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When I first heard of namecoin an address costed 50 NMC, now they are priced 0.01 NMC.

This means they are as much as free, and the only thing preventing someone from just brute-force registering tons of them is... that it is pointless to do so, because due to this problem itself, namecoin is essentially a worthless project.

Using a bitcoin-like currency to handle DNS was a nice idea at first, and I have no clue about what could have caused them to mishandle the design so much.

Question is, did they state somewhere the reasons behind this apparently foolish decision to set the registration prices to "basically free" after a little while? Didn't anyone point out how stupid that idea was?

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6 Answers 6

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A question concerning a similar problem has been asked awhile ago. Researching an answer for it, I couldn't find any justification for the imbalance of Namecoin domain price versus reward, nor did anyone from the Dot-bit forum mane any statement about the situation.

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  • +1 Yeah I did ask that question, and eventually it spawned this more specific one. Noticing it got no attention on their forum, I'd safely say Namecoin is without any doubt a dead project.
    – o0'.
    May 12, 2012 at 19:21
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When I first looked into this issue the low price for name operations struck me odd, too. But the rationale behind it is to allow to register as many names for as low a price possible. You need to realize namecoin is not only about domains and the dot-bit project is only the first large namecoin project. namecoin is a generic name/value accounting system. Still, because dot-bit was the first project based on namecoin the design had an initially high price for registering names to prevent squatting. Actually it worked very well, if it had not been there I and others would have registered thousands of domains much earlier.

there was a discussion about fees and thoughts about modifications here: http://dot-bit.org/forum/viewtopic.php?f=2&t=360

By now almost a 60000 domains have been registered so imho it is more important to have low name prices to allow other usage of the namecoin system than to further prevent squatting: possible use cases

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  • I don't understand. Now everyone could name-squat 5000 domains solving a single block, what's the point of preventing it for a while and then stop doing that?
    – o0'.
    May 14, 2012 at 9:57
  • because the most valuable domains have already been registered by many different people. domain sadfsadfasvdyv.bit is worth much less than nx.bit
    – kermit
    May 14, 2012 at 20:50
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    It's still 5000 new domains every 10 minutes, it's utterly foolish.
    – o0'.
    May 15, 2012 at 8:33
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    it's 2500. but once more: namecoin and dot-bit are two different projects. think about a messaging system based on namecoin.
    – kermit
    May 17, 2012 at 19:37
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An issue is the future. As namecoin actually destroys the coins it uses on domains makes that there will be a hard limit on usage.

If 21M coins are released each costing 1NMC thats a very small cap on the amount of available domains. Also take into consideration that the Namecoin network does not know what value 0.01NMC is in relation to USD or even BTC.

These situations make for creating a cap at 2.1B instead which is "more than enough".

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    As I pointed out in the other comment, we're still talking about 5000 new domains (or renewals) every 10 minutes. Way too many no matter what.
    – o0'.
    May 17, 2012 at 13:29
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    Maybe you can make some suggestions on the .bit forums on what to do?
    – MaxSan
    May 17, 2012 at 15:45
  • no, sorry, it's too late for namecoin to be saved I think.
    – o0'.
    May 17, 2012 at 18:31
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To expand upon Phelix's answer, the discussion he mentioned at http://dot-bit.org/forum/viewtopic.php?f=2&t=360 is about two things:

  1. The same as this question - why namecoin prices are so low
  2. Possible ways of adjusting the prices in the future.

The response to topic 1 seems fairly reasonable, at least in the long term (although namecoin may not survive that long in the short term if the problem persists). Namely, people said that as miners get fewer namecoins from generating blocks, they will demand higher fees to include transactions in those blocks. Eventually, the miners will set the price of registration based on how quickly somebody wants to register a name. If you don't care when it's registered, you can give a small or nonexistant fee and your name will probably be included in a future block. On the other hand, if you want a quick registration, you can include a much higher fee to likely get in the next block. Thus, in many cases registration prices will be set by the free market and my rise significantly higher than 1 NMC.

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In my opinion, not only the need for allowing as many domain names as possible to be registered was the reason for decreasing the registration price, but also the logic behind the free speech concept hidden also in the bitcoin protocol. In the crypto-currency realm, everyone can pay anyone, thus supporting any project, endeavor or enterprise, without any smallest censorship ever. Translating that into the namecoin system means that owning a domain name cannot be stopped from now on by anybody (because no ICANN is present here to restrict as its will any freedom of users). Let's not forget that a name is a basic right, like the information is a public asset, too. A name is meant to be owned, displayed and associated with a brand or content. If anyone would try to own 5000+ names, without any content, that would "empty" the value of these domain names, will freeze the market for them and will decrease the value perceived or even claimed by that greedy owner.

Imagine (as an analogy) that someone would own 5000 servers worldwide, trying to extort people in need of a webhost with a large bandwidth and 100% online time. People would simply avoid these servers (if overpriced) and go elsewhere, even host their websites on their Android devices as a last solution :). Creating something as namecoin offered people the freedom, in the meaning that if someone would take over the majority of .bit domains, someone else could create in no time a clone of namecoin, for registering an create .bix domains, then .byte domains and so on (even dot www, if needed!) ... So the cheap option of owning a name is similar to the affordable option of having a license plate on your car. Do you have that car ? The govt will invent new numbers in order to be able to let you register the car with another license plate different than the one of your neighbour. It is very simple. The point is not in just simply owning the names, but the websites that created first time the inside value for a brand.

As a conclusion, the price is irrelevant, as time as it was just opened a path to almost unlimited supply of domain names !

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  • This makes exactly zero sense. Free names for everyone means that first-come first-served any malicious person may register as many as they wish, depriving you of your name.
    – o0'.
    Sep 20, 2014 at 18:23
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    You can use any combination of names for your own name. (What you say about depriving <i>you</i> of <i>your name<i> was doable since ICANN was established, if you remember that). Let's not confuse name with "identity" or even more, with "brand".My point was that namecoin offered us now an almost unlimited supply of brands, not of identities. By the way, nobody can deprive you by your real identity, he could mostly deprive you by duplicating your identity online. However, I am not sure why one would need to establish such thing as www. NameSurname. com on the internet
    – Bit-Crowd
    Sep 21, 2014 at 11:07
  • Yet, nothing stops you from creating in the same time your dot com identity with dot bit identity. Nevertheless, don't forget that it's important to fill with some content (website) that identity / brand, else any malicious registration would remain empty and valueless (think of an un-tradeable commodity)... Do you think anyone registering 5000+ domain names have any patience to create 5000+ valuable websites with them? I doubt it. Again, if you have an identity to be protected, you should have already registered it by now. Else, can you fight CocaCola for stealing "from you" that brand name ?
    – Bit-Crowd
    Sep 21, 2014 at 11:19
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Although this question was posted long ago, I thought I'd still share my ideas on this topic.

I've been doing research on name squatting in Namecoin for a while and it seems to me that raising transaction costs or renewal fees will not solve the problem. The only way squatting activities can be reduced imho is to incentivize the "fair" usage of Namecoin as a decentralized naming system, i.e., making squatting even less attractive than it is now (I shall not go into detail quite yet).

@Lohoris' comment - Yes, name squatting has damaged Namecoin. Yes, the Namecoin devs seem to ignore this topic. BUT: I would not say that Namecoin is dead. There need to be changes, which will probably result in a hard fork, but Namecoin's still there.

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