A new crypto land seizure

When NFTs first appeared in the public consciousness, the idea behind them was a bit strange. Here are those crypto ownership certificates attached to pictures of bored monkeys or videos of Kevin Durant in the field, but they haven’t given anyone the copyright to those specific media. Nonetheless, they took off, tens of thousands being traded every day. Now, there is a new object of hype in the crypto world: .eth domain names, an address that people can use exclusively on a crypto-based internet, beyond the reach of your typical browser. (It may not be by chance that they are linked to NFTs; domains can be used as a place to show off crypto holdings.) The race to acquire Ethereum Name Service domains is reminiscent, at smaller scale, that of .com names in the early days of the Internet. Many buyers try to grab as many primary addresses as possible, hoping to resell them for a lot more money.

This month alone, more than 71,000 domains were newly created on the Ethereum name service – its biggest month ever, dating back to 2017. The rush to buy has created thousands of new potential digital owners – some of which have collected hundreds of domains. The bump was aided by Silicon Valley celebrities like Balaji Srinivasan and real celebrities like Ashton kutcher, who both used Twitter to promote the domains. At OpenSea, a large NFT marketplace, amazon.eth is currently on sale for almost $ 1 million, while Nike.eth is listed for over $ 4 million. Recent sales include adele.eth for around $ 6,000, radiologist.eth for $ 4,000 and boy.eth for $ 65,000. On Discord, the favorite chat app of the gaming and crypto communities, an ENS domain server is inundated with people trying to offload batches of less impressive names, like pussylord.eth for around $ 200 before transaction fees.

Perhaps the most notable sale in the current frenzy has been paradigm.eth. The address would be a good landing page for Paradigm, the venture capital fund that recently overtook rival Andreessen Horowitz for the largest crypto fund, a pool of $ 2.5 billion it intends. invest in companies that use this technology. But someone else recently bought it for $ 1.5 million in ethereum, a cryptocurrency that trades for around $ 4,300. When I contacted the company about this, Jim Prosser, a spokesperson, replied, “¯ _ (ツ) _ / ¯. “

Cybersquatting is by no means a new phenomenon. The United States passed a law against this in 1999 as a result of the dot-com version of what is happening today, although there are fair use exceptions when people are not taking advantage or don’t use it as a parody. The group behind the domains, Ethereum Name Service, is also against this practice. “We are explicitly anti-squatting, and we have been for years. We think people say, “I’m going to get the celebrity and brand names, and I’m going to hold out for millions,” we think that’s stupid, “said Brantly Millegan, director of operations for domains ENS, at Intelligencer. “It’s just extortion – it’s just pure extortion.”

Squatting aside, domain investors argue, they are much more valuable than a simple payment from a business or celebrity. “They are trying to use domains as a bridge between cryptocurrency wallets and the rest of the Internet,” Dr. Milton Mueller, professor at the Georgia Institute of Technology School of Public Policy and author of Leading the Root: Internet Governance and the Taming of Cyberspace, said Intelligencer. Domains are built on ethereum, the second largest crypto project after bitcoin. Ethereum is a lot of things, but it’s mostly a kind of decentralized global computer on a blockchain. As such, it is the most popular platform for various crypto applications including NFTs and Decentralized Finance (or DeFi).

Unlike typical website domains, those registered through ENS are not recognized by the Internet Corporation for Assigned Names and Numbers, which means most browsers do not automatically support addresses. Rather, they work for cryptocurrency wallets, special websites, and browser extensions. They also come with a smart contract, giving the holder sole ownership of the name for a period of time (ENS domains expire but are available for over 100 years if desired).

Domains function as a kind of public wallet, a place where you can keep NFTs and cryptocurrencies. But they can also serve as a personal login ID, similar to what many people use Google on the internet. For people who enthusiastically buy and use domains, this is an early but exciting example of the promise of a new internet – lately the terms metaverse and Web3 have understood to describe this vision – which is not dominated by tech giants like Facebook. “This is a username and profile for the Internet. There is no company involved, ”Millegan said. “You have your username and your account. So that’s one less thing any department can lock you into.

Yet, for now, the main draw for most buyers seems to be in the quick money from the resale. The prevalence of the practice has divided the community, with some explicitly coming out versus this, while others argue that this is the raison d’être of capitalism. In one case, the decision of whether or not to squat varies for the same person. Will Brown, a Miami attorney, went out of his way to register the copyright for GeoCities – formerly owned by Yahoo! – as well as to buy the corresponding .eth address with the project of creating a community there. But he also recorded Draft👑.eth, believing it to be probably fair use as long as he doesn’t try to trick people into believing that this is in fact the online games company Draft. Kings. “I don’t know of any case where a company has attacked their brand name. I think it would be a new case, ”said Brown. “If they came out and asked me, I would probably give it to them. I have a few more that I have contacted with companies and tried to give them. No one is even accepted.