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Domain names lie at the core of online communication. Whether you run a business, non-profit, blog, or personal website, you need an internet address. Theoretically, you can use a third-party platform, like a social network – which, by the way, also runs on a domain name – but having your own spot in a digital world works better for you for a number of reasons, including security, scalability, and self-reliance.
The domain name industry has been evolving dynamically since the mid-90s, giving rise to a robust secondary market, with the prices of web addresses reaching tens of millions of dollars. Examples include Insurance.com, with a $35.6 million price tag, Voice.com sold for $30 million, and Insure.com, which changed hands for $16 million.
Now, a new domain-related market is taking shape, and it's related to one of the most expansive industries in the online economy. Enter the crypto domains.
The concept has been pioneered a few years into the crypto revolution by several independent players, including ENS, Handshake, and Unstoppable Domains (UD). The latter company has grown to become one of the most recognized brands in its category with a rich selection of domain extensions, well-crafted offer, and strong marketing acumen.
But before we go on to dig into the project's details, let's explain the key differences between the traditional domain system and blockchain-based addresses.
DNS domains vs blockchain-based domain names. What's the difference?
Traditional domains are created within the Domain Name System (DNS) – a hierarchical and distributed naming system that translates human-readable names into machine-readable IP addresses. IP identifiers are strings of numbers separated by dots, and as such, they're hard to memorize.
On the other hand, domain names are words separated by dots, which are much easier to remember and relate to for an average user. DNS domain names are used to identify resources such as websites or email servers, acting as a digital phonebook or, as some argue, a digital "real estate," and frequently also a brand.
As regards crypto, aka blockchain, aka non-fungible token (NFT) domains, they are mnemonic versions of cryptocurrency addresses (public keys) – unique sequences of numbers and letters identifying crypto wallets. They work outside the DNS system and can't be accessed through a typical web browser like traditional addresses without special plug-ins.
The primary purpose of blockchain-based domains is to provide a human-readable name for a cryptocurrency wallet address and facilitate transactions. Cryptocurrency addresses operate on blockchains or other distributed ledgers (DLT), use non-DNS extensions, e.g., .crypto, .zil), and offer a range of innovative features.
Specific characteristics of blockchain domains may differ depending on the underlying technology or the policy of an entity running the registry. In general, though, blockchain domains propose a different approach to ownership, control, privacy, and censorship resistance.
Unlike traditional domains, which are a subscription service subject to annual renewal, blockchain domains can be owned for a one-time fee and cannot be taken away by a supervising entity like ICANN.
What's more, they can be used both for cryptocurrency payments and publishing content in a way similar to traditional websites, leveraging the InterPlanetary File system (IPFS), a distributed file storage protocol and a decentralized webpage delivery technology. However, this functionality is in a nascent stage, as web3 resources can't compare with DNS-based websites in terms of user experience.
A brief history of Unstoppable Domains
Back to Unstoppable Domains. The San Francisco-based company was founded in 2018 by Matthew Gould (CEO) and Brad Kam (CTO). The startup has been driven by an innovative – at that time and still today – idea to free domain names from traditional registries, providing users with true ownership of their addresses.
The concept was made possible by leveraging the blockchain technology with its distributed ledger to "immunize" domains to any attempts of censorship by central authorities. Hence the name: Unstoppable Domains.
In 2019, Unstoppable Domains managed to secure funding for its vision, earning a spotlight in the cryptocurrency community. This financial boost allowed the company to expand its operations. The startup rolled out an Etherum-based .crypto extension in addition to its first .zil domain ending linked to the Ziliqa blockchain, which made it past 100,000 registrations by then.
In the following years, the company introduced several more extensions and currently offers over ten "unstoppable" domain endings, including .nft, .x, .blockchain, .eth, .dao, .bitcoin, and .polygon related to the polygon blockchain. Since the beginning of its operations, the registry has created over 3.7 million domains.
Unstoppable Domains didn't stop at domain registration. The startup has been striving to build a whole ecosystem around blockchain domains, forging partnerships and integrations that made it easier for customers to use their blockchain addresses. In 2022, the company raised $65 million in series A funding at a valuation of $1 billion.
Today, Unstoppable Domains is one of the most recognized brands in the web3 space, offering one of the basic services necessary to navigate the decentralized web. From day one, the company has emphasized user autonomy, data privacy, censorship resistance, and security.
How do "unstoppable" domains work, technically speaking?
Crypto addresses from Unstoppable Domains are non-fungible tokens created with smart contracts. They use the ERC-721 token standard, which allows the implementation of an API within the smart contract and easy integration into applications, making it possible for users to manage their web3 names from crypto wallets, exchanges, or marketplaces. Currently, "unstoppable" domains can be minted on Ethereum, Zilliqa, or Polygon blockchains.
The creation and functioning of Unstoppable Domains addresses is enabled by the Crypto Name Service (CNS) protocol, a web3 analog of the DNS, which serves as the foundation for NFT registration, resolution, and management on blockchain networks.
When a user registers a domain through Unstoppable Domains, a smart contract is deployed on the chosen blockchain. This smart contract records ownership and establishes the rules governing that domain.
CNS also handles the process of converting names to cryptocurrency addresses, i.e., domain resolution, ensuring access to decentralized websites and content hosted on Unstoppable Domains addresses.
The functionality of the service is supported by two smart contracts: the registry contract and the resolver contract. Registry contract governs the creation and ownership of new crypto domains and their subdomains (subordinate names left of the dot).
The process of deploying an NFT domain name from Unstoppable Domains' database onto the blockchain is fully decentralized and immune to third-party influence.
The resolver contract executes the translation of a human-readable name into a wallet address when a transaction is performed. It also controls the storage of the domain records.
Key advantages of blockchain-based "unstoppable" domains
Unstoppable Domains has been one of the trailblazers of the crypto domain industry and inspired other projects to follow in its footsteps. The company has a lot of work ahead, though, since the blockchain domain space is still in its infancy, and most people find it hard to understand the concept. Let's look at the key advantages of the "unstoppable" domain approach.
Domain ownership
Registering an "unstoppable" domain allows you to become a true domain owner and fully control your web address without recurring fees.
In the DNS system, names are leased from registrars, i.e., private companies that act on behalf of either generic top-level domain (gTLD) registries, such as Verisign for .com and .net or Donuts for .guru, .social, or .restaurant or country code top-level domain (ccTLD) registries, such as GoDaddy for .us, Denic for .de, EURid for .eu or .CO Internet S.A.S. for .co.
An important tidbit: in most (though not all) cases, ccTLD registries are state or state-related institutions.
In other words, you can never own a DNS domain name, you just rent it for a subscription fee, while a blockchain-based domain is yours for life (no need to pay renewal fees).
Complete control over a domain name
With ownership comes control. If, for some reason, you fail to pay an annual renewal fee, you can say goodbye to your DNS address, no matter how much it may be worth or how much effort you've put into developing a site that runs on the domain.
What's more, DNS domains can be taken away from you based on a UDRP (Uniform Domain-Name Dispute-Resolution Policy) arbitrage decision or a court order. With a crypto domain, you don't face that risk. Blockchain-based domains are recorded on a decentralized ledger. This grants domain holders complete autonomy over their names, eliminating the risk of domain hijacking or suspension by third parties.
Privacy and security
Blockchain-based domains prioritize security and privacy. Traditional DNS domains often require users to disclose personal information in WHOIS domain records, exposing them to potential privacy risks.
The practice has been limited by GDPR regulations but varies across TLDs, with some registries still publishing sensitive information. In contrast, blockchain domains do not require such disclosures, contributing to user privacy and security.
Censorship resistance
Blockchain domains are practically censor-proof, providing a safe haven for users dealing with oppressive governments. They operate on completely decentralized networks, reducing vulnerability to domain seizures and attempts to interfere with the content available under such an address.
Central authorities cannot take control of an "unstoppable" domain or a site running under it.
Immunity to outages
Blockchain domains support web3 decentralized websites hosted on peer-to-peer networks. Unlike traditional websites using standard hosting, blockchain-based websites are immune to outages, ensuring uninterrupted access to content. It's yet another factor contributing to censorship resistance, as no central authority can have the website taken down by a hosting provider.
Web3 compatibility
Web3 is an emerging paradigm of the internet and a groundwork for the new decentralized economy inclusive of all crypto. Blockchain domains are fully web3-compatible. They are also a vital component of the new online environment, just as DNS domains are foundational for the traditional network.
They enable decentralized websites and provide users with digital identity, a brand name, and means to interact with other participants of the decentralized economy. You can also use "unstoppable" domains to log in across web3 dapps.
Streamlined crypto payments
Apart from being a crypto name service, blockchain domains are wallet addresses. They enable you to easily receive and send crypto without having to memorize seemingly random strings of digits and characters.
Linking domains with cryptocurrency addresses is particularly valuable for e-commerce businesses and content creators who can get paid or tipped for goods, services, or their creative efforts.
Key limitations of "unstoppable" domains
Being great as they are, "unstoppable" domains are not free from limitations, resulting both from imperfections of the solution and underdevelopment of the whole web3 ecosystem. In the crypto space, things evolve quickly, though.
Some of the issues described below may be solved in the not-so-distant future. However, currently, they limit the development of blockchain-based domain names.
Limited support
Unstoppable Domains addresses rely on blockchain networks for resolution and management. While this offers benefits like decentralization, immunity to interference from authorities, etc., it can also create integration challenges.
Most web apps and platforms don't support blockchain-based domains, at least not without installing special plug-ins, making it harder for customers to make practical use of "unstoppable" domain names.
Limited TLD variety
Perhaps not a big deal, but still a hurdle. The traditional domain name system offers over a thousand domain endings. Unstoppable Domains' offer is limited to over ten top-level domains. Competing providers offer additional TLDs.
However, the overall number of crypto domain name extensions is nowhere near the number of "classical" TLDs. Also, the names are controversial. Incomparably more people are interested in using domains like .com than .zil due to the meaning or reference they convey, not to mention market recognizability.
Usability issues
Blockchain domains for web purposes are burdened with usability issues. Decentralized websites are far from achieving a user-friendly quality. Hence, they're not embraced by many users. They may also cause confusion or mistrust due to the unfamiliarity of the technology.
Pricing
Prices of blockchain-based domains, including names from Unstoppable Domains, vary based on endings and name quality. Many names are classified as "premium" and priced at several thousand dollars or more. In such a case, crypto domain purchase is not an option for an average user.
Market awareness challenges
Unstoppable Domains have a well-developed marketing and communication strategy, but overall, blockchain-based domain names pose a real challenge for consumers. To handle NFT domains, users need to grow awareness about web3 technologies, be able to manage private keys and understand smart contract functionality, which is not a low-set bar for most people.
Limited email integration
Email is a crucial feature of a domain name, but it's not seamlessly integrated with blockchain domains. Unstoppable Domains has enabled email service for domains in the .crypto extension, though. There are also other services available, such as Freename.
However, using web3 emails is limited to the web3 ecosystem, and it requires installing browser extensions. In general, integrating blockchain-based domains with email services requires custom solutions or workarounds.
Regulatory uncertainty
Last but not least, blockchain-based domains may face regulatory scrutiny or uncertainty in some jurisdictions. Traditional domains are subject to established legal frameworks, making it easier for businesses and individuals to navigate legal issues related to domains, such as trademark infringement.
How to buy "unstoppable" domains?
The first step to purchasing an address from Unstoppable Domains is deciding on the name and TLD most suitable for your needs. You can explore available names directly on the registry's/registrar's website in the search bar.
To go on from there, you'll need to create an account on the platform. It's necessary for registering/buying and managing your domains. After selecting your domain, you'll be prompted to complete the purchase. Review the details and pricing, and then proceed to the checkout.
Unstoppable Domains accepts various cryptocurrencies as payment, including Ethereum (ETH), Bitcoin (BTC), and others. You can also pay with a credit card or PayPal. During the checkout, you'll need to provide your cryptocurrency wallet address for the domain transfer. Make sure you have access to this wallet.
Once you've confirmed the details and wallet address, finalize the purchase by making the payment in the chosen cryptocurrency. The transaction will be recorded on the blockchain.
Mind that not all names are available for registration. Some may be restricted, some classified as premium and offered at prohibitive prices, and some may already be registered by other users. In the latter case, domains may be offered for purchase at the secondary market.
If you're interested in acquiring a domain from a third party, try and contact the user through the contact form.
After the transaction is confirmed on the blockchain network, you'll receive ownership confirmation for your Unstoppable Domain. You can view your domain and manage it through your Unstoppable Domains account.
With ownership confirmed, you can configure your Unstoppable Domain to point to your content, website, or cryptocurrency addresses as desired. Unstoppable Domains provides tools and guides to assist with this setup.
