Domain names in the blockchain: hype or innovation?
Use of blockchain has more drawbacks than benefits
Blockchain is a term that many people have heard, but is often a byword for complexity. In recent years, ideas involving domain names in the blockchain have repeatedly surfaced in our industry. And met with mixed responses. While some people see blockchain as a great opportunity for innovation, others consider it a major threat. ICANN has gone so far as to label blockchain domain names a serious threat to the internet. So, is the rise of blockchain domain names an important trend? And, if so, what are the implications for the domain name landscape?
What is a blockchain?
A blockchain is a chain of data blocks that record information in a permanent form. Existing blocks can't be changed, but new blocks can be added. Consequently, once data is recorded in a blockchain, it can never be falsified. That makes blockchain technology very good for recording and demonstrating ownership of something, such as cryptocurrency. A blockchain is unlike an ordinary database, in that no central authority is required to verify the data.
Initiatives based on cryptocurrency
There have been various initiatives, most with their origin in the cryptocurrency world, to create blockchain-based generic top-level domains (gTLDs). In some cases, the idea is for a blockchain-based TLDs to be added to the existing domain name infrastructure. In others, the proposal is to completely replace the hierarchical Domain Names System (DNS) with a blockchain-based alternative.
Strongest opposition is to domain names outside the root
Most of the criticism of blockchain domains has been aimed at initiatives of the second type. The strict DNS hierarchy has worked well for decades, preventing fragmentation of the internet and uncertainty about where domain names belong. Taking domain names outside the existing hierarchy could mean a name pointing to different places in different ecosystems, resulting in considerable confusion. It wouldn't be clear, for example, whether a domain name matching the name of a bank actually belongs to that bank.
Blockchain domains within the DNS also problematic
However, even blockchain domains inside the DNS would create problems, since their existence would imply two completely distinct technologies operating within a single system. That would rapidly give rise to considerable complexity. What's more, blockchain domains wouldn't be easy to modify. It's a defining characteristic of blockchain that, once recorded, data can't be changed. Updating registration data in a blockchain domain would therefore be well-nigh impossible. What happens when a registration is the subject of a court order, when companies merge or go bankrupt, when a registrant dies, or the code is simply lost? In any such scenario, a blockchain domain name could become unusable. However, it is the very immutability of the technology that attracts the proponents of blockchain domains: no one can ever take a domain name from its registrant.
Most use linked to cryptocurrencies
For now, blockchain domain names are used mainly to point to cryptocurrency wallets. The advantage of such domain names is that long strings of cryptocurrency code are replaced by easily remembered names, such as mikes-wallet.eth. So, for example, Ethereum has created the unofficial .eth domain, which runs in a sort of dedicated DNS (the Ethereum Name Service, or ENS). A user can register a .eth domain name and configure it to point to a decentralised/IPFS website or a cryptocurrency address (wallet). People using .eth pay for their domain names in cryptocurrency (ENS). Ethereum domain names can cost as little as the equivalent of $5 a year, but as much a several hundred dollars a year for the shortest and most desirable names. According to the organisation's website, there are now 825,000 registered .eth domain names. However, most are unreachable for the average internet user, since access depends on having a special plugin or software installed. The .eth domain is therefore fundamentally unlike publicly accessible TLDs, such as .com and .nl.
Blockchain domain names unfeasible
All things considered, our conclusion is that blockchain domain names are a bad idea. Their integration into the wider domain name landscape is complex, and there are numerous administrative and legal objections. A further concern is that blockchains are notoriously energy-greedy. And, besides, what problem does the use of blockchain resolve? We currently see no reason for fundamental change to the way that the DNS, root zone and TLDs are set up. Generally speaking, the existing DNS works well. Consequently, we don't envisage unofficial, blockchain-based TLDs being added to the root zone in the near future. And we don't expect that the entire DNS root zone/root servers will ever be replaced by blockchain.
Got feedback?
This article sets out one perspective on domain names in the blockchain. However, we are of course always willing to listen to other ideas and points of view. If you'd like to respond to this article, please mail michiel.henneke@sidn.nl.
