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Bob Hawkes

What Do Decentralized Systems Like Handshake Mean For Domain Investors? A Chat With Steve Webb

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By Bob Hawkes, Feb 11, 2021
  1. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    Everywhere you go in the domain world these days someone is talking about decentralized domain name systems. There are both proponents and sceptics, as this recent NamePros thread shows. In last week’s NamePros Blog I summarized ideas on where domain names will be in 5 years, and decentralized naming systems were definitely on the list.

    Last week I had an extended online discussion with Steve Webb, mainly around Handshake and decentralized naming systems. Below is part of that discussion. I came in with a naive understanding of decentralized naming systems, and Steve helped me see more clearly what the Handshake protocol was all about.

    TitleSteveWebb.png

    Decentralized Naming Systems And Handshake

    While Steve Webb was enthusiastic to answer my questions about decentralized naming systems, he did want to stress this disclaimer. ”I am more familiar with Handshake than most, but my partner at Park.io, Mike Carson, and a number of others, could give a much fuller answer than me. There are many in the community that are well beyond me in day-to-day interactions with the Handshake system.” His position at Park.io is partly to free up Mike Carson to work more directly on Handshake initiatives.

    So alternative naming systems have been around for awhile, what makes the Handshake initiative different?

    A number of projects have started and failed in the past, but I am not familiar with those historical projects in detail. Obviously I am biased toward Handshake, and feel it is the soundest overall. There are three main current decentralized naming initiatives: Handshake, Unstoppable Domains and ENS. Handshake is more comprehensive, while in my way of thinking the other two are subsets of the functionality.

    The thing that makes Handshake great is that at its core it is a very distributed and secure root zone system. Anyone who spends time on the Internet knows that nothing is completely secure. The huge advantage of Handshake is that it is duplicated on the blockchain distributed across many servers, so to compromise the system you would have to take down a very large number of servers.

    The existing conventional TLDs are all incorporated as part of this distributed system, so Handshake is potentially an all-encompassing naming system.

    One exciting thing is that you can truly own a TLD in Handshake. In Handshake you can be the lifetime owner of the TLD. As long as you keep your private key, you control the name for the life of the Handshake network. In the current centralized domain name system, you don’t truly own a name, you lease it for some period. In certain circumstances it is possible that your name could be taken away.

    It is important to keep in mind that all of the decentralized projects are still in their infancy, even though each is being actively developed.

    Do I understand correctly that conventional domain names currently in the ICANN centralized system at time of launch are protected from someone else claiming that same name? They can be claimed by existing owners through a DNSSEC record process?

    Yes, that’s right. As of one specific date all of the existing domain names were ‘locked’ and could not be controlled by anyone else under Handshake. They are prevented from colliding, and will live in harmony with the new names introduced on Handshake. The Alexa top 100,000 are treated a bit differently, in that there is a multi-year period in which the owners can come and claim them. There is also a trademark sunrise period.

    However, it is possible that future new centralized TLD releases could in theory collide with Handshake domain names. In those cases, whichever version is more popular will become dominant. We saw a similar thing back in the era when there were relatively few Internet chat rooms and bulletin boards. Channels had hashtags well before Twitter. You could in theory have the same hashtags in use on different servers, but it was not a huge problem.

    Are there other restrictions on what names can be created. For example, are names which would be considered offensive or discriminatory able to be registered?

    I don’t know of restrictions along those lines.

    I read that the Handshake system is set so that a few people cannot monopolize a large number of names, but I don’t understand how that works.

    There are a few aspects. The primary mechanism is the way the auctions are scheduled over an extended period. Not all the names are released at once, since that would have allowed a few people to scoop them all up. Every single keyword is being dictated by the market.

    No individual benefits directly from the auction proceeds. The funds are spent in HNS currency. The money you pay goes into a black hole and can never be spent again. You have to put value into the network, but it never goes to another party, so that helps keep the system honest.

    Handshake is essentially a protocol - it is not owned by anyone. It is analogous to the Bitcoin system not being owned by anyone. There is no single gatekeeper. Anyone can participate. Obviously some people participate more.

    I think I recall you saying that you see several roles, depending on technical and financial involvement, that domain investors can be involved in the decentralized system. Could you briefly outline that?

    On one level you can own domain names. Namebase is the easiest way to participate in the auctions. You can get an account on Namebase, and become involved in buying and using decentralized domain names. As of now they are still very reasonable in price, although increasing. This may be an opportunity similar to the early days of the legacy extensions, when only a few people saw the value. All things have risk, but the risk versus reward balance is very much in your favour, in my opinion.

    If you own a TLD on Handshake, another possibility is to act like a registry. Someone who owns .defi on Handshake is doing very well selling subdomains off .defi for various projects. This is more like the traditional system, with leasing of the subdomains.

    Mike Carson and I think this is the future, and that Handshake is a robust and promising implementation. No one can say with certainty this is the future, but if you share the optimism, and have the technical skills, there are still opportunities to work in development of Handshake.

    If Handshake really takes off, will there still be a place for conventional domain name investing?

    Even in the most optimistic scenario for a decentralized domain name system, it looks 5 or 10 or more years before possible domination. I find it difficult to see a time when conventional TLDs will go away, so there should be a role for conventional domain investing for a long time. Large and complex technological systems tend to evolve slowly. For those with valuable current online brands, it is a no-brainer to secure the match in the decentralized system to protect their digital brand.

    With Brexit a huge number of United Kingdom registrants of .eu lost their domain names because they were no longer in the European Union. Imagine if you had built your entire online commerce platform on an .eu domain name, and now it was taken away. In Handshake, you truly own your domain as long as Handshake exists. One might view having Handshake as a backup option if you ever lost your domain name.


    A Few Questions On Park.io

    Let’s look briefly at your work with Park.io. I sense that the operation has grown strongly in recent years. Is that right?

    Yes there has been growth. The site has statistics from the past three years. The number of auctions increased by 62% from 2019 to 2020, and they increased by 77% from 2018 to 2020. The statistics page shows a breakdown in expired auctions by TLD, average auction prices, and a variety of other data. Since starting in 2014, Park.io has handled about 20,000 registrations and 7000 auctions.

    While well known for .io, of course, your platform now handles quite a few country code and a few other TLDs. For example, I notice that the new gTLD .red is on Park.io. How do you choose which extensions to handle?

    The easiest answer for .red is that they are under the same umbrella as other TLDs we handle, so once you get one, it is little extra effort to support the other. But in general, the TLDs we handle are driven by user demand and being able to deliver results for customers in a competitive manner. One of my responsibilities when I came online was to expand our offerings.

    I probably should know this answer but I don’t. Can users place names on Park.io for auction, or is it strictly an expired auction stream?

    The simple public answer right now is that it is an expired stream. While we have been thinking about expanding to user auctions, and hope to do that, right now that is not live for general use.


    A Bit About Steve

    I asked a few questions to learn more about Steve Webb, and later checked out his LinkedIn profile. By the way his formal name is Steve - that is not an abbreviation for Stephen.

    Steve has been at Park.io almost two years. In the years since his PhD in Computer Science was awarded in 2008, he has worked in SEO and marketing, software engineering, lecturing, social media, online security, startups and also took time out for several extended trips.

    His PhD thesis, from the Georgia Institute of Technology, is entitled Automatic Identification and Removal of Low Quality Online Information.

    I asked him what advice he had for someone wanting to make new connections and set out on a new venture. He replied that the hardest step is the first - simply having the courage to reach out to someone that you would like to work with on something. Most people are surprisingly open and helpful, but you need to make that first step to contact them.

    I like to ask people I interview who was their biggest influence. He did not hesitate to say in his case it was his mother.

    Right now Steve is clearly excited about his role at Park.io and in the decentralized naming Handshake protocol. Somewhere down the road, he would like to get back into teaching, what he was doing when the 2011 earthquake struck Christchurch. As he recounts
    Steve Webb just joined NamePros, and I hope you will give him a hearty welcome. He has a remarkably rich set of experiences and skills, and is a friendly open person.


    Decentralized Naming Links

    Here are some of the resources I used in researching this topic.

    Final Personal Thoughts

    I found the following statement from the Handshake FAQ clarified for me the big picture.
    I still feel somewhat divided about initiatives like Handshake. On the one hand, I think it is incredibly cool that an individual domain investor can own and use a TLD in the Handshake space. NamePros member HotKey recounted how he did exactly that, now owning the .bells TLD in Handshake, including the domain name jingle.bells. I can potentially see how a marketing firm will run with this idea, and create new and interesting ways to use domain names. It is exciting.

    However, one of the strengths of the decentralized system, is perhaps also its greatest weakness. No one can take away your domain. Without centralized control, some names will be used for questionable purposes, and that may shake confidence in the entire naming system. I remain open and guardedly optimistic, although still pondering what it will really mean for domain investors.



    Sincere thanks to Steve Webb who spent about two hours talking with me. He had clear explanations and a friendly manner. I condensed this interview, changed order in some cases, and also paraphrased certain answers. I hope that I have maintained the intended meaning.
     
    The views expressed on this page by users and staff are their own, not those of NamePros.
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  4. Bob Hawkes

    About The Author — Bob Hawkes

    Domain analyst, writer and informal educator, with particular interests in domain name phrases and non-business uses for domain names. I am a risk averse domain investor who only invests modest amounts in a variety of extensions and niches. Don't hesitate to contact me - I like to help!

    This is Bob Hawkes's 78th blog post on NamePros. View all blog posts

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  5. Comments (17)

  6. Domain Season

    Domain Season Established Member

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  7. The Durfer

    The Durfer Top Contributor VIP Gold Account

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  8. handpicked

    handpicked Established Member

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    "No one can take away your domain."

    I bought some blockchain based domain names .crypto and .zil (zilmoney. zil and zilmoney. crypto) in the initial days paying 24$ each from unstoppable , now the names suddenly dissapeared in my account, mails go unanswered too. there's no UDRP here. Gone is gone.
     
  9. domaineed

    domaineed Established Member

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    The tech seems cool and all, but I doubt it will gain any serious traction. It is not solving any major problem faced by the majority of 'established' online businesses or add any remarkable benefits. Will certainly create more ambiguity and confusion. JMO.
    Informative article @Bob Hawkes and thanks for sharing. It would be nice if veteran investors can offer their views here.

    Thanks.
     
  10. HotKey

    HotKey Made in Canada VIP

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    Great article Bob. A go-back-to for me.

    Handshake has taken the initiative on their end, and whether or not it becomes a two-way street is to be seen. Was really impressed by this actually, because I wonder if ICANN would give the same respect? I'm leaning towards a neigh-neigh.

    It is insane now, late 2020 there were 2 character number TLD domains avail for less than 3k HNS. These were bought, and resold this year for 5-figure HNS. Not by me. Same with many single-word term TLDs. For perspective, $100 USD translates to roughly 350 HNS currency.

    The difference between now and when legacy extensions first arrived, is people understand the potential now. So perceived values skyrocket in a much shorter period of time.

    The same can be said for current domains, there is a ton of questionable content produced on the web via domain names. Have always believed in individual governance and accountability, it's our choice where to go on the Internet. Controlling domains is like controlling of freedom of expression. The current system of registry restrictions and UDRP has too much unsubstantiated control.

    But you bring up a good point, where some of the really nefarious stuff could be accessible and unprohibited on a decentralized platform. It really begs the questions though; on whom does the onus fall? What is it we want exactly when it comes to freedom to go where we want or produce what we want in the digital realm? Under a controlled system, what is good for one may not be good for another, so rules are laid. Under a decentralized system, what is good for one is defined by them own self.

    For investing purposes, people are going to want to be in control- we are slowly losing all aspects of it in the current system. It is sneaking up on us. And has been for many years. It's possible it's going to start off very fringe though, as many of these things do.

    Really exciting! I think Handshake is on the right track. Though I really have no darn clue how the back-end stuff works on these tbh. But I like what I saw and the people working in it, are working swiftly, and hard. There is a LOT to learn, and all in good time.
     
  11. BradWilson

    BradWilson Upgraded Member Gold Account

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    Wow @Bob Hawkes this was a long one with great information so a big thanks.

    I'm not even close to having a clue about this subject so with all the usual distractions I deal with, it's taken me a really long time to finish reading this.

    Extra thanks for linking to all the additional resources which will of course keep me busy for awhile :) That's good because I certainly don't have enough to keep me busy already ha.
     
  12. domain invest3r

    domain invest3r Pinyin domains for sale

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    Coindesk have an interesting piece about Handshake. In summary, at this point in time, it's a highly speculative investment. The infrastructure of the namespace as it currently exists, is not yet malleable to disruption. Web3.0 will likely incorporate the current namespace rather than attempt to overhaul and supersede it. And there are other projects that do just this... my 2c.
     
    Last edited: Feb 12, 2021
  13. BradWilson

    BradWilson Upgraded Member Gold Account

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    Oh no, I totally forgot to welcome @Steve Webb in my previous comment sorry about that.

    Steve, this interview gave us a very interesting introduction and I'm sure we'd all benefit from hearing more of your knowledge and experience.

    So welcome and I hope you enjoy the ride.
     
  14. Jimmysun

    Jimmysun Established Member

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    Thank you Bob.
    This is a really interesting project that the future is going to become more and more comprehensive and these domains are more likely depend on how you build and make it usefully, because crypto domains can convert to many kinds of purposes.
    Too sad I don’t have enough time/money to focus on so many various subjects because there are tons of fun things in crypto world.
    There will be billions and billions come to these territories in nearly future, not only the domain names...right now I am focusing on something related to virtual stuffs such like arts, realestate, avatars etc.
    For some people don’t understand how it is going to be could go to this website opensea.io that are many different kind of virtual objects you can sell, I believe those crypto domains can make it useful on those ideas, for example there is a virtual estate project called Somnium, Virtualand,Virtualvoxels etc. if I were a project founder I could make users point their domain names to be the building number of references ( Just an idea).
    I think it’s not the right though that you think it’s like .com era that you could buy and hold 2 letters or dictionary words domains so can convert to a good profit, instead it’s better to have had some studies to decide which project has a promising future so you can make a right investment.

    sorry for the sh**ty English.
     
  15. Mohamed Ahmaid

    Mohamed Ahmaid Established Member

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    Thank you Bob
    Why decentralized domain names have slash instead of dot?
     
  16. Super-Annuation

    Super-Annuation eMoneyToken -Superannuation - Brekky - SuperFunds

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    UnstoppableDomains.io make the whole process of setting up a simple lander/blog/homepage on the IPFS seamless.

    They allow you to use your blockchain names and publish after editing their templates provided, then pay gas fee with your wallet.

    If you have some cool .eth, .crypto, .zil names it's simple to advertise all on a lander.

    Handshake should really develop a client for airdropping to make the whole process user appealing... I'll probably do it later, but it's nearly as 'tedious' as setting up an Ethereum validator node.

    Cool concept and great read @Bob Hawkes
     
  17. Jimmysun

    Jimmysun Established Member

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    I love .zil .crypto. they have their own main chain everything are linking together.
    Am I being misunderstanding that to own a name in Namebase is not decentralized like .crypto because I can't see where to store my private key...It's like a normal crypto exchange functionality?


    It's not even "my" wallet.
     

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    Last edited: Feb 15, 2021
  18. Super-Annuation

    Super-Annuation eMoneyToken -Superannuation - Brekky - SuperFunds

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    I'd stick with the CoinBase wallet champ. I definitely agree with you, .crypto and .zil are brilliant.

    - Pay once for a domain
    - Pay a small one time gas fee to host on IPFS, seamlessly.

    No need for the whole node business, which does come with it's control benefits admittedly.

    I have

    Cannabusiness.crypto

    Charizard.crypto

    And about 10 more I don't want to share here in fear of devaluation.

    I also have many .eth wallet/domains (they're used for both.)

    - Datum.eth

    - Botany.eth

    - Financially.eth

    - HomeFinance.eth

    - Lazer.eth

    - DPoS.eth

    - Volcom.eth

    - Elope.eth

    - DistributedLedgerTechnology.eth
    (This one is my favourite, and never being sold.)

    + Like many more that are 5L just because I see them as a status symbol.

    I also bought a suffix

    - ization.eth

    So

    Global.ization.eth

    Token.ization.eth

    Legal.ization.eth

    Organ.ization.eth


    You get the picture lol.

    Yes, On-Chain names are going to be brilliant!
     
  19. jim h

    jim h Upgraded Member Gold Account

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    Great article. Thank you, sir.
     
  20. HotKey

    HotKey Made in Canada VIP

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    The / tells the browser to look outside it's own search (else the domain might default to closest match, eg. .com) to resolve the domain name. But with a DNS resolver the domain will still resolve with either a dot or a slash at the end.

    I like the slash to delineate handshake or other decentralized domains like .crypto from regular ones, in terms of showcasing or discussion.
     
  21. Compassion

    Compassion Celebrate Life PRO VIP Gold Account ★★★★★★★★★★

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    Thank you for the share,
    Valuable insights.
     
  22. Mytz.com

    Mytz.com Top 4L [email protected] ieie.com CuTu.com NeSu.com QAMI.com PRO VIP Gold Account

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    Thanks for you sharing !
     
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