If you’re doing anything in the crypto or NFT space it’s hard to ignore two domain trends that have recently really gained steam, as the title says, I’m talking about .eth and Y.at. These are both very different things and in this article I’ll focus on .eth.
.eth has taken off because sharing your Ethereum wallet address is a bit like sharing an IP address, it’s hard to remember and a simple typo means someone literally sends money out into the ether. So to make things easier, people have wanted a way to give someone a human readable wallet address rather than a long string of letters and numbers.
On Twitter, not a day goes by now where someone isn’t talking about .eth or trying to figure out what the heck it is and why they need it. Here’s a good thread from yesterday:
As you can see, people are tying to figure it all out, but I think the top answer is the best, right now people are buying .eth domains because they are cheap and convenient. There hasn’t been a strong demand for people spending thousands or tens of thousands of dollars on .eth domains, hence, it might not be a great market to invest in, they might just be a handy domain extension to use for your Ethereum wallet, and there’s nothing wrong with that!
Before I go any further I think it’s important to understand the basics of ENS. Just like DNS is used to go from an IP address to the domain names we know and love today, ENS is used to do the same but for the Ethereum blockchain, here’s the dets:
Unlike visiting websites, where if you mess up the IP address you can retype it again with no consequences; if you mess up the crypto address, you can lose the transferred amount. What’s worse is that now the recipient is angry because he did not receive the payment, and now the sender is broke.
The Ethereum Name Service (ENS) is a distributed, open, and extensible naming system based on the Ethereum blockchain.
ENS is a lookup system that converts the long unreadable address to something like
shubhpatni.eth(you can actually send some eth there 😉). So, you can send ETH or any other cryptocurrency registered by the recipient to this address, and it will automatically send the money to the desired crypto account.(Source – Level Up Coding)
This makes a lot of sense right? If someone wants to send me ETH I can just give them my .eth domain name and poof, we’re off to the races. While there’s no doubt that .eth is a pretty logical name for the domain extension people would use for their Ethereum wallets, I think a lot of people miss the fact that you can use a wide range of domain extensions with ENS like .xyz, .club, and more.
Right now there seems to be a lot of confusion in the crypto world, maybe some of it comes from fud, and the rest from just general confusion but I think a lot of people believe that the .eth domain extension is the only one that works with ENS and well, that’s just not true.
I’ve seen people posting on Twitter quite a bit lately that you have to get your .eth domain or that you should be stock-piling .eth domains because their value is going to the moon, and well, I think that’s more hype than reality. Sure some people will get lucky and sell a name here or there but if you look at the top domain names sales every week, it’s mostly .COM and lately we’re seeing .IO and .CO make their way into the top ten list. For example, here’s the top ten domain sales last week compliments of DNJournal:
As you can see, the top four domain sales are all .COM with Exodus.com taking the cake at $1.945M. Until we start to see regular .eth sales the reality is there might not be a huge aftermarket for these domains. Most people I know who bought .ETH domains hand-registered their names so an appetite for paying thousands or tens of thousands of dollars for .eth domains might not pan out.
Now all this being said, I’m not saying that I don’t like .eth, someone actually gifted me linton.eth which I thought was pretty cool. I think a lot of people will use domain names as an easy way to share their wallet and .eth is a pretty solid extension when it comes to Ethereum wallets. So for now if you snagged a .eth domain you love, congrats, use it, but I wouldn’t go crazy buying .eth domains as that money could be much better spend on .com domains or ETH itself which both have a lot more proven investment potential.