Posts tagged "NFT Domains"

What Are NFT Domains

Summary:

  • NFT domains combine two functions into one: a crypto wallet and a website domain
  • NFT domains utilize blockchain technology to provide more security and more control to users
  • NFT domains are surging in popularity much like the early internet boom however, NFT domains have more functionality than traditional Web 2.0 domains
  • NFT domains are changing the way the internet is used. This article will detail five popular uses for NFT domains.

Conventionally, web domains have been considered the most important pieces of digital property a user can own. However, traditional Web 2.0 domains have failed to adapt functionality to certain market demands.

Consequently, blockchain technology has filled that gap with NFT domains, which have seemingly endless applications in the digital space. The following sections will clarify the uses of NFT domains and detail how you can make your own.

NFT domains

NFT domains consist of a crypto wallet address that is connected to an NFT (Non-Fungible Token). As opposed to centralized data control, control is returned to the user or owner of the NFT domain. Because NFT domains are hosted on the blockchain, stored data and transaction information is publicly accessible. This level of transparency and verifiability outclasses conventional Web 2.0 domains.

Additionally, because only the user can control domain updates, potential attacks and data breaches are minimized. This enhanced security has attracted many users away from Web 2.0 domains and towards NFT domains.

Moreover, because NFT domains are not based on a renewal-fee model, users generally only need to make a one-time purchase. This eliminates any third-party control over the domain and prevents censorship or repossession of domain content by centralized authorities.

How do they work?

NFT domains provide various advantages over the traditional Web 2.0 domain model. The following is a summary of how NFT domains function:

Unique to the owner: Like any asset, you can purchase, sell or hold onto NFT domains just like an NFT security.

Wallet functionality: The address attached to the NFT domain functions like a regular crypto wallet and is capable of receiving and sending compatible currencies and tokens. Rather than arbitrary strings of numbers and letters, NFT domain wallet addresses are more intuitive and can be set by the owner to display their name or other relevant titles.

Domain functionality: Like wallet functionality, the NFT domain can also function exactly like a website domain, delivering a webpage to the user who types in the correct address.

5 uses for NFT domains

Content creation

NFT domains help creators to maintain control over their digital property and identity by eliminating the reliance on corporate third-party platforms. Centralized social media can be controlled and censored, whereas blockchain technology is decentralized and gives the user total control and ownership.

Essentially, platforms like Facebook and Instagram will have no control over content hosted via the blockchain.

This also allows creators to have full ownership of the data and analytics of their domain. Rather than siphoning data for free, tech companies may have to start paying to benefit from certain user data.

Professional domains

Companies are already exploring NFT domains as an alternative to traditional Web 2.0 technology. Businesses have started to recognize the benefits that NFT domains offer, including immunity to domain repossession, legal conditions, and the elimination of costly recurring fees.

Musicians

Traditionally, musicians have fought to maintain intellectual property rights in the digital space, often being exploited by third parties and having their profits reduced by hosting fees.

The use of NFT domains eliminates third-party control by providing an entirely independent platform that users can access to promote their music, create audio NFTs, and directly interact with community members.

Artists

Many artists seek to digitize their work to increase exposure and distinguish their work from other artists. NFT domains facilitate the display, auctioning, and selling of digitized art in an independent space. These marketplaces also provide streamlined payment via blockchain wallet transactions, which makes for a more enjoyable experience for both creators and investors.

Many artists are starting to use VR and AR as a medium for displaying their work. The use of NFT domains will allow artists to have full control over these exhibitions.

Online communities

Increasing censorship has made NFT domains attractive for communities and forums that want to remain free from corporate influence. By removing the reliance on centralized domains, discussions can remain free from corporate scrutiny and third-party censorship.

Conclusion

The surge in popularity of NFT domains indicates a shift away from traditional Web 2.0 and towards the new potential of decentralized domain hosting. As blockchain technology rises, decentralized content hosting could result in an ‘internet revolution’ in which content owners reclaim the rights to their digital property from centralized platforms.

NFT Domains: A Brief Overview

NFT Domains enable people to locate a specific site on the internet. With easy-to-remember names, an NFT domain connects users online for whatever products or services they wish to find. 

NFT domains are stored in public blockchains making crypto transactions easier by replacing the addresses of the digital wallets with names you can remember easily. By using their URLs for websites built through the InterPlanetary File System (IPFS), they also enable censorship resistance.  

NFT domains are much like the traditional domain names with some important features like no registration fees, simple digital wallet addresses, and access to cryptocurrency, blockchain, and Web 3.0.  

Reasons to buy NFT domains

Users are buying NFT domains in order to make their crypto transactions easier by replacing their digital wallet address with a more recognizable name. Also, NFT domains provide opportunities for profit from reselling them. 

Their value is usually determined by two key factors, Utility, and Scarcity. Obviously, the more used and more unique domains shall have more value to the user. 

Steps to buying NFT domains 

If you wish to buy an NFT domain, you should follow a few simple steps: 

  • First, sign up for a marketplace;
  • Set up your digital wallet;
  • Put cryptocurrency into your wallet;
  • Select an NFT;
  • Finally, Complete the purchase;

After you have successfully purchased your first NFT domain, you have to mint it on a public blockchain. Some services allow creators to mint their domains free of charge, Unstoppable Domains is one of them. 

However, not all platforms are free of charge for minting NFT domains. Additionally, you could be charged for transferring the NFT domain into a digital wallet, when creating a collection on a specific marketplace, or even when you list it for sale. 

Steps to creating NFT domains 

If you wish to create an NFT domain, you should follow a few simple steps: 

  • First, sign up in an NFT marketplace that allows minting domains; 
  • Come up with a name and search for availability;
  • Select an extension, such as .crypto, .bitcoin, .eth., etc.; 
  • Make payment for the domain; 
  • Mint the domain on a public blockchain – you could use Ethereum or Polygon. 
  • Transfer it into your digital wallet;
  • List if for sale – the platform will often provide instructions for it; 

Buying and Selling for profit 

Just like buying and selling tokens, you could also profit from selling domains. Just like with other assets. Buying low and selling high is the golden rule of investing in NFT domains. However, there are no guarantees, not all domains reach their potential value. 

What are the risks? 

  • Security on the market. If you wish to store NFT domains on a marketplace, make sure you carefully read the security protocols of a custodial wallet. If offered, you should enable two-factor authentication.
  • Scams are possible. Whenever you receive an email, support request, or embedded link claiming to be from the NFT marketplace, proceed with caution. You will never be asked for the personal information you haven’t already provided when signing up. 
  • You could lose money. The increase in the value of your NFT domain is not guaranteed and there’s no guarantee that it will remain the same.