index 00000000000..de761a7a56e
--- /dev/null
+++ b/net/handshake/version_test.go
@@ -0,0 +1,23 @@
+package handshake
+
+import "testing"
+
+func TestCompatible(t *testing.T) {
+	tcases := []struct {
+		a, b     string
+		expected error
+	}{
+		{"0.0.0", "0.0.0", nil},
+		{"1.0.0", "1.1.0", nil},
+		{"1.0.0", "1.0.1", nil},
+		{"0.0.0", "1.0.0", ErrVersionMismatch},
+		{"1.0.0", "0.0.0", ErrVersionMismatch},
+	}
+
+	for i, tcase := range tcases {
+
+		if Compatible(NewHandshake1(tcase.a, ""), NewHandshake1(tcase.b, "")) != tcase.expected {
+			t.Fatalf("case[%d] failed", i)
+		}
+	}
+}
diff --git a/net/swarm/conn.go b/net/swarm/conn.go
index 7d5c47b5c9f..5aa5a304e2d 100644
--- a/net/swarm/conn.go
+++ b/net/swarm/conn.go
@@ -6,8 +6,10 @@ import (
 
 	spipe "github.com/jbenet/go-ipfs/crypto/spipe"
 	conn "github.com/jbenet/go-ipfs/net/conn"
+	handshake "github.com/jbenet/go-ipfs/net/handshake"
 	msg "github.com/jbenet/go-ipfs/net/message"
 
+	proto "github.com/jbenet/go-ipfs/Godeps/_workspace/src/code.google.com/p/goprotobuf/proto"
 	ma "github.com/jbenet/go-ipfs/Godeps/_workspace/src/github.com/jbenet/go-multiaddr"
 	manet "github.com/jbenet/go-ipfs/Godeps/_workspace/src/github.com/jbenet/go-multiaddr/net"
 )
@@ -109,6 +111,10 @@ func (s *Swarm) connSetup(c *conn.Conn) error {
 	// add address of connection to Peer. Maybe it should happen in connSecure.
 	c.Peer.AddAddress(c.Addr)
 
+	if err := s.connVersionExchange(c); err != nil {
+		return fmt.Errorf("Conn version exchange error: %v", err)
+	}
+
 	// add to conns
 	s.connsLock.Lock()
 	if _, ok := s.conns[c.Peer.Key()]; ok {
@@ -152,6 +158,53 @@ func (s *Swarm) connSecure(c *conn.Conn) error {
 	return nil
 }
 
+// connVersionExchange exchanges local and remote versions and compares them
+// closes remote and returns an error in case of major difference
+func (s *Swarm) connVersionExchange(remote *conn.Conn) error {
+	var remoteHandshake, localHandshake *handshake.Handshake1
+	localHandshake = handshake.CurrentHandshake()
+
+	myVerBytes, err := proto.Marshal(localHandshake)
+	if err != nil {
+		return err
+	}
+
+	remote.Secure.Out <- myVerBytes
+
+	log.Debug("Send my version(%s) [to = %s]", localHandshake, remote.Peer)
+
+	select {
+	case <-s.ctx.Done():
+		return s.ctx.Err()
+
+	case <-remote.Closed:
+		return errors.New("remote closed connection during version exchange")
+
+	case data, ok := <-remote.Secure.In:
+		if !ok {
+			return fmt.Errorf("Error retrieving from conn: %v", remote.Peer)
+		}
+
+		remoteHandshake = new(handshake.Handshake1)
+		err = proto.Unmarshal(data, remoteHandshake)
+		if err != nil {
+			s.Close()
+			return fmt.Errorf("connSetup: could not decode remote version: %q", err)
+		}
+
+		log.Debug("Received remote version(%s) [from = %s]", remoteHandshake, remote.Peer)
+	}
+
+	if err := handshake.Compatible(localHandshake, remoteHandshake); err != nil {
+		log.Info("%s (%s) incompatible version with %s (%s)", s.local, localHandshake, remote.Peer, remoteHandshake)
+		remote.Close()
+		return err
+	}
+
+	log.Debug("[peer: %s] Version compatible", remote.Peer)
+	return nil
+}
+
 // Handles the unwrapping + sending of messages to the right connection.
 func (s *Swarm) fanOut() {
 	for {