Patent application describes a novel way to use domain names as a currency.
So far, we’ve seen some innovation in how new top level domain names are distributed and sold, but not much innovation in how they’re actually used.
Minds + Machines has an idea that certainly seems innovative: using domain names as a currency.
The company filed a patent application on the idea last year, and it was just published by the U.S. Patent and Trademark office this morning. (Read the full application embedded below.)
The idea is that you can buy a domain name from your registrar that has a certain stored value facilitated by the registry. For example, I could go to GoDaddy and request a $500 stored value domain name. The registrar would then issue a domain name, such as USD500-781211.work, which corresponds to that $500.
If someone typed the domain name into their browser, they could verify its value (see image).
You could transfer the value to another person by transferring the domain name much like you transfer one today. You could also redeem it from the central registry, perhaps through your domain name registrar. There could also be a way to “make change” on a transaction by issuing another domain name for the difference.
The patent application notes that the system will work best if there’s some sort of trusted guarantor (such as a government).
The application points out several advantages of DNS over other eCurrencies, including the ability to verify ownership, see the value directly in the domain name, and the ability to lock domain names from transfer.
Just be sure your registrar offers two-factor authentication…
Acro says
What a great way to invite more Chinese hackers to steal domain names!
I see several issues here: the money corresponding to that domain would have to be used all at once. Then the domain would have to be deleted. Would it be picked up by someone else then, who’d use them to claim the balance is still intact as part of a fraud scheme?
Andrew Allemann says
There are certainly challenges, but it’s neat to see someone thinking of something innovative.
If you read the patent, you’ll see that it envisions a way to give change in a transaction by issuing another domain name. If you use a domain name, it wouldn’t be deleted — it would be transferred to the person who bought it. If you redeem it, then the registry would delete it and someone else could buy it for the stored value price.
Alex Tajirian says
M+M may be awarded a patent, but the viability of the idea is, at best, ludicrous. First, active exchange items must be standards ($, barrel of light crude oil, bitcoins, futures, etc.). Unfortunately, domain names are not standard and not easy to determine comparables (similar characteristics and value). Second, risk of new instrument is extremely hard to determine. Thus, you would be exchanging items of unknown real value and risk. So, who bares the risk? Third, how would the investor generate returns? Thus, there can be no viable secondary market.
Andrew Allemann says
I don’t think you understood what the patent describes.
accent says
This is actually the first new idea of the new gTLD era, never mind that it could work on any domain.
Money held in domains can also earn interest, and the value including interest can be displayed in real time on the domain’s webpage. That is an advantage over Bitcoin. I want my cut if they use that idea.
This, and bitcoin are attempts to cut in on the very profitable fiat money game played by governments and bankers called Xerox the money.
Pete says
This innovative idea could well put Bitcoin out of business.
Dan says
It appears you may not yet fully grasp the full potential of Bitcoin technology. There’s so much more to it than its use as a “currency”.
Pete says
I fully grasp the volatility of it’s (Bitcoin) perceived value, whatever it’s purpose of use.
I cannot envisage this volatility of value with Minds and Machines’s proposed trading mechanism.
Ray Kirchner says
What an intriguing idea. I think it’s awesome.
George Minardos says
Freddy’s a genius!