Matthew Gould, founder and CEO of Unstoppable Domains, started the company because “for too long, companies have controlled people’s digital identities, and it’s time for people to own their identities on the internet.”
As mission statements go, it’s pretty powerful—but it’s also deeply rooted in the reality of the moment: Unstoppable Domains is a blockchain naming service with over 1.7 million registered domains, and it just reached unicorn status with a $1 billion valuation the end of July.
If you add that the number of .com sales for the whole of 2021 was 126,770, and the number of .eth (Ethereum Name Service) registrations in the last month alone was 378,000, it paints the whole picture of the future. of the internet will look like.
It doesn’t surprise me at all that big companies like Microsoft are scared of what it could mean.
Warning for blockchain domains
In his October 2021 Digital Defense Report (opens in a new tab)Microsoft calls blockchain domains (opens in a new tab) “an emerging threat beyond regulation.” Of course, as the report goes on to explain, it refers to “threat actors on the internet (who) have begun using blockchain domains as part of their (…) cybercriminal infrastructure and operations,” which is a common complaint. targeting blockchain-related activities and products such as cryptocurrencies.
Whether or not it is true that decentralized finance facilitates fraud, or malware, more than traditional finance does remains to be seen.
However, a few paragraphs earlier the report reads: “Blockchain domains work differently (from) traditional domains purchased through Internet registrars that operate through ICANN-regulated DNS (opens in a new tab) system (…) and poses challenges both from a utilization and interruption point of view.” We can all agree that is true.
Blockchain domains pose a challenge to companies that have, in Matthew Gould’s words, controlled people’s digital identities for too long – and they present a uniquely timed opportunity for disruption.
Understanding blockchain domains
By virtue of their completely decentralized nature, domains built on blockchain technology are immutable, tamper-proof, and they give users more ownership over their online spaces and identities. Besides having no recurring web host (opens in a new tab) or domain renewal fees, as is the case with most blockchain naming services, the technology is resistant to censorship, regulation or even attempts to block it.
When you take into account 2019 IDC survey figures (opens in a new tab)which saw 82% of companies experience a Domain Name System (DNS) attack in the past year and 63% of companies suffer application downtime, each costing companies an average of $1.07 million, it appears that the security benefits in large degree outweighs the disadvantages.
In addition, we can look at Freedom House’s 2022 Freedom in the World report, aptly titled ‘The global expansion of authoritarian rule (opens in a new tab),’ which states that “autocracy makes gains against democracy and encourages more leaders to abandon the democratic path to security and prosperity,” with a net increase of two to one in countries suffering democratic declines in the past year compared to those that have improved. This would also point to the need for cyber protection from authoritarian states, which could come in the form of blockchain technology and seemingly outweigh any potential downside.
Unlike traditional top-level domains, which only serve as an “internet phone book” to match domain names with numerical and hard-to-remember IP addresses, blockchain domains can be used for much more than just decentralized website hosting on IPFS (Inter-planetary File System). They can essentially be thought of as NFTS: the domain’s ownership is stored just like any transaction in the ledger, which anyone can track and reference, and they can be sold and bought, exactly like a Bored Ape collectible (opens in a new tab) would have been.
Due to the nature of smart contracts, this process is always easy and secure. And since wallets are self-sustaining, it’s up to each individual to keep their credentials and seed phrases safe and secure, because platforms or name services can’t help in the recovery process. However, this means that if you keep your information private and secure, you have absolute control over who, how, and whether anyone else can access your account. There is simply no viable way to hack a crypto wallet, or a Web3 ID on the blockchain, which makes the information 100% foolproof and hackerproof.
Blockchain domains can be matched to a crypto wallet address in the same way that the DNS system can match an IP address to a .com url, and are used to receive and transfer blockchain-based assets such as NFTs and cryptocurrencies, eliminating the need for long numeric addresses that may be prone to errors and miscommunications in the trading process. This way, if you need to send $1 million, instead of asking for someone’s crypto wallet address and going over it again and again to make sure you don’t have a single number wrong (which would be a disaster , as any decentralized transaction is always non-mutable and non-refundable), you can simply send it to johnsmith.crypto, 1234.eth, lars.ccd or even 0.ccd, as CNS domains, unlike all others, can be as short as one letter or Number.
People who buy early blockchain domains are picking up extremely valuable digital real estate, and they know it.
Decentralized domains
In a sense—at least for brands that need to maintain tone and presence across all platforms—domains are the equivalent of social media handles, but with one crucial difference: in the case of Instagram and Twitter, brands can appeal to the platform for to gain control of a “brand account from someone not associated with the brand,” aka whoever registered the username @JimmyFallon or @Puma and then tried to push the real Jimmy Fallon (who actually owns fallon.eth) or Puma (ditto, on puma.eth) ) for ridiculous amounts. However, in the blockchain-verse, that is not the case and never will be.
Transactions are final and immutable, and while you may choose to rent subdomains under your main blockchain domain, no one can force you to relinquish control of the domain you secured and legally own.
And while blockchain domains have been around for a few years, since 2011, they are currently exploding in value. Which means that the longer people and brands wait, the more they have to pay to be part of Web3 – and this is not a new reality. In 1993, a professor of computer and information science at the University of Pennsylvania named Matt Blaze had the unique foresight to purchase the top-level domain crypto.com, and then sold it in 2018 for $12 million. (opens in a new tab)
Maybe, who knows, maybe someone is intercepting microsoft.ccd right now.
Is it a real threat?
Eventually, they will come to replace email addresses, bank accounts and much more, when they can be safely used to store personal information. In the case of Self-Sovereign ID blockchains, such as Concordium, they can be indirectly linked to real identities and used to log into anything, anywhere with a single click. They can also be used to build apps and software, through the use of specific blockchain-dedicated platforms and frameworks.
Of course, blockchain domains are still not widely used, and most of these use cases will only become part of our everyday lives in the near future, when the promise of Web3 is fully realized and perhaps even Mark Zuckerberg’s Metaverse begins to be felt less. as a Matrix concept and more as an essential, practical truth. Issues such as the need for browser plugins or proxy resolution services, as well as limited SEO (opens in a new tab) term, is still leveling out.
However, the potential for disruption is already quite clear.
As mentioned above, the number of .eth registrations in the last month alone was 378,000. On July 3, someone paid 300 ETH ($495,063.96) for the 000.eth domain, and last October paradigm.eth was sold for 420 ETH ( $1.5 million), at a time when blockchain domains, on the other hand, have not even reached the 1.% adoption rate. And this is not just about those on Ethereum Name Service, but think how many different blockchain name services will start to compete with them: The CNS naming service by Bictory Finance (opens in a new tab)a decentralized naming system built on the self-defeating ID professional blockchain Concordium, launches this month.
How long will it be before blockchain domains take over TLDs and we collectively tip over to mass adoption? Ten years? Two? Six months? Time will tell, but if we know one thing when it comes to crypto, it’s that it’s best to be first and move fast.
My guess is that the question of “how much can we get out of blockchain technology” will only become clearer as we move in the direction of a decentralized Web3. Much in the same way that we have already started: with the cryptocurrency boom of the last few years, with the proliferation and meteoric rise in popularity of NFTs, and Facebook’s rebranding as Meta-signaling, we are about to enter a digital future we do not can even imagine yet.
For some – as in the case of Microsoft – it sounds quite terrifying.
But when you really take the time to understand what blockchain technology can do, and how it can shape the future of humanity, fear gives way to excitement. The thrill of innovation, of novelty. The joy of expansion. How stimulating, how fascinating. What is threatening it?
