Registering A Domain On The Blockchain: The New Digital Estate Hustle
Is registering domains on the blockchain the new internet domain boom? Apparently, it is, with new numbers coming in from Business Wire, suggesting that Unstoppable Domains is now the most used dapp (decentralized web3 application) on the Ethereum blockchain.
Within 24h since its launch yesterday, more than 30,000 .crypto transactions were processed by the platform which basically offers netizens the ability to register their public cryptocurrency address with a readable easy to remember and share domain name.
In a nutshell, when someone asks for your public address there are a couple of ways you could fulfill their request until recently. A) You open your wallet, copy your public address and paste it to your conversation. B) You send a QR picture that represents your pubic address string to the conversation or you could show the QR directly to the requestee if you’re present under the same physical environment.
Registering a domain with Unstoppable Domains, or the popular Ethereum Name Service (ENS) broker essentially allows you to create a unique URL that represents your ‘0x…’ string, yet it could be as simple as George.eth. Now, how cool is that?
Not only you avoid the struggle associated with opening third party apps and copy/pasting stuff when you’re in a chat app, but it also adds a personalized label associated with each of your wallets.
The Ethereum Domain Name Service EIP
The ENS was initially proposed as an Ethereum Improvement Proposal (EIP) by developer Nick Johnson, who is also the founder and CEO of the ENS service under the ERC-137 standard tracking protocol back in 2016, and it is one of the first Ethereum ERCs that made it to the mainstream.
According to Johnson, the motivation behind EIP #137 was to provide existing specifications and implementations for name resolution in the Ethereum blockchain in order to provide basic functionality, such as:
- A single global namespace for all names with a single ‘centralized’ resolver.
- Limited or no support for delegation and sub-names/sub-domains.
- Only one record type, and no support for associating multiple copies of a record with a domain.
- Due to a single global implementation, no support for multiple different name allocation systems.
- Conflation of responsibilities: Name resolution, registration, and whois information.
The value proposal behind ENS
Similar to traditional internet DNS, the ENS is a redirectory function that will wrap your hexadecimal address into something humanly readable. That fact alone should be more than compensating for Ethereum users, but there is also a hidden investment opportunity that lies behind ENS the majority of the internet community is still not even aware of.
If you recall the early days of the internet, where a guy simply claimed McDonalds.com only to resell it to the official company for over $1mn dollars, you shall instantly get the point, but to break things down in layman’s terms we should analogize the importance of digital presence in 2020.
We live in an era where anything from a donner-shop to an international corporate business pretty much entrust their operations and influence to their internet presence. Sure, a Facebook page and a Twitter account would do for beginners, but if you’re serious about what you’re doing, then undeniably you’d need a personalized domain that reflects your venture’s digital identity.
In mid-2000 and until recently there was a huge boom in domain registries where entrepreneurs would buy dozens of domains names, even those that would be never utilized in an attempt to claim the single-owner addresses that could be later used for a startup or even sold to a business who was looking for that specific DNS name.
Similar to the real-estate business, the domain business soon enough became a standalone market with digital addresses being sold anywhere between several thousand dollars to a couple of millions in some scenarios.
If that doesn’t make any sense to you, I suggest you get a deep dive into one of those YouTube videos that explain why the internet is so important in the digital era.
Rise of the Blockchain-based digital assets
Besides the importance of immutable historical data tracking a distributed ledger network offers, one of the most important things such an archiving architecture enables is the scarcity associated with registered digital assets.
Take for example the ongoing boom in the NFT (non-fungible tokens) scene where digital land parcels in VR environments, virtual art pieces, and even wearables are collected, traded, and sold not for pennies.
In some cases, digital non-monetary assets could be sold for several hundred thousand in terms of US dollars simply due to their scarcity, aesthetic, or a unique utility they offer in the digital realm.
As for ENS, personally, I got my rosspeili.eth domain and while it was easy to claim for less than $5 dollars, some popular domains might be undergoing a dutch bidding process that could lead to surprising pricing depending on the importance a domain possesses for the ones claiming it.
Is it gonna be big? “I am not uncertain”, as Dollar Bill from the show ‘Billions’ would say and I base my speculation on the fact that it is one thing to not being able to claim that George.com domain and instead use a George.net address, and a totally different story when we’re talking about George.eth or 0xFifjf88h9ufjif…bla bla bla.