One of the major benefits of Web3 is that ownership of the internet is finally transferring to the users. That is, as long as you own your NFT domain.
NFT domains, the naming method used in the place of the difficult-to-remember Web3 addresses, provide a brand complete ownership over their blockchain assets and data. This is similar to how DNS records are associated with specific IP addresses.
Much like the .com era, NFT marketplaces have begun minting a variety of NFT domains such as .metaverse, .chain, and .web3. Investors are already snatching up these NFT domains and some companies are left unsure of which domains are most important and what they need to do to protect their brand in the Web3 space.
Let’s now dissect the seemingly complicated concept of NFT domains and dive into their benefits so you can understand the superpower behind owning NFT domains.
What are NFT Domains?
NFT Domains are a new generation of web extensions that works on similar principles like .com, .net or .info and which is launched as a smart contract on a public blockchain. A few examples of available extensions include .x, .crypto, .wallet, .Bitcoin, .888, .nft, .blockchain, .bnb and .DeFi among others.
Unlike regular domains stored on a server, NFT domains are stored in a crypto wallet, and they exclusively belong to the owner. And similar to the traditional ones, you can host NFT domains on a platform like WordPress and use it to create a website. Once you’ve bought an NFT domain, you receive a smart contract to prove that it’s yours for life. There are no renewal fees, and no individual or company can seize it.
How NFT Domains Work
It’s easier to understand the mechanics of how NFT domains work if you understand what NFTs are. In most cases, an NFT is a form of a Title Deed for digital objects. NFTs are unique, digitally protected objects such as digital art. For example, artists can create NFTs for videos or GIFs and sell them, including individually defined associated rights.
NFT domains use this same kind of technology. The blockchain safeguards all information about a domain’s owner in addition to domains or website content. And since the NFT domain is stored in a digital wallet like NFTs and cryptocurrencies, it stays independent of the internet or third-party providers – this is called self-custody.
Self-custody is perhaps among the essential aspects of NFT domains. The self-custody feature gives NFT domains superpowers that you can’t get with traditional domains. Making your domain decentralized gives you total control over your domain. What makes NFT domains unique is that they’re a single NFT combining two key ideas – a crypto wallet address that can also function as a website domain.
DNS vs. NFT Domains
Traditional domains and the websites they represent are hosted on servers that have addresses associated with them called IP addresses. Your browser automatically figures out these addresses because they’re registered in the Domain Name System (DNS), with a central authority called the Internet Corporation for Assigned Names and Numbers (ICANN).
The greatest challenge with ICANN and DNS is an extremely powerful centralized authority that brings annoying issues like:
- Censorship: ICANN can take down domain names it feels are inappropriate for numerous reasons, including propaganda.
- Permanent Ownership: You’re never the actual owner of the domain name since you merely rent for a limited specified period.
- Fraud: Centralization is associated with single points of failure, and there’s always the risk of being defrauded or hacked.
NFT domains exist on the blockchain so they avoid this centralized authority, giving you more control over your domain.
Potential Use Cases for NFT Domains
As Web3 reaches greater levels of adoption, it is important for companies to protect their brand and provide a simple way for customers to interact with them. NFT domains can help simplify crypto transactions by replacing complicated wallet addresses. They also allow you to create websites and NFT marketplaces which you have complete control over. Here are some current use cases for NFT domains:
Content creators can use NFT domains to reclaim control and ownership of their online identities. Instead of relying on social media platforms, you can use blockchain technology to host your digital content on the decentralized web. That means only the creator can remove content on social media platforms and not any third party besides owning your data and analytics.
Companies could use NFT domains to host their websites and mitigate many challenges associated with traditional domains. These include being bound to unfavorable terms and conditions, domain companies reclaiming websites, and paying recurrent hosting fees.
Artists and other NFT creators can use NFT domains to digitize their art and have a platform to display, sell or auction their work. NFT domains make it easy for brands to build an NFT marketplace and offer a seamless process that is beneficial to the artists and buyers. There’s also the potential in the future to display NFTs in virtual museums via VR integration.
What Does the Future of NFT Domains Look Like?
NFT domains are potentially a big deal since they’re already offering a foretaste of the possibilities that Web 3.0 could offer. Web users and content creators can now easily reclaim ownership of their websites and online content from overzealous centralized corporations.
However, we’re still at least 5-10 years away from fully realizing the benefits of NFT domains. While controlling your domain on the blockchain offers more control and eliminates the influence of central authorities like ICANN, governments still control internet access. While NFT domains are an important step, we’re still down the road a bit from a truly decentralized internet.
The bottom line is that if your company is planning on entering the Web3 space in any capacity, you should absolutely take control of your NFT domain now before someone else does. The small investment in your company’s blockchain future will pay big dividends as we move forward.