discuss When will the market reach over-saturation with all of the buyouts?

[Michael M]

With the current runs on 4L, 6N, and now 5L and 7N and 8N and also these in other extensions than .com...

Do you believe the market will become over saturated with the influx in inventory in the aftermarket? Or do you think that there are enough new players in this market to keep this going?

Anyone care to share their thoughts on how this all will unfold, and when at what point people might be left holding bags of worthless domains?

Will the worst 4L.com always have value (I think so). Will their values drop with the numeric influx or will this just keep driving the price up?
Is the 5L.com rush taking it too far?

Will even the worst 6N retain a floor above reg fee? If so where do you see the floor settling?
Will the most prime 8-12N gain and retain value?

Will all of this come crashing down from the massive inventory that is building in the aftermarket?

Thanks,
Mike

 

[mech35]

I personally believe that all 6N will stay at their current state. That will also happen for good 4L.net and good 7N. I think all the other domains must have great patterns to stand out. This will happen only if the Chinese suddenly stop buying domains and return to their stock market. But if they don't ,we may even see 9N patterns price raise.

 

[Mahogany]

I think the majority of people do not understand these buyouts. The Chinese are buying domains to be able to move currency over the world without government regulation and control. Premiums and patterns increase the value of certain domains..... But rest of 5n, 6n ,7n, Etc will always have some type of value. Not to end users or for future websites but simply because it's a form of crypto currency now. Instead of gold and silver a lot of chinese are investing in domains for the long haul. They don't have to be stored and can transferred all over the world with no regulation.

This not a bubble or trend..

 

[Recons.Com]

The only problem is that to serve as crypto currency two conditions have to be met:
- commoditizing (this they successfully achieve by getting uniform pricing based on patterns. For westerners, specific combination was important, now bqzw is pretty much the same as zqyb)
- minimum price where renewal price is so small it is just transaction cost basically. So they make sure the chosen commodities get to price levels in xxxx to keep renewal 1% or less annually. To make this, they have to make cutoffs like no a,e,o,u,v or no 0 and 4 and have everybody buy into it. And that is why such a huge difference between cojx that I bought for low $xxx on days and something like czjx which is worth now $2K+.

 

[Mahogany]

The only problem is that to serve as crypto currency two conditions have to be met:
- commoditizing (this they successfully achieve by getting uniform pricing based on patterns. For westerners, specific combination was important, now bqzw is pretty much the same as zqyb)
- minimum price where renewal price is so small it is just transaction cost basically. So they make sure the chosen commodities get to price levels in xxxx to keep renewal 1% or less annually. To make this, they have to make cutoffs like no a,e,o,u,v or no 0 and 4 and have everybody buy into it. And that is why such a huge difference between cojx that I bought for low $xxx on days and something like czjx which is worth now $2K+.

Agree. I did not elaborate of some of the variables due to my limited expertise, however my premise is accurate. There are exceptions and the sementics/details of the pricing fluctuations cannot be pinpointed yet, due to investors, prospectors, speculators etc. Nobody can explain it with 100% certainty. Not yet anyway.

However, even the most basic short domains will always hold value from here on out. Calling domains a crypto currency may be dumbing it down too much but in a sense that's what it's become. I'm sure some new phrase will be created shortly.

 

[Recons.Com]

Imagine someone in communist China who has $1M that could be confiscated over night. So he buys 500 LLLL.coms thinking that if it goes to 3K a piece, great, if it falls to 1K still ok, as I will have 0.5M that cannot be taken away from me.

 

[Michael M]

For this to work as a crypto currency there will need to be a roof on the domain expansion, correct? Or the values will drop as buyers are spread between all of the available types of domains which are exponentially growing with each new digit added onto a domain. Will the market not outgrow available buyers at any point in the near future? Or is there truly this much demand in China for an alternative to current markets?

 

[kemjika11]

Imagine someone in communist China who has $1M that could be confiscated over night. So he buys 500 LLLL.coms thinking that if it goes to 3K a piece, great, if it falls to 1K still ok, as I will have 0.5M that cannot be taken away from me.

It's only in "communist china"the govt seizes money right? Ok.

 

[Recons.Com]

Nope. Just in the communist states it happens that private property is not much respected... As well as in dictatorships etc. But usually the others don't grow wealthy. China is an exception where communism and country wealth managed to coexist.

 

[Recons.Com]

For this to work as a crypto currency there will need to be a roof on the domain expansion, correct? Or the values will drop as buyers are spread between all of the available types of domains which are exponentially growing with each new digit added onto a domain. Will the market not outgrow available buyers at any point in the near future? Or is there truly this much demand in China for an alternative to current markets?

Roof can occur naturally. You go to next expansion, you increase the available inventory by 20 (letters) or 8 (numbers). So value would be around 1/20 or 1/8 or of the previous one. If that is large enough to support renewal fees, then you have floor formed and it will work as smaller change. If not, the thing will collapse for this level of expansion.

 

[Name Trader]

I think the majority of people do not understand these buyouts. The Chinese are buying domains to be able to move currency over the world without government regulation and control. Premiums and patterns increase the value of certain domains..... But rest of 5n, 6n ,7n, Etc will always have some type of value. Not to end users or for future websites but simply because it's a form of crypto currency now. Instead of gold and silver a lot of chinese are investing in domains for the long haul. They don't have to be stored and can transferred all over the world with no regulation.

This not a bubble or trend..

Whilst I agree with almost everything you said. I disagree with your last sentence. This is a trend which will continue, because the numbers and motivation are behind it's continuance. Is it a bubble? Well it might not be a perfect bubble at the moment, but if it is a continuing trend, it will turn into a bubble, if it is not one already. The Chinese are huge risk takers (gamblers) by nature. They have turned their stock and property markets into bubbles, which have crashed. They are looking for these kinds of returns in this domain bubble. They have no intention of actually building any websites on the domains they buy. They are also not long-term investors by nature. After the buyouts have abated, they will continue to churn these domains between themselves, until somebody is left holding the baby. Then crash. This could happen at any time. In my opinion, it is about 3 years away. It will do no good for those holding the baby when the crash comes.

 

[NameOmnia]

If it can definitely be true that they are investing to avoid taxation etc, has anyone considered the possibility that Chinese investors are actually doing what English speaking people have done since day 1 with domains?

I mean, China is opening up right? Also a gazillion Chinese leave outside of China so they know a lot about domain industry; isn't it possible that they are just buying with the idea to resell to their end users? Maybe their domainers are only beginning...it makes sense doesn't it?

 

[80-20]

By rapidly expanding domains' trade, the Chinese are creating a new CYBER CURRENCY and not a crypto currency.

 

[NameOmnia]

By rapidly expanding domains' trade, the Chinese are creating a new CYBER CURRENCY and not a crypto currency.

I wouldn't be surprised to see that behind all this money spent on domains there is actually the Government..

 

[Nazz]

Is it possible some Chinese use domains as a money laundering tactic ?

 

[Name Trader]

Is it possible some Chinese use domains as a money laundering tactic ?

Of course it is a possibility. It's probable too.