The internet is at a tipping point like it was in the 90s. In the 90s, domain names, the internet, servers, and search engines like Google all became accessible to everyone for cheap. This helped create the modern internet as we know it today. Web3 technologies like blockchain promise to take this to the next level. If you’ve been interested in investing in Web3 domains, you must have heard of blockchain technology. This article explains blockchain’s vital role in the Web3 domain world.
How Blockchain Works?
To understand blockchain’s role, you must understand how it works.
In layman’s terms, blockchain is a network of computers that maintains shared data records like a digital ledger. Whenever new data is created, it is recorded in all the servers simultaneously. This data is referred to as a block. And when there’s a change in any of the data, it gets reflected in all the servers.
The intrinsic fact about blockchain is its immutability and transparency. Once data has been recorded in a blockchain, it cannot be changed. Any change applied to it will be reflected in the next block. Also, anyone on the network can view the blocks and the changes made. Thus, added transparency and reliability make blockchain the next big thing.
How Blockchain Will Affect Web3 Domains?
Blockchain has immense, radical potential on how domains work. The Web3 promises to alter the very nature of the modern Web2 internet by decentralizing it.
So, what does decentralization mean in the domain name?
In Web2, the domain names are owned by registrars. Individuals who buy the domain, known as domain registrants, do not actually own the domain but simply register or rent it. If you bought a domain, you’d have to pay a monthly or yearly fee. Upon expiry, the domain name is taken away from you and put up for sale.
Blockchain changes this approach of buying and owning domains. Web3 domains powered by blockchain are truly yours. Once bought, the ownership information is stored in the blockchain as a block. Thus, it’s yours until you sell the domain to someone else.
Blockchain also helps with transparency. Since the blockchain network is accessible to all, anyone can verify the information about the domain before investing in it. Web2 suffers from domain fraud and trademark disputes. With the adoption of blockchain, such events can be minimized if not eliminated.
Blockchain will also open up new revenue streams. In Web2, domain names merely serve as a gateway to content, websites, and apps. But, with Web3 domains, domain owners can experiment with new business models. For example, Freename allows domain owners to earn passive income through their top-level domains. Whenever someone makes a domain purchase under their TLDs, the owners get a commission.
Furthermore, Web3 domain names can serve as crypto wallets; you can accept or pay through these wallets.
All in all, blockchain is critical to the functioning of Web3 domains. If you’re looking forward to investing in Web3 domains, keep an eye on the blockchain development space. Every iteration and technological innovation presents an opportunity to capitalize on.