Namecoin

Namecoin
Namecoin logo Namecoin Qt client, manage names tab (where domain names are registered and managed).
Central bank	None. The Namecoin peer-to-peer network regulates and distributes through consensus in protocol.[1][2]
Date of introduction	18 April 2011
User(s)	International
Inflation	Limited release as a geometric series, rate halves every 4 years reaching a final total of 21 million NMC.[1] There will eventually be a very small amount of deflation, as a small amount of NMC is destroyed when a name is registered.
Subunit
0.001	mNMC (millicoin)
0.000001	μNMC (microcoin)
0.00000001	Smallest unit
Symbol	ℕ
Nickname	NMC
Plural	Namecoin, namecoins

Namecoin Qt overview tab. The registering and updating of a domain name can be seen in the recent transactions section.

Namecoin (sign: ℕ; code: NMC) is a cryptocurrency which also acts as an alternative, decentralized DNS, which would avoid domain name censorship by making a new top level domain outside of ICANN control, and in turn, make internet censorship much more difficult, as well as reduce outages.^{[3][4][1][2][5][6][7][8]}

Namecoin uses modified Bitcoin software,^[4] thus there is a limit of 21 million Namecoins. Each Namecoin is divisible down to 8 decimal places.^[1] Namecoin currently uses the .bit domain. As of January 2014, 123616 .bit domains have been registered.^{[1][2][6][9][10]} bit domains are not currently awarded, hence to resolve domain names, one must have either a copy of the Namecoin "blockchain" (a decentralized ledger storing all transactions and domains), or access to a public DNS server that participates in the Namecoin system.^[1][11]

History

A Namecoin like system was first described in 2010, with ideas such as BitDNS by Appamato, and then by internet activist Aaron Swartz, as a counterexample to Zooko's triangle.^[8][12][13] A few months later on April 18, 2011, it was implemented as Namecoin (which at the time had no GUI).^[14][15][16] In June 2011, Wikileaks publicly endorsed Namecoin.^[14][17] In September 2011, Namecoin switched to merged mining (see the mining section). In 2013, GUIs, such as Namecoin Qt began to appear; as of November 5, the latest version of Namecoin Qt is version 0.3.72.^[18] February 5th, 2014, a Windows/Linux plug-in called FreeSpeechMe was released that allows automated resolution of .bit addresses by downloading the Namecoin blockchain and running it in the background.

Uses

Although Namecoin can be used as a currency, it is mainly intended to be used as a decentralized DNS.^[1][2][6] Domain names are registered by paying a small fee (to stop spam and leave domains for future users) of 0.01 NMC, they are then updated for the first time, after this the person owns the domain, which can only be removed from them if they choose to transfer it.^[1][6][19] Domain names must be updated every 250 days, or they will expire.^[1]

There are also other possible Namecoin uses including:

• Login system^[20]
• Notary/timestamp system (note that this is not unique to Namecoin, other cryptocurrencies could implement this too)^[21]
• Torrent tracker via magnet links^[22]
• Public file checksum, which would be used to ensure integrity of files, they would be stored on the Namecoin network to ensure the checksum itself couldn't be tampered with.^[23]
• Web of trust
• Personal namespace^[24]
• Messaging system^[25][26]
• Alias system^[27][28]
• Identity system^[29]
• Data Storage
• Voting

Network

Mining

Namecoin production and transfer is handled by a peer-to-peer network similar to that of Bitcoin.^[6] A proof-of-work system is used, where nodes search for a small enough hash (SHA-256) value in a process called mining.^[6] When a small enough value is found, the node which found the hash is credited with a set number of Namecoins (50 NMC as of Nov 2013), and the hash, along with any transactions or domain name registrations, is added to a decentralized ledger called the blockchain.^[1] After several subsequent hashes have been added onto the blockchain, transactions and registrations are considered to be irreversible, as an attacker would have to find a new set of hashes to replace all the preceding ones (this would require an infeasible amount of computing power).

Namecoin is merge mined with Bitcoin, which means that a node can mine for both Namecoin and Bitcoin simultaneously at the same rate that they would mine just one.^{[11][19][30][31]}

Addresses

Payments in Namecoin are made to addresses (based on digital signatures). Addresses are human readable strings of 33 numbers beginning with the letters N or M (they used to start with 1, like Bitcoin, but this was changed to avoid confusion).^[32] This makes Namecoin pseudonymous, but not anonymous.^[33][34]

Major markets

Namecoin can be traded for other currencies through various online exchanges. One such exchange is BTC-E.

Criticism

Since domains are extremely cheap to obtain with Namecoin, and registered domains cannot be seized (they can only be transferred by their owner), Namecoin has had problems with cybersquatters buying up domains, hoping to resell them later for a profit.^[2]

On October 15, 2013, a major flaw in the namecoin protocol was revealed by the Kraken exchange COO, Michael Grønager. The exploit allowed any user to freely steal any domain from any other user.^[35] A temporary fix was deployed which prevents fraudulent name transactions from affecting the name database without requiring miner intervention, and a long-term fix which rejects blocks containing such transactions is scheduled for block 150,000 if a majority of miners upgrade.^[36]

See also

• Protocol of Bitcoin
• Bitmessage
• OpenNIC
• Open Root Server Network
• Zooko's triangle
• .bit

References

External links

Wikimedia Commons has media related to Namecoin.

• Official website
• Namecoin forum
• Namecoin historical price