diff --git a/src/connection.rs b/src/connection.rs
index 4d018da..7014c3d 100644
--- a/src/connection.rs
+++ b/src/connection.rs
@@ -2,20 +2,30 @@ use slog::Logger;
 
 use smol::net::TcpStream;
 
-use crate::error::Result;
+use crate::error::{Error, Result};
 use crate::auth;
 use crate::api;
 
 pub use crate::schema::connection_capnp;
 
+use capnp_rpc::{twoparty, rpc_twoparty_capnp};
+
 use capnp::capability::{Params, Results, Promise, FromServer};
 
 /// Connection context
 struct Connection {
-    stream: TcpStream,
+    log: Logger,
     user: Option<auth::User>,
 }
 
+impl Connection {
+    pub fn new(log: Logger) -> Self {
+        let user = None;
+
+        Self { log, user }
+    }
+}
+
 
 use connection_capnp::bootstrap::*;
 impl connection_capnp::bootstrap::Server for Connection {
@@ -38,13 +48,41 @@ impl connection_capnp::bootstrap::Server for Connection {
         mut res: Results<permissions_results::Owned>
     ) -> Promise<(), capnp::Error> {
         if self.user.is_some() {
-
         }
 
         Promise::ok(())
     }
 }
 
-pub async fn handle_connection(log: Logger, mut stream: TcpStream) -> Result<()> {
-    unimplemented!()
+async fn handshake(log: &Logger, stream: &mut TcpStream) -> Result<()> {
+    if let Some(m) = capnp_futures::serialize::read_message(stream, Default::default()).await? {
+        let greeting = m.get_root::<connection_capnp::greeting::Reader>()?;
+        let major = greeting.get_major();
+        let minor = greeting.get_minor();
+
+        if major != 1 {
+            Err(Error::BadVersion((major, minor)))
+        } else {
+            info!(log, "Handshake successful with peer {} running {}, API {}.{}", 
+                greeting.get_host()?, greeting.get_program()?, major, minor);
+            Ok(())
+        }
+    } else {
+        unimplemented!()
+    }
+}
+
+pub async fn handle_connection(log: Logger, mut stream: TcpStream) -> Result<()> {
+    handshake(&log, &mut stream).await?;
+
+    let mut conn = Connection::new(log);
+    let rpc: connection_capnp::bootstrap::Client = capnp_rpc::new_client(conn);
+
+    let network = twoparty::VatNetwork::new(stream.clone(), stream,
+        rpc_twoparty_capnp::Side::Server, Default::default());
+    let rpc_system = capnp_rpc::RpcSystem::new(Box::new(network), 
+        Some(rpc.client));
+
+    rpc_system.await;
+    Ok(())
 }
diff --git a/src/error.rs b/src/error.rs
index 7c8e537..758260d 100644
--- a/src/error.rs
+++ b/src/error.rs
@@ -23,6 +23,7 @@ pub enum Error {
     FuturesSpawn(futures::SpawnError),
     MQTT(mqtt::Error),
     Config(config::ConfigError),
+    BadVersion((u32,u32)),
 }
 
 impl fmt::Display for Error {
@@ -64,6 +65,9 @@ impl fmt::Display for Error {
             Error::Config(e) => {
                 write!(f, "Failed to parse config: {}", e)
             }
+            Error::BadVersion((major,minor)) => {
+                write!(f, "Peer uses API version {}.{} which is incompatible!", major, minor)
+            }
         }
     }
 }