What Is Namecoin (NMC)?
Namecoin is "a peer-to-peer naming system based on Bitcoin." It's a token for a blockchain initially forked from Bitcoin's blockchain. A fork is a change in a blockchain that makes the new branch noncompatible to the original branch. Namecoin was developed as a blockchain and token for a decentralized domain name system (DNS).
DNS translates human-readable domain names (for example, www.investopedia.com) to machine-readable IP addresses (for example, 000.0.0.00). DNS is the mechanism by which domain identities are linked with numerical IP addresses worldwide. The decentralization of this system was intended to end internet censorship and enhance Internet-related security and privacy.
The makers of Namecoin describe it as "an experimental open-source technology which improves decentralization, security, censorship resistance, privacy, and speed of certain components of the internet infrastructure such as DNS and identities."
- Namecoin is a blockchain with a token forked initially from Bitcoin software, used to represent ownership of a domain name.
- It was developed to decentralize the internet infrastructure, reduce censorship, and increase privacy and security.
- Namecoin attempts to replace existing domain name server technology with blockchain technology.
Understanding Namecoin (NMC)
Namecoin uses the concept of data name/value pairs attached to a coin. A name/value pair is a data value and a name used to identify the value in a database. In this case, the name/value pair is a computer-readable numeric address with a human-readable name. A token for the name/value pair is created, and the token holder owns the name/value pair. Thus, a Namecoin is used to establish ownership of a domain name.
The idea for developing a tokenized domain name system was first introduced in 2010 in an Internet Relay Chat (IRC) room, #bitcoin-dev, where users discussed the merits of a bitcoin-like DNS system that came to be known as bitdns. Namecoin was introduced in April 2011, by Vincent Durham (an anonymous name) on the same Bitcoin Forum used to announce Bitcoin.
Namecoin has an active team of developers and support personnel who work to continue improving the blockchain, use cases, and appeal to users.
How Is Namecoin Different From Bitcoin?
Namecoin features several Bitcoin similarities, currently the top digital currency by market capitalization. Namecoin's fork was initiated to create a new way to establish ownership of the human-readable addresses assigned to the machine-readable addresses used on the web—domain names.
The main difference between Bitcoin and Namecoin is the purpose of the technology. Bitcoin creators wanted a viable alternative currency; Namecoin creators wanted a domain naming system. Because of this, there are different consensus and protocol rules that exist within each project. Certain features are necessary when conducting financial transactions that are not necessary when completing name registrations for new internet domains.
Because Namecoin utilizes the same proof-of-work (PoW) algorithm as Bitcoin, you can merge-mine Namecoins without additional hardware (and without any extra electricity) if you are already mining Bitcoin. Both Bitcoin and Namecoin are limited to a total of 21 million coins. The critical difference in Namecoin is that tokens are used up as domain names are registered. The cost of one domain name to Namecoin's usable supply is .01 NMC. This means there are 2.1 billion domain names (or other uses) available using Namecoin.
Goals of Namecoin
Namecoin's developers indicated several potential uses and applications for this experimental token. First and foremost, the developers hope to protect free speech rights online by making the web more resistant to censorship.
Namecoin is a key/value pair registration and transfer system based on Bitcoin technology. This means Namecoin can be used to record and transfer arbitrary names or keys in a secure fashion. It can also attach data to these names.
There are myriad ways that Namecoin attempts to do this. For example, it can be used to attach identifying information—such as email addresses, cryptocurrency public addresses, or specific keys—to various identities as determined by the user. It can also be used as a means of providing decentralized website certificate validation.
Namecoin can be used in Tor and other anonymizing web platforms to generate human-meaningful Tor .onion domains. In the future, the token and its underlying technology could also be used for file signatures, securing voting procedures, notary services, and establishing proof of existence for individuals and entities.
Because of their links with the Namecoin network, these names are difficult to censor or seize, meaning they are resistant to outside influence. Additionally, the makers of Namecoin specify that lookups do not generate network traffic. The result of this is that Namecoin offers improved privacy capabilities as well.
Does Namecoin Still Exist?
Namecoin is still a valid token. You can purchase NMC on some decentralized exchanges, but the token is best used for its intended purpose.
Is Namecoin an Altcoin?
The cryptocurrency community definition of an altcoin is one that is not Bitcoin. Some include Ethereum in the definition as well, so Namecoin is an altcoin.
What Is Namecoin Worth?
Namecoin's developers recommend that you don't buy NMC for investing or currency purposes as it is not intended to be used this way. However, NMC has ranged between $.20 and $2.81 since 2017.
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