The flashing, picked up by the camera and likely aliased down, indicates to me it's operating by picking up 50/60Hz mains field from the nearby hand via the tiny mutual capacitance. Kind of like when you touch a microphone input and hear a loud buzz, but operating at a distance due to the very high impedances.
[EDIT] What's really creepy is making a DIY electroscope by putting a JFET in one leg of a resistor bridge, with the opposite resistor variable for null, and a small meter across the bridge, powering the whole thing with 9V or so. Let the JFET gate float and connect it to a small antenna. Re-positioning it vertically will show higher potentials at higher heights. You can directly see the Earth's voltage gradient over a couple of inches with this crude setup.