Finance:Namecoin

Namecoin
Denominations
Plural	namecoins
Symbol	ℕ
Ticker symbol	NMC
Subunits
​1⁄1000	millinamecoin
​1⁄1000000	micronamecoin
​1⁄100000000	swartz
Development
Project fork of	Bitcoin
Website	namecoin.org
Ledger
Ledger start	18 April 2011 (2011-04-18)
Timestamping scheme	Proof-of-work (merged mining)
Hash function	SHA-256
Block time	10 minutes
Supply limit	ℕ21,000,000

Namecoin (Symbol: ℕ or NMC) is a cryptocurrency originally forked from bitcoin software. It is based on the code of bitcoin and uses the same proof-of-work algorithm. Like bitcoin, it is limited to 21 million coins.

Namecoin can store data within its own blockchain transaction database. The original proposal for Namecoin called for Namecoin to insert data into bitcoin's blockchain directly. Anticipating scaling difficulties with this approach, a shared proof-of-work (POW) system was proposed to secure new cryptocurrencies with different use cases.

Namecoin's flagship use case is the censorship-resistant top level domain .bit, which is functionally similar to .com or .net domains but is independent of ICANN, the main governing body for domain names.

Transactions

A peer-to-peer network similar to bitcoin's handles Namecoin's transactions, balances and issuance through SHA256, proof-of-work scheme (they are issued when a small enough hash value is found, at which point a block is created; the process of finding these hashes and creating blocks is called mining). The issuing rate forms a geometric series, and the rate halves every 210,000 blocks, roughly every four years, reaching a final total of 21 million NMC.

Addresses

Payments and records in the Namecoin network are made to addresses, which are Base58-encoded hashes of users' public keys. They are strings of 33 numbers and letters which begin with the letter N or M. Initially addresses beginning with 1 existed but this was changed to avoid confusion with Bitcoin addresses.

Records

Each Namecoin record consists of a key and a value which can be up to 520 bytes in size. Each key is actually a path, with the namespace preceding the name of the record. The key d/example signifies a record stored in the DNS namespace d with the name example and corresponds to the record for the example.bit website. The content of d/example is expected to conform to the DNS namespace specification.

The current fee for a record is 0.01 NMC and records expire after 36000 blocks (~200 days) unless updated or renewed. Namecoins used to purchase records are marked as used and destroyed, as giving the fee to miners would enable larger miners to register names at a significant discount.

Uses

.bit is a top-level domain that was created outside the most commonly used Domain Name System (DNS) of the Internet, and is not sanctioned by the Internet Corporation for Assigned Names and Numbers (ICANN). The .bit domain is served via Namecoin infrastructure, which acts as an alternative, decentralized domain name system.

Proposed potential uses for Namecoin besides domain name registration include notary/timestamp systems.

.bit domains have long been used to host malware. In July 2019, Namecoin's .bit namespace was dropped from OpenNIC. OpenNIC cited rampant abuse of .bit domains for purposes of malware and child pornography.

History

In September 2010, a discussion was started in the BitcoinTalk forum about a hypothetical system called BitDNS and generalizing bitcoin. Gavin Andresen and Satoshi Nakamoto joined the discussion in the BitcoinTalk forum and supported the idea of BitDNS, and a reward for implementing BitDNS was announced on the forum in December 2010. In June 2011, WikiLeaks mentioned the project via Twitter.

On block 19200 Namecoin activated the merged mining upgrade to allow mining of Bitcoin and Namecoin simultaneously, instead of having to choose between one or the other; this fixed the issue of miners jumping from one blockchain to another when the profitability becomes favorable in the former.

Two years later, in June 2013, NameID was launched. NameID allows to associate profile information with identities on the Namecoin blockchain, and an OpenID provider to allow logging into existing websites with Namecoin identities. The main site itself is accompanied by an open protocol for password-less authentication with Namecoin identities, a corresponding free-software implementation and a supporting extension for Firefox.

In October 2013, Michael Gronager, main developer of libcoin, found a security issue in the Namecoin protocol, which allowed modifying foreign names. It was successfully fixed in a short timeframe and was never exploited, except for bitcoin.bit as a proof-of-concept.

Namecoin was also mentioned by ICANN in a public draft report as the most well-known example of distributing control and privacy in DNS.

A 2015 study found that of the 120,000 domain names registered on Namecoin, only 28 were in use.

Blockstack co-founder Muneeb Ali on 12 September 2015 at the Blockstack Summit 2015 stated that the Namecoin network is not decentralized and the mining group Discus Fish controls 60-70% of its hashing power.

See also

• Alternative DNS root
• Zooko's triangle