Blockchain Domain NFTs
With all the hype and headlines around NFT art, we start to hear more and more about NFT domains. Here we will try to help you better understand what they are and hopefully not miss on what we think is the next hot thing in the world of crypto.
For you to understand how Blockchain Domain NFTs work, you first need to understand how DNS (Domain Name System) works and also have a basic understanding of NFTs.
What is DNS?
The simplest way is to look at DNS as a phonebook for the internet. It is much easier to remember domain names like “reddit.com” than it is to remember its IP address “220.127.116.11”. Every device connected to the internet has its unique IP address and DNS service eliminates the need for us to memorize IP addresses. For the domain name to work it needs to be registered in the Domain Name System – DNS. DNS servers are spread all over the world, and help browsers turn domain names into IP addresses.
The DNS network is administered by the Internet Corporation for Assigned Names and Numbers (ICANN). They oversee the development and architecture of the overall system at the top level. Up until recently, ICANN and DNS were the only methods to obtain a working domain name.
What are NFTs
NFT – Non-Fungible Token is a unique file on a blockchain, most likely on the Ethereum network but some other alternatives are emerging. This file contains unique identification and some other data like name, ownership, descriptions, attributes, and even smart contracts. The Non-Fungible part of the name stands for the fact that that token is unique and not interchangeable with other tokens which is the opposite of regular cryptocurrency, for example, anyone Ethereum is the same as any other Ethereum and cannot be differentiated from one another. All those properties allow NFT to represent digital or even real-world items and to keep track of their ownership. This in terms gives us the ability to tokenize ownership which we can later sell or even auction off. If you want to learn more about NFTs you can do so in our detailed guide: What is NFT.
Blockchain Domain Names
Blockchains give us a new way to look at the whole idea of domains, with the ability to put domain names on the blockchain itself the whole game could change, unlike traditional domain names, no organization or even country can control and oversee these domains.
A blockchain domain name is stored on a public blockchain where it can’t be deleted, censored, or modified by someone who doesn’t own it. Even though there are DNS servers all over the world, they are still centralized because they are controlled by one organization, the ICANN, with that blockchain domain names are more secure and much more open. Another difference is that when you buy a regular domain name, in reality, you are just renting it, once you stop paying for it you will lose it, so you never really own it but blockchain domain names can be yours forever after a one-time purchase.
Another popular use case for Blockchain Domain Names is to connect cryptocurrency wallet addresses since it’s much easier to send your payment to “example.eth” than to “0x0230eA3A9A69566cfD65bD68E9161E83F947d22F”.
Blockchain Domain NFTs
The next step in evolution is to tokenize Blockchain Domain Names and make Non-Fungible Tokens out of them. With that comes all the advantages that NFT have, such as that you can trade them, rent them, add royalty for every sale, or even auction them.
Currently, the most popular Blockchain Domains are .eth and .crypto, they are both on the Ethereum network and if you want to start trading with them you can do so at “opensea.io”.
How to buy .crypto or .zil domain
If you want to get yourself a domain with the suffix .crypto, you can buy a new one from “Unstoppable Domains” or you can trade with existing ones on “opensea.io”. When writing, the price for new 5+ letters .crypto domain is 80$ but shorter domains can be much more expensive. Unstoppable domains also sell .zil domains which are roughly half the price, but they are not on the Ethereum network but rather on the Zilliqa blockchain. Bought domain suffixes work for websites and wallets, but Zilliqa has lower fees and on average has faster transaction times. The downside of the .zil domain is that not being on the Ethereum network you miss out on a lot more integrations, web3 tools, and marketplaces like opensea.io. The great thing about both .crypto and .zil is that once you buy them there are no renewal fees, the domain is yours forever.
If you want to buy new .crypto or .zil domain names you can use our referral link and get a $10 discount when you register your crypto domain.
How to buy .eth NFT
The other popular Blockchain Domain is .eth, this one is also on the Ethereum network so you get all the good stuff such as web3 tools and the ability to sell or buy these domes on the marketplace. You can buy a new .eth domain from “https://ens.domains/” or you can trade with existing ones on “opensea.io”. One thing that is different is that .eth is more like a traditional domain name in the sense that you just rent the domain name and have to pay renewal fees every year. To be honest, the fee per year for a 5+ character domain is just $5 which is not a lot but with current ETH gas prices, the price for one year for the .eth domain was $5 + eth gas fee (0.053ETH) which comes to $105. For shorter domains price goes up so for 3 character renewal fees go up to $640/year plus gas.
The Downsides of blockchain domains and NFTs
Same as with most blockchain technologies, Blockchain Domains are in the early phase and have all the usual problems that come with that. The first major pain is to get your browser to recognize these new domains.
Access .eth domains from your browser
For .eth to work, if you don’t have any browser extensions the easiest way to get it to work is to add .link at the end of the address (for “https://almonit.eth/” put “https://almonit.eth.link/”). This is the result of the Ethereum name service partnering with Cloudflare, so this should work if that is what you use.
Set your browser for .crypto and .zil domains
For .crypto and .zil it is a little more work, you need to go to the “Settings menu, select Privacy and Security > Security > Advanced” section, and set Custom URL as :
Also when entering an address you should finish with “/” so your browser knows it is an address and not a search term (“.cyber.crypto/”).
Some other downsides are the speed since it will work a little slower than regular domain names, also you don’t have as much choice when it comes to domain suffixes as you have with the regular stuff. With current gas prices making or trading domains or any other kind of NFTs can be very expensive.
Investing in NFTs
The year 2021. is definitely the year of NFTs at least so far, with all the hype and press coverage the people are selling NFTs for ridiculous amounts of money. With that in mind, there is an opportunity to make money in trading NFTs in general and trading domain NFTs in particular, but you have to be smart about it. Do your research and don’t rush things, if you have experience buying and selling regular domains it will go a long way in trying to succeed in this new market.
It is hard to predict where Blockchain Domain Names will be in a year or two, right now they do work but not as well as DNS, they have a lot of work ahead of them right now since they are far from polished. I am only certain of one thing, they are the future, in 5 to 10 years they will be the standard, probably not as they are now but we are in the early days. This will be a very interesting area to follow in the next few years and you can only expect great improvements, so if you are looking for something to get in early that has great potential, this is definitely it.