The crypto world is buzzing about .eth but do they make good domain investments?

ENS Decentralized Naming

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:

.eth domains Twitter
.eth domains Twitter 2

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:

Top ten domain sales
Source – 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.

{ 7 comments… add one }

  • Logan June 17, 2021, 11:00 am

    It’s very difficult to buy.

    app.ens.domains doesn’t use exchange-linked wallets like Coinbase, Kraken, etc.

    Maybe I’ll buy mine at some point when it’s more convenient.

    Reply
  • Don June 17, 2021, 11:49 am

    No so much imo. I would rather own something that is more comprehensive. Eth is like owning .travel or .hotels it is not broad enough.

    Owning an extension like .crypto or even .c would be better because you could have a wallet that accepts eth, btc, and the other 100 cryptos.

    But regardless the haters will come out and say it’s all a ponzi scheme, yet the largest portfolios holders in the world with .com own these type of names. My prediction a new browser comes out that is owned by the people that you can be part of via tokens and share in profit. Think helium network.

    Reply
  • Gary Palmer Jr. June 17, 2021, 1:46 pm

    LOGAN: Waiting to Buy When it’s More Convenient = Buying Too Late + Your Name is Not available Anymore!!

    DON: ENS is a technological protocol;
    the system with the greatest network effect will win,
    which is ENS (IMHO), with the greatest integrations & relationships,
    …which also, ENS was first to market, too.

    Reply
  • Logan June 18, 2021, 9:35 am

    GARY: Not sure I care at this point, really.

    Reply
  • Andy June 21, 2021, 8:04 am

    Coinbase Wallet connects seamlessly to ens domains (app.ens.domains. It literally takes two minutes to buy an ens domain that way – coinbase wallet though remember – not coinbase or coinbase pro. All your domains are then stored as NFTs within the browser and are linked imediately to Opensea if you want to start selling. Good luck, I’m not technical and it took me about 15 mins to work it out using a step by step youtube video. It’s well worth it. Best of luck.

    Reply
  • Logan June 21, 2021, 2:25 pm

    I use Coinbase Wallet. It’s not an option listed at app.ens.domains. On mobile, app.ens.domains does not work – clicking on “Notify Me” and/or “Request to Register” does nothing, this is true even with Coinbase Wallet already open on my phone. On web, there are only six wallets from which to choose: WalletConnect, Portis, Torus, Authereum, MEW Wallet. I’ve never heard of any of them and I’m too lazy to create and use a new one.

    Reply
  • Aaron June 23, 2021, 11:27 pm

    I think the data on .eth sales might not be well collected by DNjournal.

    Here is a site I used to track top sales: https://opensea.io/assets/ens?search%5BresultModel%5D=ASSETS&search%5BsortAscending%5D=false&search%5BsortBy%5D=LAST_SALE_DATE

    Having said that, the market is really very new and uncertain. On average, 1-3 .eth domains are sold, which is a very very small number.

    Reply

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