All crypto-related terms, including bitcoin, NFTs, NFT domains, virtual assets, Web 3.0, and smart contracts, have become common discussion topics over the past few years.
Businesses worldwide are increasingly applying blockchain technology to make their operations fast, efficient, and transparent. However, the complicated nature of its usability has prevented its mainstream adoption.
At the same time, all virtual assets can see an uptick in their values when linked with blockchain domains. In fact, these crypto domains are one of the most important innovations in this area. They make things easier for crypto users, which explains their immense popularity.
Blockchain domains providers like ENS Domains, Unstoppable Domains, and Quik allows users to record NFT domains permanently in a public registry. These are new asset classes that offer buyers 100% ownership, similar to how you own your cryptocurrencies with private keys.
The Rise of Blockchain Technology
Fintech companies have been gradually disrupting the traditional banking and financial services industry since 2008. But, the advancements in cryptocurrency, NFTs, and blockchain technology brought a whole new wave of innovations.
Bitcoin demonstrated its applications in the FSI when it raised above the 30k USD mark. Today, most entrepreneurs believe that blockchain technology, a virtual ledger capable of recording and verifying high digital transactions volume, is here to stay.
According to a recent Deloitte survey (1), over 86% of senior executives consider blockchain technology to achieve a mass mainstream adoption soon.
Last year, the funding in blockchain startups witnessed a 713% YoY surge, reaching over 25.2 billion USD (2).
Although the crypto space is quite volatile with frequent ups and downs, blockchain technology offers new means of monetizing IP and digital assets and verifying the authenticity of these assets on the internet.
The various use cases it offers translate that the future of crypto and blockchain technology is near, and banking is not the only industry it will impact. From insurance to gaming to cannabis, blockchain technology has the potential to disrupt several industries.
The applications for a verifiable and transparent register of transaction data are practically endless (3). It can also transform the internet, enabling the shift from Web 2.0 to Web 3.0.
“Web 3.0 refers to decentralized apps that run on the blockchain. These apps allow anyone to participate without monetizing their data,” said Ethereum.org (4).
Several Web 3.0 infrastructure protocols exist like Arweave, Filecoin, and IPFS to power the self-sovereign internet and enable users greater control over their data.
NFT domains are the key innovation to improve web access for everyone – a decentralized internet. Blockchain enthusiasts are hailing the lack of central entities on the internet as a new chapter of user empowerment and freedom. And crypto domains are the gateway to this improved and accessible web.
These domains run on a blockchain network – hence also referred to as blockchain domains, provided by players like Quik, Unstoppable Domains, ENS Domains, and others.
In addition, the arrival of metaverse has increased the significance of blockchain technology and NFT domains multi-folds.
DNS on Blockchain
The Domain Name System or DNS is a service at the core of the internet’s operation, including websites, mail servers, VoIP, etc.
Over the past decades, many functionalities and extensions were added, which increased the infrastructure’s complexity.
Blockchain technology could be the next big thing for DNS, bringing new functionalities with added advantages (5).
The DNS system functions as a public directory that associates domains with resources on the internet like IP addresses. When a user enters a web address in his browser, a DNS server translates it into an IP address; this process is called DNS resolution.
The system, built-in 1983, is fundamental to the internet and must guarantee:
- Availability
- Integrity
- Confidentiality
It is based on a centralized trust model, distributed worldwide and hierarchically managed by different entities. The root level, the first level of registries, manages extensions, and registrars manage the second level. The internet’s regulatory authority, ICANN, orchestrates the whole thing.
A blockchain is a data structure with open access. Instead of being controlled by a central entity, it is distributed over a decentralized network. It means that the data is replicated on each node, and everyone on the network can read its contents and add data.
The concept was first implemented back in 2009 with Bitcoin. However, it has evolved into several blockchain technologies, each with its unique properties.
When the data is entered on a blockchain via transactions, these transactions are grouped into blocks, validated by the network individually, and then brought together. It means a blockchain contains the history of all the transactions since it was built.
The blockchain protocol contains all the validation rules that each network member respects. These protocols are based on consensus algorithms like Proof of Work (PoW) and Proof of Stake (PoS) to ensure compliance with its rules. These algorithms guarantee the security, immutability, and integrity of the data on the blockchain.
In other words, blockchain technology meets all three DNS needs.
A P2P, decentralized network can’t be stopped but could replace or complement anycast infrastructure. The consensus protocol of the blockchain also guarantees data integrity. In addition, the data cannot be modified, which eliminates the need for DNSSEC and periodic renewals.
We can encapsulate requests made to read data on the blockchain in an HTTPS channel similar to the DoH, DNS over HTTPS, protocol. Since there are only limited DoH resolvers today, the overall traffic is centralized around limited players. The use of blockchain would limit centralization and SPF, a single point of failure since it has the possibility of querying any node on the network.
In other words, we can distribute the data in the DNS zone files, the domain name configuration onto a blockchain. Each player, registrars, and registries could directly interact with the blockchain for management. It is the basic concept behind NFT domains.
Meeting New Needs with NFT Domains
The emergence of blockchain technologies has led to the rise of new value exchanges, especially with tokenization, crypto assets, dApps, Web 3.0, or the internet of tomorrow (6).
These decentralized apps and digital wallets work with alphanumeric identifiers that are lengthy and complicated to read, e.g., 0Y594acc38dbcd8g94mn5ba1380d8db39a98t44892 for a wallet address.
However, similar to how domain names revolutionized the internet by replacing IP addresses, associating crypto addresses with domain names could also disrupt the crypto industry.
Consequently, we have several naming system projects on blockchain today, each with its own implementation. It includes:
- ENS Domains
- Quik
- Namecoin
- Unstoppable Domains
Some applications offer new domain names extensions, TLDs like .blockchain, .chain, .crypto, .metaverse, etc. It is particularly the case for Unstoppable Domains, Quik, and Namecoin.
These systems are completely independent of ICANN and traditional DNS. Users can directly manage registration and make name resolutions via a browser extension.
Other projects like Ethereum Name Service, ENS Domains offer complementary solutions to DNS. The ENS offers a naming system on blockchain that integrates with the traditional DNS
For instance, if you are the holder of a domain name and can prove it via a DNSSEC registration, you can register the same name on the blockchain service. It allows you to take advantage of both traditional and blockchain DNS.
More About NFT Domains
Crypto domains are suites of smart contracts coded on a public blockchain.
At first, blockchain domains may resemble traditional domains, but a closer assessment would reveal that they are superior. Unlike traditional domain names, which are references to IP addresses, NFT domains are customizable computer programs (7).
For instance, you can code blockchain domains as a reference to your digital wallet address and use them to direct your audience to blockchain content. It includes websites and DApps, decentralized apps with wide-ranging applications like gaming, chat, social media, marketplaces, and exchanges.
Thanks to the underlying blockchain technology, once you acquire a crypto domain, it is permanently affixed to a blockchain network. It cannot be controlled or changed by any third party like ICANN.
At the same time, it is important to note that not all NFT domains are available from the same issuer.
For example, .sol and .eth extensions are available on blockchain networks Solana and Ethereum, respectively, and issued by different companies. On the other hand, even though .nft and .crypto are both available on Ethereum, they can’t be minted from the same company that issues .eth.
Features of crypto domains can also differ based on underlying smart contracts the issuer that mints the blockchain domain code.
Unstoppable Domains
Unstoppable domains have gained immense popularity in the crypto community with their innovative crypto name service (CNS) instead of the traditional DNS (8).
Unstoppable domains were first launched in 2018 to send or receive various cryptocurrencies using human-friendly addresses instead of lengthy crypto wallet addresses. However, today, it is a common practice to host normal websites and dapps on top of it.
The major advantages of Unstoppable Domain include:
- One-time registration
- Superior security
- Easier crypto transactions
- Censorship-resistant
- Support for DApps
There are some significant downsides too.
- Unstoppable domains are still recognized as things related to cryptocurrency. However, it may change soon.
- The web hosting solutions that use IPFS, Interplanetary File System, are limited and still in the early stages.
You can mint Unstoppable Domains on Ethereum, Polygon, or Solana blockchain.
Top TLDs available on Unstoppable Domains:
- .crypto
- .zil
- .nft
- .bitcoin
- .x
- .wallet
- .dao
- .888
- .coin
ENS Domains
The Ethereum Naming Service aims to map machine-readable identifiers like Ethereum addresses and IPFS content hashes to human-readable hashes to human-readable names. These ENS domains are built on top of Ethereum blockchains and compliant with ERC-721 (9).
Since ENS domains are also built on Ethereum’s smart contracts, they are also secure, private, and resistant to censorship, unlike traditional DNS.
ENS works similarly to the DNS, with a hierarchical architecture that gives the ENS domain owners complete control of all subdomains. So wallet.realsatoshi.eth and email.realsatoshi.eth can be created using realsatoshi.eth.
It is also worth noting that ENS domains are more than just .eth. Sites with any of the more than 1,300 top-level domain names, such as those ending in.com,.org, or.edu, can integrate directly with ENS from 2021.
For example, if you own realsatoshi.org, you can link it to realsatoshi.eth so that visitors can browse information while also sending money to the same address.
ENS’ principal goal is to make Web 3.0 more palatable by making it easier for individuals and programs to read and communicate crypto addresses. More protocols will most likely be established around ENS domains as Web 3.0 develops.
Quik
Quik is a blockchain domain marketplace that allows users to mint and sell their NFT domains within the platform. It is a fairly new player in the industry, launched in March 2022 (10).
“We believe more businesses and individuals will adopt decentralized platforms if we enhance the user experience and make it simpler,” said Sahil Kohli, CEO of Quik.
Advantages of Quik include:
- Offers businesses infrastructure to move their businesses from Web 2.0 to Web 3.0
- Minters get 5 to 10% lifetime royalties on every subsequent sale, along with unique NFT art for free.
- Quik offers an advanced search system that allows users to mint, sell, or purchase crypto domains quickly with minimum effort, unlike its peers’ complicated UI.
The only downside of Quik is that these domains work only within the Quik ecosystem, meaning they will only work if you install the Quik browser or extension, which is likely to be released by the end of this year. However, the team has stated that this will change soon as the platform expands.
Top TLDs available on Quik:
- .metaverse
- .vr
- .chain
- .shib
- .bored
- .btc
- .doge
- .web3
- .address
- .ai
All transactions on the platform occur in BNB, ETH, or QUIK over ETH-721, 1155, and BEP-721, 1155 protocols.
What’s Next for NFT Domains?
Many companies succeeded largely during the .com era because of their domain and its primacy in search results. They are worth 20 to 100 billion USD as an asset class.
So far, more than 300 million domains are sold, with some of them costing hundreds of millions; cars.com, for example, was valued at over 872 million USD (11). There are also over 1,500 different live and operating domain extensions.
Today, though the market is stagnant, innovation is emerging in a new area, NFT domains. In fact, it is becoming hard to imagine a digital asset class bigger than blockchain domains.
The first blockchain naming service, .ETH achieved the following sales when it went live back in May 2017 (12):
- Over 260k registrations
- 33 million USD in ETH was used to register domains in its first year
- 3.5 million USD was locked up for premium .eth domains
This was all before crypto domains became standard for payments or censorship-resistant websites.
Blockchain domains’ ease of payments and censorship resistance address major issues with present domains, transforming them into global, permissionless business tools.
Traditional names are primarily for businesses, but everyone will need a blockchain domain to pay and be paid. Blockchain domains have both consumer and business applications. Thus we may easily see 3 billion instead of 300 million traditional domains.
At any time in the future, the entire present DNS infrastructure may easily migrate from the current centralized DNS registry to a public blockchain. Blockchain-based name systems will eventually be the technology of choice.
And because of these unique features, usability, and portability, NFT domains could become a much bigger asset class than traditional domains.
FAQs
What are NFT domains?
Unlike traditional domain names, NFT domains are suites of smart contracts coded on a public blockchain. They give users complete ownership of their stored data and are free from third-party censorships.
How to buy NFT domains?
- Sign up or login into an NFT domain marketplace
- Browse the NFT domains selection and click on an NFT that you are interested in to see its listing page
- Purchase the NFT domain
- Once you finalize the payment, transfer it to your crypto wallet
Where to buy NFT domains?
You can purchase NFT domains from platforms like ENS, Unstoppable Domains, and Quik. ENS, Ethereum Name Service, is an open and public protocol developed by a non-profit DAO which focuses heavily on community-decision making and decentralization. In comparison, platforms like Quik and Unstoppable Domains operate as a for-profit company that offers broader choices and user-friendly features at lower prices.
What are the different applications of NFT domains?
The most common applications of NFT domains include:
- Replacing cumbersome and lengthy personal crypto wallet addresses.
- Hosting decentralized and censor-free websites and apps.
- Universal usernames.
- Investment and trading.
How do NFT domains work?
Instead of purchasing domain names via the traditional route from registries managed by the ICANN, platforms like Unstoppable Domains and Quik started registering new TLDs on the blockchain. The use of blockchain to register TLDs makes the system completely independent of ICANN and traditional DNS.
What is the NFT domain?
The NFT domain is a suite of smart contracts coded on a blockchain that you can use as a reference to your crypto wallet address. NFT domains can direct your audience to wide-ranging applications like your website content, DApps, social media, gaming, and more.
How to sell NFT domains?
The entire process of selling NFT domains is easy, like purchasing or minting one.
- You can go to a marketplace like NFT domains marketplace like Quik
- Sign in or log in to proceed
- Connect it with your MetaMask wallet
- Select the NFT domain you wish to sell
- Choose to sell your NFT domain either via bidding or at a fixed price!
