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New waves: Ethereum domains and everything you need to know

We are in the world of continuous globalisation: things continue to change as new markets emerge. For those that have an eye for innovation, they identify these new markets and key into it immediately before it becomes a popular business. No doubt, the block chain technology and the creation of Bitcoin are innovations that tend to escape the gaze of an average investor/entrepreneur if only Satoshi Nakamoto did not expose the possibility. One of the recent  innovations in the crypto industry is the Ethereum domain. You might have come across names that have ‘.eth’ attached to them. This article gives an insight into what you need to know about the Ethereum domain. Let’s dive straight in. 

What are Ethereum domains?

Also called Ethereum Name Service (ENS) introduces human-readable names to the Ethereum ecosystem.  The Ethereum Name Service (ENS) names are identical to the DNS addresses we use today, with ‘.eth’ being the only top-level domain (TLD) currently available.

An Ethereum address appears to be a string of mixed case letters and digits, but it conceals a private key that can only be used to spend or send ether by the owner of that private key. Contracts and other programs all have a unique address. This is referred to as a hexadecimal address (or hex). That hex is a long string of mixed case numbers and letters that looks like this: 0xBq13B846F5aB247qW0ac3

As you might guess, manually typing this is a hassle, especially when the chances of making an error are significant. When compared to Coinbase, Paypal, or Venmo, you can send money to anyone simply by entering their email address or login.

ENS avoids the need for large hexadecimal addresses to be copied or typed. This means that you will be able to send tokens to a friend at ‘iyin.eth’ instead of typing the long strings of address. Interact with a smart contract at ‘mycoolcontract.eth’ or even the ability to contribute to a project at ‘coolnewstartup.eth’

Traditional Systems are less secure than ENS.

Because ENS is based on smart contracts on the Ethereum blockchain, it is free of the insecurity that plagues traditional systems. Users can rest assured that names entered will function as intended by their owners. For both infrastructure and governance, ENS uses a distributed model. Anyone can register a .eth domain name for themselves by taking part in a blockchain-mediated auction process.

Is a new market emerging?

 Even though we are still in the early stages of this new market, it is apparent that ENS Names are becoming increasingly valuable and may continue to rise in value as Ethereum becomes more generally accepted.

Given the increasing value of ENS names, a trustless and decentralized solution will be critical for those seeking to avoid the third-party risk associated with these high-value transactions.

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