Tracking the world of decentralized finance

Celebrities like Jimmy Fallon, Paris Hilton and Snoop Dogg have recently acquired web3 identities on Ethereum.

Today, we will try to understand how internet naming systems are evolving and why the Ethereum Naming System (ENS) has gained widespread adoption lately.


Context of naming systems

The Internet is a worldwide network of computers that transmit data and media. Computers, by design, understand only numbers at the fundamental level. For instance, any website that ends with .com (or any other domain for that matter) is converted to a bunch of numbers called the IP address. For Google.com, it’s 216.58.217.206, the actual internet protocol address on the internet. Since it’s difficult to remember these numbers, we just enter “google.com” onto the browser.

Since the 1980s, the Domain Name System (DNS) has been an integral part of the internet. It acts like a phonebook, responsible for translating human-readable domain names into numerical addresses the computer understands. So, it was clear that the names of the network participants became vital to navigating the internet.


Pre-blockchain era

One of the drawbacks of the DNS system is its inability to achieve all desirable traits proposed by systems such as the Zooko’s triangle. Zooko’s triangle defines three desirable traits of a network protocol as decentralized, secure, and human-meaningful.

Prior to the advent of blockchains, systems could achieve only two of the three traits. For instance, DNS offers a human-meaningful and secure naming scheme but relies on centralized servers. Onion domains, reachable via Tor network, are secure and decentralized but not human-meaningful. Invisible network project (I2P), which is run through volunteers, guarantees security through local servers and provides human-meaningful names but fails to provide globally unique entities if run on a decentralized network.


Post-blockchain era

Blockchain solved Zooko’s trilemma by being immutable and decentralized. They offer a way to record data publicly without the need for an intermediary and the risks associated with it. Namecoin (2011) was one of the first domain solutions proposed as an alternative to the .com top-level domain but didn’t gain any traction. After several attempts, Ethereum Naming System (ENS) was launched in 2017. It was built with smart contracts on Ethereum and gained immense popularity as a web 0.3 naming standard. In the words of Ethereum’s co-founder Vitalik Buterin, ENS had become a decentralized phonebook.


Basics of ENS

Basically, a user can register .eth name on ENS without involving any centralized organization and hold custody of their .eth name using their wallet (like Metamask). It effectively becomes a web 0.3 identity which can be used to store text records, point to Ethereum (or Bitcoin, Litecoin etc.) addresses or even a website. So, for example, whenever a person X wants to send some ETH to Vitalik, instead of entering Vitalik’s entire ETH address that looks like

0xAb5801a7D398351b8bE11C439e05C5B3259aeC9B,

person X can simply enter

vitalik.eth

and complete the transaction. During its four years of evolution, over 8,00,000 names have been created. Celebrities like Jimmy Fallon, Paris Hilton, and companies such as Puma and Budweiser have acquired jimmy.eth, parishilton.eth, puma.eth and beer.eth respectively in anticipation of mainstream adoption in the coming years.


How to get an ENS name?

To buy an ENS name, a user needs to download a crypto wallet service such as Metamask and onboard some ETH (payable as gas fees for transactions). Non-custodial wallets like Metamask have an inbuilt option to buy ETH or users will have to buy it at an exchange and transfer the ETH to Metamask. Then, the user can visit the official site of ENS (ens.domains), connect the wallet to the site, search for the desired name and buy if no one has acquired it yet.

ENS has been the most-successful, non-financial application on Ethereum so far. It is currently governed by a decentralized autonomous organization (DAO) called ENS DAO. If it grows in adoption over the next few years, we will not be surprised to see ENS replacing DNS as the widely used system.

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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.