With solution providers such as Unstoppable Domains or Handshake, and blockchain technology-friendly browsers, such as Brave, that are more than happy to assist on the implementation front, decentralized alternatives to the traditional Domain Name System has been receiving more and more attention lately.

Centralized vs. decentralized… what will it be?

The stakes are sky-high in light of the fact that we are dealing with internet real estate rather than a marginal component of our online experience.

Furthermore, this debate is hardly new in the cryptocurrency ecosystem. NameCoin is one of the oldest alt-coins in existence, launched in 2011. NameCoin aimed to provide a decentralized alternative to the DNS. Unfortunately, Namecoin failed to provide a viable DNS alternative at scale for reasons that will be covered in our next article on the dark side of decentralized domain names.

But what is a decentralized domain name system anyway?

The name itself makes it clear that we are dealing with a domain name system where no centralized point of control, or of failure, exists. Or, at least that is the main goal.

In the traditional centralized DNS:

1. The Internet Assigned Numbers Authority (IANA) is in control of the single, authoritative root.
2. The Internet Corporation for Assigned Names and Numbers (ICANN) is in charge of managing IANA
3. ICANN then delegates the management of specific TLDs in the root to various registries, for example, Verisign for .com.
4. The registries authorize companies called registrars to sell individual domain names to customers

Perhaps the easiest way to understand the limitations of traditional centralized DNS involves censorship. Let us assume Person A runs the highly controversial WebsiteA.com. To do so, she needs to buy the domain name WebsiteA.com through a registrar and point it to the servers of a Web hosting provider he pays to store the files necessary for the website to function. Simply put, she needs a domain name and a website, then she is good to go.

Person A then keeps posting controversial content, with hundreds upon hundreds of people complaining about the nature of said content… usually to his Web hosting provider.

At this stage in the game, we kind of have a decentralized framework when it comes to hosting because Person A can back up her data and should his current Web hosting provider close her account and delete all files, she can always upload them to the servers of a new company. If that provider also proverbially pulls the plug, she can choose a different company and so on. With a wide range of hosting options being available across numerous jurisdictions, a fair case could be made that we are indeed not in the realm of centralized points of failure. We saw this occur to the greatest extent possible when the beyond controversial Parler social media site was banned from their registrar and web hosting services due to content inciting violence.

But only as it pertains to hosting:

When it comes to domain names, the situation is different. Complaints sent to Person A’s registrar could lead to the registrar deciding to suspend the WebsiteA.com domain name, thus rendering it unusable and forcing Person A to switch to another domain. This could be catastrophic for a business. This would involve a fair bit more hassle, financial damages and issues in terms of user-friendliness compared to a Web hosting provider switch. From a domain investor experience, we saw first-hand what one party who felt slighted could do to a multi-million dollar portfolio when GoDaddy locked an entire domain portfolio due to a questionable legal complaint over a claimed breach of contract having nothing to do with the actual domain portfolio, the names, or web content. (see, https://www.thedomains.com/2021/03/06/brent-oxley-godaddy/)

To switch hosting providers, Person A simply uploads the same files to a new server and changes the DNS records in the domain nameservers so as to point WebsiteA.com to the new host. Other than perhaps some downtime caused by DNS propagation times, WebsiteA.com visitors would not notice any turbulence. In stark contrast, should the domain WebsiteA.com be suspended, it would be impossible not to notice. With them having to find out about the new address of said website through other communication mediums such as social media… a logistical nightmare.

Needless to say, there are valid reasons why decentralized solutions can seem appealing, with advantages such as:

1. The aforementioned censorship resistance since there is no one to whom to complain to about a decentralized domain name. That provides good freedom of speech protection but little in the way of recourse against those who publish the absolute worst kinds of content. Working at a registrar for almost seven years, there is some revolting illegal content that we stopped that came through the abuse queue. I was happy we were able to do it.
2. The fact that in some cases, it is possible to simply make a one-off payment and retain ownership of a decentralized domain name indefinitely. With Unstoppable Domains making it possible to pay as little as $20 and never have to worry about renewal fees. Handshake domains, on the other hand, are subject to renewal fees and have a more complex approach to allocating domains, such as domain auctions in which interested parties can bid through the HNS coin that is generated when new blocks are added.
3. The potential anonymity involved. However, the main caveat is that in a public ledger framework, the term “pseudonymous” would perhaps be more appropriate. In many cases, it is possible to track down those behind a transaction. Still, decentralized domain names provide enhanced anonymity potential in comparison to their centralized counterparts, even relative to existing options for traditional domains such as WHOIS privacy.
4. The security dimension. For example, valuable domain names have oftentimes been lost due to social engineering or essentially criminals posing as the rightful owner of a domain and managing to transfer it away. The same way, there can be other options with respect to compromising central points of failure, such as registrars, for example, hacks and weaknesses in their code. In contrast, tampering with anything blockchain-related is not orders of magnitude more difficult, with risks arising from user errors such as losing private keys more so than fraudulent activity

There are other advantages in addition to the four above, but they illustrate ways in which decentralized domain names represent an alternative worth being taken into consideration. But, they are not without disadvantages, which we discuss in our companion article on the dark side of decentralized domain names.