ENS Domains: What’s So Great About Them Anyway?

ENS Domains: What’s So Great About Them Anyway?

ENS Domains; A Web2 Co-operative Solution to Web3 Interoperability

 

If you are at all involved in the NFT space then surely you’ve heard about ENS domains recently. However, the issuers of ENS domains, Ethereum Name Service (ENS), are true pioneers of the blockchain ecosystem as a whole. Having been launched since May of 2017, ENS has establish itself a foothold as one of the most accredited & reputable organizations in all of web3.

Not only does ENS have the advantage of time & experience on their side, but they’ve also (rather successfully) aspired to be non-competitive with the leading authority of the traditional web2 Domain Naming System (DNS): the Internet Corporation for Assigned Names and Numbers (ICANN). This means that their top-level domain (TLD), “.eth”, will never appear in a global auction because ENS has a direct agreement with ICANN to reserve the .eth TLD for them (sorry about all of the new abbreviations, we are still early. lol). If you’re unsure what a lot of that means, don’t fret. We’ll break it down more thoroughly later on in this article. In the meantime, here’s the short version:

ENS is a web3 organization that offers a domain naming service solution, but also aims to be non-competitive with the top authority of traditional web2 domain naming services through their agreement with iCANN to reserve the .eth TLD in order to create a cooperative, collaborative, & interoperable environment for individuals from within the ENS domains community, as well as those from without it.

The following quote from Nick Johnson aka Nick.eth (ENS founder & lead developer) perfectly embodies ENS Domains core value to remain non-competitive with ICANN:

“So we integrate all of these existing DNS namespaces into ENS because we believe that the best way to build the system of the future is to start by embracing and improving upon the existing naming services.”

 

DNS VS. ENS Domains

Now, you are aware that ENS domains are non-competitive with DNS, but what even is DNS and what does that mean to you? Well, in order to really understand ENS domains you must first need to know their web2 counterpart: DNS, which means “domain naming system”. We take for granted what it does for us these days because we don’t have to remember numbers like 142.250.188.238 in order to get to oogle.com. However, without the existence of DNS, we may have to. There were other protocols developed as solutions before DNS, but DNS is what we have been using since 1983. The previous solutions were not very efficient. For instance, the Advanced Research Projects Agency Network (ARPANET) was established in 1966 and was built to connect research centers across the United States in order to share information faster. ARPANET faced one key problem though: Scalability issues. ARPANET was akin to a digital Yellow Pages and required a ton of manual work in order to keep it organized & operating efficiently.

So, DNS was born from a man named Paul Mockapetris and his desire to answer one not-so-simple question: “how may a structure be developed that would simplify the domain directory / redirect process for all parties involved?” As key components to the solution for this problem Paul suggested that host names should include 2 things:

  1. Name – for example, LoL or League of Legends
  2. Categories/Purpose – for example, “.com – for commercial purposes”.

“After one year, the categories (or Top-Level Domains – TLDs) were created. They included familiar extensions such as .com, .edu, .net, .org, .int, .gov and .mil. Before the end of 1985, there were six new names with .com. The first one ever registered, Symbolics.com, still exists to this day.”

Thus, ENS domains solve for web3 what DNS does for web2 in the sense that they translate addresses like: “0x1D4F3Eb7DcD7eE76F99c67A699de4Da3B764b82D” into something much easier to remember, such as: CRVNE.eth. However, as is the nature of web3 technologies & protocols, it’s also capable of so much more.

 

Why Are ENS Domains Decentralized?

There are many reasons why some may or may not believe decentralization is beneficial, but I will explain a couple of the reasons why it may be viewed as constructive in regards to ENS domains. For starters; the idea of Decentralized Websites. Through the utilization of platforms like the InterPlanetary File  System (IPFS) users may host files in a wholly decentralized & distributed manner. You are likely familiar with this sort of peer-to-peer distribution if you have ever used a torrent file sharing system in the past.

To illustrate, let’s take a look at NewKingJamesVersion.eth or NKJV.eth (You may need to append “.limo” to the end of the URL in order to get certain browsers, like Chrome, to correctly redirect to the content hash. Firefox browsers do this natively). I am hosting the entire New King James Version of the Bible under those domains through the distributed / decentralized content hash of: ipfs://QmRhdyDYJzAkDmSG4GGJnDq6f9AvQvV3Gmc2DjVgSPixuZ. ENS simply redirects a browser to that hash where the files are hosted and that will never change as long as the owner of those domains (me) doesn’t modify their content records. Also, since all ENS does is redirect your address through a process called reverse lookup, you may visit the IPFS content hash directly at any time, for eternity, to access the contents of that page. If you don’t yet fully grasp the concept of IPFS don’t worry about it right now. A full breakdown of IPFS requires a separate article in & of itself. So, be on the lookout for that. Now, whether you are a religious person or not, you can easily see how powerful the implications of this may be. As long as you save that content hash you will always have access to the Bible so long as you have access to the internet. For better or for worse, no authority, government, or entity of any kind will be able to erase history without the possibility of it already being immortalized through IPFS.

Another aspect that may be utilized in regards to decentralization is the decentralized ownership of domains. For instance, without going too deep into cybersquatting laws, I will say that, today, Nike, Inc. could cause you some real trouble if you happened to catch the lease on Nike.com and renew it for yourself when it expires (it has happened with Googles domains before in the past). However, with ENS domains it is possible that a court or judge orders that you are not allowed to use the domain for commercial purposes or even order that you must return it, but you would always have the option of sending Nike.eth to the burn address (the “burn address” is an ETH address that is algorithmically impossible to generate the keys for. In other words: nobody can control access to anything that goes to the burn address). You could then extend the registration indefinitely so that no one could ever use Nike.eth again. It would remain in the dead wallet for as long as you renewed the annual ENS registration fees. That being said, I have heard from Serenae.eth, a very reliable source within the ENS Decentralized Autonomous Organization (DAO), that an ENS Domains team member (Validator.eth) has personally registered & is holding some of the most popular business names for their respective businesses to claim at a time when they are ready.

Conversation between CRVNE.eth & Discord mod, Serenae.eth

 

 

So, those are 2 of the ways that the decentralization of ENS Domains may or may not be deemed beneficial to some individuals and/or organizations, but hold on a moment because there’s even more…

 

ENS Domains for Payment Routing

Payment Routing numbers are nothing new. Every single bank has them & every single bank account has it’s own unique, mind you, very long numbers assigned to them for identification. How long does it take you to memorize your bank account number whenever you get a new one (if ever)? The POTUS recently signed an Executive Order to begin the research for the potential for the use of something that has been coined the Central Bank Digital Currency (CBDC) by

“placing urgency on research and development of a potential United States CBDC, should issuance be deemed in the national interest,”

If currency on blockchain becomes a global standard then ENS Domains provide a solution to something that we do not even currently have for fiat currency. I mean, isn’t BOfA.eth much easier to remember (and type / write) than “121000358” (Bank of America’s routing number for CA, USA)? If it’s necessary to separate account directories by location then it’s as simple as attaching a subdomain such as: “CA.BofA.eth”. Imagine being able to instruct any person or organization to just send your money to “yourname.CA.BofA.eth”. The assumed power is practically overwhelming. (Did anyone catch the subtle Starcraft reference there? No? Ok, sorry. Back to the topic at hand.)

Speaking of subdomains, did anyone else notice that Budweiser, of all companies, purchased Beer.eth, for 30ETH (roughly $95,000USD at the time of purchase) and then changed their Twitter handle to “Beer.eth” for a short time. It makes me wonder if other companies like Heineken or Corona would be willing to pay a premium subscription fee for access to subdomains such as: “heineken.beer.eth” or “corona.beer.eth”.

 

So, Why is Everyone Buying Numbers?!

There could be a lot of reasons why people have been paying as much as $30,000 or more for low-digit number ENS domains such as “123.eth” or “999.eth”. Ultimately, it’s all speculative, but I think one of the big reasons they have garnered so much appeal is the fact that numbers are a universal language. 1 is easier to remember than 11 which is easier to remember than 140, which is easier to remember than 1,084, and so on. This is why low-digit numbers (indefinitely finite) will always be, if nothing else, a huge flex & order of convenience for the holder to themselves, their brand, and/or organization. Can you agree that Michael Jordan would see value in owning “2-3.eth” or “023.eth”? I think he definitely would if Ethereum becomes even half as prevalent as a lot of blockchain enthusiasts believe it will.

Not only that, ENS domains may act as the root for a plethora of different functions such as: webhosting, payment routing, linktrees, decentralized websites, subdomains, DNS solutions, digital messaging, & more. The ultimate potential of ENS domains is only as limited as the ingenuity & innovation that is built on the Ethereum blockchain. So, by already having the support of over 100 blockchains, ENS Domains has solidified their stance as the leading competitor in the web3 space for DNS services. Therefore, easily memorizable numbers, as well as names, will always hold extreme value, as long as $ETH persists. We may look at past sales of 3 & 4 digit .coms for reference. The website, www.3character.com, is designed specifically for the purpose of tracking & logging the sales of domains with 3 characters such as “777.com”or “abc.net”. According to that site, the minimum price for a non-premium, 3-digit .com domains, as of April 2017, is $100,000USD. 

www.3character.com also had this to say in regards to premium pricing speculation:

“The quality of the Number composition can play a significant role in determining 3-number valuations. General consensus states that the numbers 1, 2, 3, 5, 7, 8, 9 are considered premium numbers. Other lesser high quality numbers include: 4 and 6. Lower quality numbers include the number 0.”

This article from GoDaddy claims that “360.com” is valued as the 7th highest domain sale in history at $17million USD and NamePros values random 3-letter (not to be confused w/ 3-digit) .com domain sales at no less than $4k, but upwards of $30,000 a piece.

Some people may wonder how liquid, or rather, illiquid these scarce, low character domains are despite their high price tag, but I personally don’t consider recent volume on ENS domains. I would weigh heavily on overall history because how can one use volume for reference on an 11k supply asset in a naming system that more than 5 billion people use? I just assume the low volume is based on the fact that not many people are willing to sell, but I could be wrong.

Screenshot from price guide on 3character.com

 

 

 

The Catch

Of course, nothing is guaranteed and there are a few things to be wary of in regards to the ENS domains activity wave. First of all; UnstoppableDomains (UD) is also a top competitor in the web3 domain naming system space. UD has a lot of large corporate backing with heavy marketing campaigns & referral rewards. They are integrated with over 200 decentralized applications (dApps) and are also interoperable with many different blockchains. They are ultimately centralized, but you can purchase their domain names with a one-time payment (debit, credit, or crypto) with no renewal fees forever. Plus, you may immediately transfer them to a non-custodial Ethereum wallet of your choice, if you wish, or you may hold & manage them directly through your account on their website (if you’ve been enjoying this article I would greatly appreciate if you’d use one of these links to sign-up if you think you might decide to purchase any domains from UD).

You can see how the UD model greatly contrasts the subscription fees & barriers to entry / adoption of ENS domains. Nevertheless, no one really knows for sure if “.eth” or “.crypto” will reign supreme. Who will become .com & who will take the place of alternatives such as .net, .org, .us, etc? However, ENS Domains ex-Director of Operations, Brantly Millegan was once quoted in a podcast saying that no other web3 domain naming system is recognizing the global namespace besides ENS Domains and that TLDs like .crypto, .wallet, .nft, etc may be at risk of conflicting with ICANN when they are sold at a global auction.

Brantly Millegan – “I hope everyone understands that most of these crypto domain suffixes aren’t recognizing the global namespace and will be given to different people in the future on DNS and ENS. .ETH is already reserved and so won’t be, but everything else — .sol, .crypto, etc — will be.”

Nick Johnson – “…particularly when it comes to things like .crypto, it’s going to be a very popular name for organizations to bid on for the internet — given the rise of cryptocurrency in the time since the last auction, it would now be a hot property. And there’s certainly no certainty that the owner of .crypto in a particular decentralized naming system will end up successfully bidding for the right to it on ICANN options.”

Another big reason why ENS names may not be all they’re cracked up to be is the fact that Ethereum may not become the future of the decentralized internet. The future of the internet may not be decentralized or utilize blockchain very much at all. Again, no one can really say for sure.

 

Wen More?

If you’re not fully convinced by all of the real-world utility that ENS Domains provide, but you are still intrigued then maybe this will sway you one way or another, or maybe not, but through ETHMail.cc you can directly connect your Ethereum wallet and use it just as you would any traditional email. You just use it like you would any other e-mail address. For example, you may email me at crvne.eth@ethmail.cc. Head to their website & give it a try. Quite frankly, ETHMail is just a 3rd-party Ethereum service, but it’s integrated with ENS domains as well as PGP Encryption (the basis of blockchain theory). You just have to sign a gasless transaction for access, meaning you aren’t at risk of giving up any unwarranted wallet permissions and losing your precious NFTs, but for continuity’s sake, always DYOR.

 

Even during the midst of an economic bear market that is potentially on the verge of total collapse ENS domains have managed to persists and, in some cases, even increased in value, to the surprise of many. If you have one or more ENS domains comment below explaining in your own words why ENS Domains is your favorite web3 domain naming solution.

 

If you enjoyed this article be sure to share it on all of your favorite social media platforms & remember to sign-up for the GoodGame DAO newsletter on our homepage so you don’t miss out on more informative articles and/or tutorials, like this one.

 

Happy ENS Hunting GG DAO Family,

-CRVNE.eth

No Comments

Post A Comment