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Blockchain domains and the big challenges they face

It will take a lot to overcome the challenges of previous alt-root naming attempts.

Graphic with white boxes on a black background and the word .blockchain in orange text

Right now, there’s a lot of talk about blockchain-based, decentralized naming systems.

The pitch for blockchain-based domains usually covers two things.

First, these domains can be used as easy-to-remember wallet addresses. Much like how domain names are easier to remember than IP addresses, blockchain domains are easier to remember than a long wallet address. They can also be used as your “web3 username”. This makes sense. But since you probably don’t advertise your wallet address, perhaps we should compare this to someone remembering your email address with a domain name rather than digits.

The other key selling point is that these domains can’t be censored because they are decentralized.

I’m less sold on this pitch for a couple of reasons. First, how many people out there are having their domain names or websites censored? Not that many.

I think we’d see a lot more of these sites on the dark web where they can’t be censored.

Oh, but it’s hard to find sites on the dark web? Well, that’s the main drawback to blockchain-based domains for websites. People have to use special plugins or niche browsers to access them. We’ve seen plenty of alt-root domains come and go, and they’ve all failed not because people don’t like the extensions but because creating a site on a domain few people can access is futile.

There’s a reason things are somewhat centralized. You might not like this, but going the extreme opposite of decentralized has its drawbacks.

A discussion about blockchain domains usually covers three competing standards/companies: Handshake, Unstoppable Domains, and Ethereum Name Service.

Handshake is an interesting play. It’s decentralized at the top level, so some companies and people have created top level domains in Handshake that they offer as second level domains to other people. Which…kind of defeats the point because it’s not decentralized at the second level. Namecheap is selling Handshake domains like .creator, .oo, and .p. You’ll pay around $15-$35/year for these domains. So you are getting a blockchain-based domain that you’ll pay renewal fees on, and hardly anyone can access it. Another challenge is that with so many top level domains, none will gain general recognition and it will be harder for people to recognize them. This has been a problem with the new TLDs that came out nearly a decade ago.

Unstoppable Domains is a venture-backed company with an approach most like previous alt-root players. It has created extensions like .crypto, .wallet and .nft. The biggest issue with this model comes along when the next round of main-root top level domains is launched. You can bet that multiple companies will apply for these popular extensions, thereby creating name collisions. And while Unstoppable thinks it has an approach to win these “real” domains based on trademarks, history tells us this won’t be enough. So unless it comes up with the 9 figures that will probably be necessary to win these domains at ICANN, it’s going to have a bunch of upset customers down the line. (Someone typed in my domain name and went to another website!)

Ethereum Name Service (ENS) is the most interesting to me. The organization created .eth and stopped there. Rather than introducing new extensions, it decided to add functionality to work with existing main-root TLDs. So if I register example.com, I can use this as a wallet address and people can actually visit my website. Sort of the best of both worlds, despite a few technical hiccups. One hiccup is the gas fees required to claim a name or even change your nameserver. Imagine if your registrar charged you every time you switched nameservers! ENS is working on solutions, but it’s just one example of the challenges of operating a decentralized namespace.

One big thing ENS has going for it is name recognition. I’ve started seeing many people in the blockchain space change their Twitter names to example.eth. It’s kind of like the laser eyes of a year ago. It’s this sort of recognition that helped Bored Apes take off. So it’s a nice signal and creates buzz. That is, of course, not enough to ensure its long-term success. But I think, overall, ENS is the most pragmatic of the three options I’ve written about.

I’m sure many people will disagree with this analysis. I welcome your input, especially about how these new naming conventions can overcome their challenges.

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  1. Ed Seaford

    To be fair blockchain domain name technology is still quite nascent, and current utility quite limited, but we are seeing developments that could make them more broadly appealing, such as native integration with browsers such as Chrome (you can see NFT domains already with Opera). Single Sign On is now a feature of unstoppable domains that allows people to share data, such as email addresses, NFTs, and off-chain information, with applications they use, so use cases are increasing. The vision of an individuals domain name holding their off-chain data and be verified and used by on-chain smart contracts opens up a lot of interesting opportunities in how we interact online. Popularity is also growing, I think Unstoppable just clicked over 2M registrations, so while this isn’t an indicator of their long term viability, we are seeing some pretty strong growth and technical enhancements that means we should all pay attention.

    • Ed Seaford

      We are also seeing a crazy amount of cybersquatting. With self-custody web3 domains like Handshake or ENS, there is no dispute process as ownership is absolute and no authority can forcibly make changes to the protocol without forking it into a new protocol entirely. If another party registers the name and is squatting on it for a large sum, there’s no recourse. Research by the Beijing University of Posts and Telecommunications, China found that of the top Alexa brands, over 15,179 ENS .eth names were squatter controlled. For example, the address 0x782cf6b6e735496f7e608489b0c57ee27f407e7d registered google.eth, mcdonalds.eth, redbull.eth, ​​huawei.eth and many other well known brands. It’s the Wild West out there and not much recourse where brands blockchain domains have been squatted. Another feature of the nascent nature of this technology.

      • andrew Charles grey

        That can’t be good. I was thinking if you make money off tips the Dot Com wallet would, or might be handy. But I cant imagine this idea will go down well with any search engine, or company. There may not be any recourse against the individuals buying, but the individuals selling might not be able to avoid some type of recourse.
        Normally there is a Sunrise period for trademark holders, is this not so for web3 ? Please forgive my ignorance, I am looking it up right now, looks as though they do. So I dont think it would be a great idea to sell a distinct brand to squatters after the Sunrise period has ended, surely not.

        • Ed Seaford

          Handshake had a sunrise period, but the problem was that virtually no one knew about it. Participation was very low.

          Both Handshake and Unstoppable reserved the domain names of the top alexa 100,000 websites, so larger brands can claim their domains for a small fee. I have done this for a few of my clients. It’s tricky at first, but worth it.

          • NetOperator Wibby

            I can’t speak for Unstoppable Domains but for Handshake, I’m not sure what fee you’re talking about.

            The reserved Alexa names get a good amount of HNS for claiming (the most popular getting thousands of USD worth of HNS).

  2. Chad folk

    It’s very early and not everyone wants an Internet openly accessible so we are treating these as more intranets that will expand distribution over time. They also play into the dweb narrative that will only grow in the coming years. It also opens up access and creativity to anyone to participate not just the companies with money to afford there own tld. Ens is great and rdao.com was the first .com we know of to accept crypto to the url. Hns did reserve all the ICANN tld’ s and top 100k sites so that will not have name collision but they are really different structures and no one talks about ssl /security and blockchain names. It’s good to have naming options and different stacks along with great .com portfolio.

  3. Ed

    A new project worth mentioning is https://decentraweb.org/ which is a Decentralized DNS project aiming at re-creating the new-gtld programme on a blockchain DNS network. Very ambitious compared to the other projects, but its early so still some good domain names to be had for investors willing to roll the dice. Just a tip if you are interested, use the Polygon network as opossed to the ETH network. You’ll save a small fortune in gas fees.

    • NetOperator Wibby

      DecentraWeb lies about Handshake and is rather disingenuous in their approach.

      I welcome competition but positioning itself as “the answer” to decentralized naming without mentioning how financially prohibitive gas fees are is kinda wack to me.

      Handshake has no “team” unlike DW, it’s by the people for the people.

      • Ed Seaford

        Yes, Handshake is a very strong project in terms of the operation, support and vision. Also, very easy to use. I was playing with Decentraweb and to purchase a $100 domain the ETH gas was $370. Just nuts. Polygon is great but you still get whacked that initial ETH network transfer fee per token, so I see it as price prohibitive for my Clients.

  4. Don

    WOW. ETH names $ 4, 5 and yes 6 figures for just a wallet address waste of $$. More crypto traders made more on this than most domainers made in 15 years.

    Handshake- I will take handshake and own my own extension for much less.
    Opera is taking on handshake names and they will resolve first browser to do so. Hardly anyone is talking about this. All haters. They own about 2% of worldwide market. Firefox will be next as this is only way to compete or gain share to compete with google.

    Unstoppable names- As far as unstoppable names goes the worry about name collision is zero to me. Who is really going to start a new extension and pay for it and try to compete with them and web3. Your talking 5-10 years off. A new extension will old way would be 25 to 50 million. Look what happened to .web still fighting and now no one cares about that extension. Plus unstoppable has first case usage and TM. Who is going to take a chance and fight that. LOL Who is really going to drop 100 million plus to gain rights to use those names.

    Bottom line you will have 8 billion people that will need a wallet address not one but probably 3 or 4. Browsers control everything and Opera is first in the ring. And google is watching this for sure.

  5. Richard

    Handshake has a few resources in play and more on the way.
    From impervious group:
    Desktop – beacon browser (built with chromium), System wide- fingertip.
    Mobile: ios – beacon browser

    Server: hnsd (supports multi sig)
    Handshake can also be run on routers and other small devices.

    There is the Lumeweb browser extensions available for firefox and edge.

    Beacon browser is the worlds first browser to support DANE dns security

    Android – puma browser – uses a gateway no not secure but functional.

    A dns server is also available.

    Handshake only replaces the dns root zone and will work along side .com .org .net but privatized.

    Handshake uses dns and can still use most web 2 resources (if they call it a valid domain and allow it to connect)

    Handshake uses DNSSEC at the tld level allowing trust of tlsa records at the dns level (aka DANE)

    I think web 3 will be the web of phrases and tld’s could simplify search.
    EG: / .vrshooter ..what do you expect would go here vr shooters?
    .contentspecialist for content specialists
    etc.

    These can be used in phrases like worldsfinest.contentspecialist

    sld ‘s are coming on chain very soon.

    Handshake can use standard dns / server
    OR
    Use other blockchains as nameservers making it truly 100% decentralized.

    eg: wealthy.forever is currently using a dns to redirect the Russia banned amnesty international page.

    According to a recent ICANN report Handshake eclipses .eth and unstoppable combined in both registrations and usage.

    Secure shopping centers as VR exclusive. (privatized tld)

    Better corporate security: Own the TLD for your company and all the subdomains can be secured via dane. + ssl.

    Use secure https to dns supported by most browsers and you have an encrypted end to end “trustless” ecosystem.
    Faster and safer.

  6. Richard Parkes

    There is now an easy resource to enable DANE on centralized subdomains. No trust certs no man in the middle attacks. = Less Hackers.

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