Domain Names: The Original NFTs
Domain names were once as wildly popular as non-fungible tokens (NFTs). Everyone was investing in them because of the crazy returns to be made. Now, people are showing the same—if not even more interest—in NFTs.
Chances are, you already knew all of that. But here’s what we bet you didn’t know: Domain names were the original NFTs. That’s right. These two commodities are really one and the same. Now, before you reject our statement, close this tab, and rush somewhere else, hear us out for a minute. You see, the thing is, we don’t just believe domain names were the original NFTs, we know for a fact they were.
Allow us to explain.
The Many Similarities Between NFTs and Domain Names
The reason why domain names were the original NFTs is perhaps best explained by discussing the similarities between the two commodities.
Domain names are unique like NFTs. Just like an NFT, there is no identical copy of a domain name. The copies that do exist are never exactly the same. For instance, while someone can copy an NFT’s artwork and create their own NFT with the same art, it still doesn’t have the same address as the original. People can do the same thing with a domain name. They can copy a domain name and register it under a different domain like “.net” or “.org” instead of “.com”. But once again, although the copy will be similar, it won’t be the same.
Like NFTs, domain names are also transferable. Anyone can put their domain name for sale on the market just like they would with an NFT. Even today, there are many people who are making a living out of trading domain names.
Both NFTs and domain names are a commodity. During the end of the 1990s, we saw the commoditization of domain names. Today, we are seeing the same thing happen with NFTs. People are buying and selling them like crazy. Thousands of investors have made a killing trading NFTs in the last couple of months alone.
4. Creation of Whole New Markets
Both NFTs and domain names led to the creation of whole new markets. The DNS industry was created with the sole purpose of supporting the use, creation, and trading of domain names. Similarly, there’s a whole new ecosystem of marketplaces that are supporting the use, creation, and trading of NFTs.
Domain names have attributes that make them useful. People can use them to set up their email and point other people to their own or someone else’s website. Similarly, NFTs too have attributes that make them useful. People can embed them with smart contracts that control the NFT’s use, control, and transfer. These privileges can then be assigned to anyone by the owner of the NFT.
6. Non-Fixed Value
Neither all NFTs nor all domain names are valued equally. The value of an NFT or domain name depends on a wide variety of factors, including the real value behind them, their popularity, and their relevance in the market.
The Evolution of Domain Names to Decentralization
On top of sharing the attributes that make NFTs special, domain names are now certain to enter the world of decentralization. This change is destined since the DNS system will benefit greatly from implementing blockchain technology. Here are three reasons why blockchain technology is the next step towards the revolution of the DNS system.
- Integrity: Blockchain protocol is inherently built to guarantee the integrity of data. This guarantee removes the need for DNSSEC and its famous key renewal ceremony.
- Availability: There’s no way to stop a decentralized, peer-to-peer network. That’s why blockchain technology could either replace, or much more likely, complement existing infrastructures.
- Confidentiality: Blockchain offers the ability to query the nodes for limiting centralization and SPF (single point of failure).
These three reasons highlight why the current domain name system is could benefit from decentralization through blockchain technology.
The Factual Verdict
Although most people aren’t aware of it, domain names were in fact the original NFTs. If domain names are any indication, we believe NFTs are here to stay, as domain names have become more diverse and are more used than ever today.
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