What Is a Web3 Domain?
To understand Crypto or Web3 Domain Names, let establish the features of a domain name.
Domain names are the record that can convert a natural language string of words to an IP or record locator address. In the traditional domain name system, this “ledger” is kept on 13 servers around the world monitored by a global governance group, and the countries that each manage their own namespaces.
These names are interoperable globally with the existing routers, browsers, apps, and websites.
In the Web3 domain name system, the list and record request, and verifications are managed on one of a group of decentralized blockchains. A series of rules and contracts, without a central authority, govern the space. Private companies play the role to commercialize and manage relations with the blockchain.
Right now these Web3 domain names are interoperable with a small subset of browsers, apps and websites. They do work on many applications not part of the traditional domain space.
So Web3 Domain Names are the intersection of the Domain Name world and the Crypto worlds.
Domains have been around for over 30 years. Last decade however saw the birth of crypto, NTFs, virtual wallets and all that led to a significant change in the way we think of and operate with domain names.
The domains’ market is now the platform not only for gaining and establishing virtual presence but also for investments with all the peripheral that’s linked to it including the creation of a crypto niche.
When Bitcoin was first released in 2009, more than a decade ago, it instantly showed potential as a decentralized form of currency. With it consumers could make peer-to-peer transactions on the Blockchain without the need of a bank or a centralized financial operator.
But if you’ve been struggling to send money and remembering complex crypto wallet addresses, you aren’t alone. That’s where Web3 domains come in hand.
This article is all about getting into the details of Web3 domains, what they are, how they help users, and what are the major players in Web3 /crypto domains.
What Are Web3 Domains?
There are a couple of roadblocks that are preventing crypto from going mainstream. While cryptocurrency is a great innovation, it’s also a complicated one, putting a huge barrier up for all beginners looking to get into the industry.
If you ask first-time crypto users, one of the reasons crypto isn’t accessible to them is the concept of wallet names. While crypto allows people to send money to each other through a decentralized network, you need to send funds to complex wallet names that are hard to remember.
But that’s where Web3 domains come in. Just like how the classic DNS system completely changed the way people use the internet, Web3 domains make it much easier for people to send and receive money from other users.
However, for some people, understanding Web3 domains can be just as hard as understanding crypto itself.
Later in this article, we’ll be getting into the fine details of Web3 domains, how they work, and why you might need them, so stick around.
But first, we need to take a look at the internet’s original domain name system.
The Beauty of DNS
Just like cryptocurrency, when the internet first launched, there was a lot of hype and excitement over how it can and would change the world. However, there were major barriers that made it hard if not impossible for some people to surf the web.
In the beginning, all websites used IP addresses. For example, Facebook’s IP address is 126.96.36.199. And during the beginning of the internet, the only way you browse and get on these websites is by typing in the IP address.
As you can tell, IP addresses are long and complicated. On top of that, humans have a much easier time remembering a combination of letters than numbers. So, browsing the internet and hopping on different websites was a bit more complicated back in the day.
But then, DNS was introduced.
DNS, or the domain name system, is the system we use to browse the internet today. This system makes use of specific domains (facebook.com, google.com, yahoo.com) in place of IP addresses. This makes it much easier to browse the web as all users have to remember is a phrase or word that they can type into their browsers.
Domains are unique, and only one website can own a specific domain at a time. That is why there was also a huge potential for earning money back in the early days of DNS.
Since only one person could own a domain at a time, there were many people who scrambled to register valuable domains or domains that would eventually rise in value. That way, once the value rose, the person would sell the domain for a much higher price, making significant profits.
You can learn more about domain trading on the Cloudname website. There, you can also buy, rent, and sell domains – allowing you to make money from domain trading without having the need to use any other website.
And while domains are a very useful innovation, there is still one organization running everything in the background. While this is necessary, it does come with some drawbacks. So, in the next section, we’ll be talking about ICANN.
How ICANN Gets in the Way
ICANN, or the Internet Corporation for Assigned Names and Numbers is a non-profit organization behind the scenes making sure domain names work. While you have probably never heard of this company, they play an incredibly pivotal background role in how the modern world works.
This organization works out of California and is responsible for running the entire DNS. So, whenever a person registers a website or buys a domain from another seller, the transaction runs through ICANN.
In fact, ICANN holds so much power that it can even authorize other websites to serve as domain registrars wherein people can also register their domains. Examples of these websites are GoDaddy and Domain.com, just to name a few.
And while ICANN plays such an essential role in running the DNS, the problem is that this is the only organization involved in running the DNS. So, this brings about a word that many people on the internet dread: centralization.
There’s nothing wrong with ICANN playing a pivotal role in running the DNS. However, problems arise because this is the only company that runs the DNS. That means there’s one single entry point for people looking to register domains.
This makes for a huge blow to net neutrality right out of the gate, putting an immediate obstacle that prevents a fair and free market.
On top of that, this gives anyone who wants to attack or threaten the internet a clear target. And since ICANN operates in the US, it also poses security risks as it gives them access to moguls like Mark Zuckerberg, who is known for violating user privacy.
So, as much as the DNS helps our lives, the aspect of centralization makes it a very slippery slope. ICANN is vulnerable to outside manipulation, cyber attacks, and puts a huge question mark regarding net neutrality.
But is there a way to use the DNS without centralization?
Well, there is, and you currently see it in practice if you look at innovations on the blockchain.
Blockchain Domains: The Start of a New Era
As mentioned earlier, cryptocurrency is a great innovation. It’s inherently decentralized, which means it’s less susceptible to attacks and abuse. And because of this, even new innovations within crypto such as blockchain domains are decentralized.
The biggest benefit of blockchain domains is one that it shares with the DNS: convenience. With blockchain domains, you no longer need to copy long and complex crypto wallet IDs when sending funds to another account. Instead, all you have to do is type in a catchy domain such as “bills.crypto” and it will send the funds to the domain.
WithWeb3 domains, the names are tied to specific wallets that are stored on the blockchain, where it is secure as ever. And to enhance security, the keys to these domains are stored within the wallets as an NFT.
Additionally, using a blockchain domain frees you from centralization. That way, you don’t have to deal with censorship, giving you full autonomy over the content of your website.
With that said, this freedom is a double-edged sword. While people living in authoritarian states will greatly benefit from this freedom of speech, the same applies to people and groups looking to promote hate speech.
Before you go ahead and invest in a blockchain domain, it’s important to remember that it’s not 100% secure. Just like any other technology, there is a risk of hacking the blockchain.
However, the blockchain is massive and incredibly secure. So, while it is possible, hacking the blockchain is much harder to do than hacking other pieces of software.
Blockchain domains are a fairly recent innovation, however, just like the technology upon which it rests, it has the potential to completely change the game.
Big Players in the World of Blockchain Domains
While blockchain domains are decentralized, you still need service providers to provide you with these domains. These providers make it much easier for people to get their own blockchain domain and enjoy the benefits of not having to use their complex crypto wallet address all the time.
Here are some of the forerunners in the world of blockchain domain naming;
Ethereum Name Service (Eth)
As you might guess if you’re into the world of crypto, Ethereum is leading the way for other currencies to further the technology. The ENS is a completely non-profit service that aims to decentralize the DNS, allowing people to obtain domains without the need for ICANN.
This is possible by building their entire service on the Ethereum blockchain. So, you will register a “.eth” web address. For example, your domain could be “crytpo.eth”.
Whenever someone registers a domain with this service, they mint an ERC-721 NFT token. With that said, the ENS doesn’t aim to completely replace the DNS. Instead, they are there to offer a viable alternative and take some of the power away from ICANN.
There is a yearly registration fee that customers have to pay when using the ENS.
This is one of the first types of Web3 domain service providers that hit the market. They aimed to allow miners who were already mining Bitcoin to also mine Namecoin through merged mining. Namecoin operates primarily on two technologies: NameID and Dot-Bit-DNS.
NameID registers a name with an authentication protocol known as OpenID. This is similar to how you can “log in with Google” on certain websites. However, it is much less invasive. On the flip side, the Dot-Bit DNS is like a phonebook for internet domains.
The benefit of Namecoin is that they cannot ask you to take down a website you registered with their service, unlike if you registered through the ICANN DNS.
Unstoppable Domains (Ziliqa)
Unstoppable Domains is another player that owns a fair share of the game right now. These are the providers known for the “.zil” and “.crypto” domains, which are some of the most widely used right now.
The founders of Unstoppable Domains notice a sense of tribalism in the crypto community that is keeping people from adopting the technology. Their system aims to allow you to send and receive a wide variety of cryptocurrencies to any wallet.
On top of that, the founders aim to simplify, if not eliminate the wallet address system as a whole. Copying and pasting long and complex addresses to send funds isn’t just difficult, it also opens up room for mistakes that can cost people their coins.
One of the biggest benefits of Unstoppable Domains is that they offer a one-time payment. So, once you pay and register your domain, it is yours. You don’t have to worry about renewal fees or annual registration fees.
This is very different from ENS, and is one of the major reasons Unstoppable Domains is comfortable as one of the top providers on the market.
Additionally, these are very accessible domains. One of the advantages of these domains is that they are now available on just about any web browser in the world. All people have to do to access it is updating their browser’s DNS settings.
Unstoppable Domain recently moved its operations to the Polygon network. The biggest advantage of this is that the Polygon network is that most of the fees will be removed. That way, it’s much easier for people to register their own Web3 domains.
There is no doubt that we are still in the very early days of cryptocurrencies. And as a result of that, we get to see all these new innovations that have the potential to change the world as we know it.
And one of these innovations is Web3 domains. These domains make it easier for coin owners to transfer funds, but it also allows more people into the world of crypto as it makes everything a lot simpler.
So, if you’re new to the world of crypto and Web3 domains, keep your eyes peeled as it is the next big thing.
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