Web3 is still undergoing the same evolution as the Internet did in its early years, providing a crypto wallet a human-readable name is an important evolutionary step. The Convergence of Blockchain, Metaverse, and Internet Forms”Web3“, the third generation of the internet, and two fundamental parts of Web3 are crypto wallets and NFTs. Usually, when people hear about non-fungible tokens or NFTs, they think of an overpriced JPEG image that someone wasted a lot of money on on, but NFTs can be more than that.”NFT domains” are specialized NFTs that give crypto wallets a human-readable name, correcting a massive user experience problem that Web3 still suffers from.
A crypto wallet is an account on a blockchain network identified by its “public address“, which is usually a 40-digit hexadecimal number that only a machine can remember. When sending crypto/NFTs to someone, copying their public address is the only practical way to ensure that tokens don’t go to the wrong address. Getting a recipient’s address correct is extremely important, as copying the wrong address (or changing a single digit) will result in a permanent loss of funds.Worse, because these addresses are very similar to the human eye, it makes cryptophishing attacks and error to a simpler instance This is where NFT domains come in to make Web3 simpler and more secure.
With an NFT domain, NFTs and cryptocurrency can be sent to a human-readable username instead of copying and pasting the recipient’s public address. Instead of a JPEG image, NFT represents a domain name, such as “screenrant.eth,” that have functional use and value. The two largest services that create and sell NFT domains are Ethereum Name Service (ENS) and Unstoppable Domains (UD), although others also exist. Because the domains are NFTs, they can be transferred or are sold to new owners on NFT marketplaces such as OpenSea without a centralized intermediary. NFT domains are also used to name and navigate to decentralized web sites hosted on IPFS, and there are significant differences between Web3 and Web2 internet sites. To obtain an NFT domain must be purchased and minted from an NFT domain service, or purchased from its current owner if it already exists.
Ethereum naming service vs. Unstoppable domains
The Ethereum Name Service was the first project to create NFT domains. With an ENS domain, a user can give their Ethereum address a human-readable name ending in the coveted .eth extension. ENS domains are purchased for a period of time, and paid for directly in ETH using an Ethereum wallet. ENS domains also include subdomains that can be assigned to different addresses. For example, a domain would be screenrant.ethwhile a subdomain would be phoenixangel.screenrant.eth. ENS charges a rate of 0.003 ETH per year plus an Ethereum transaction fee upon registration, but subdomains only charge a transaction fee.
Unstoppable Domains works with hundreds of different blockchains and offers the extensions .crypto, .nft, .x, .wallet, .bitcoin, .dao, .888, .coin, .zil and .blockchain. Instead of renting the domain name for several years, a flat dollar amount is paid by credit card to “park” the domain and NFT can be minted later when the owner has a Polygon or Ethereum wallet. Once minted, the owner owns that domain forever until they transfer it to someone else. The price of a UD domain depends on the domain’s potential popularity, for most between $10 and $100, but with a few high-value domains running four or five-figure prices.The only downside is that Unstoppable Domains can’t use subdomains.
While Web3 mass adoption has security and privacy issues that need to be addressed, buying one or more domain names for a crypto wallet or website now can be a very practical (or lucrative) choice for the future. As more use cases are built for Web3 and NFT, more people and businesses will open crypto wallets and buy domains for them. NFT domains are a very useful way to make any crypto wallet or Web3 website more personal, identifiable and legitimate, and are essential for brands and influencers looking to establish a Web3 presence or receive crypto donations/payments.
Sources: Ethereum Name Service, Unstoppable Domains
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