Proposal: Domains should be regularly auctioned

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fresheneesz
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Proposal: Domains should be regularly auctioned

Post by fresheneesz » Mon Sep 22, 2014 10:11 am

The mainstream DNS system has a major problem: domain hoarding. Namecoin seems to provide very little that solves this problem. While namecoin has a small fee for registering domains, the fee is so small as to be negligible, and therefore is only slightly better than the current corrupt mainstream DNS system that allows domain hoarders to have domains essentially for free.

To combat this, I'm proposing an enforced public auction of domains that happens something like every 2 or 3 years for each domain. There are a couple important properties of the auction

* It should be enforced by the protocol (ie it should be inherent in the system that these auctions be honored)
* The current holder of a domain should be able to win the auction with a winning bid of more than only 1% of the highest 2nd-party bid. This is so that the cost of keeping a domain is related to demand, but is not a heavy burden on domain holders. For example, if the highest 2nd-party bid is 3 BTC/Namecoins, the current owner would win the auction with a bid of at least 0.03BTC/Namecoins.
* If the current holder of a domain wins the auction, they pay random active addresses in the blockchain (this is how registering domains in the first place should work too). Destroying the coins (which I believe is what namecoin currently does) seems like a destabilizing approach that could severely limit the system. Paying all active addresses would be ideal, but would almost definitely make the blockchain too large to handle.
* If a 2nd party in the auction wins, they pay the ex-current holder of the domain.

I realize namecoin may be too far-gone to actually implement this strategy, but I would appreciate people's thoughts about it anyway.

This discussion was ripped from github: https://github.com/namecoin/namecoin/issues/181 . So here are the replies so far:

-------------------

domob1812: Hi!
On 2014-09-22 01:39, fresheneesz wrote:
The mainstream DNS system has a major problem: domain hoarding. Namecoin
seems to provide very little that solves this problem. While namecoin
has a small fee for registering domains, the fee is so small as to be
negligible, and therefore is only slightly better than the current
corrupt mainstream DNS system that allows domain hoarders to have
domains essentially for free.
This comes up every once in a while, but I don't actually believe that
squatting is such a bad problem in Namecoin as it is usually portraied
to be.

As a little challenge, do you know of any
company/individual/organisation that has their name squatted, contacted
the squatter, and was refused to get the domain for a reasonable price?

I believe that most of the current squatters in Namecoin are mostly
interested in Namecoin's long-term success and would rather see a domain
used to expand Namecoin than sit on it in hopes of extorting a high
price. The problem is not squatters, the problem is that noone uses
.bit domains so far.
To combat this, I'm proposing an enforced public auction of domains that
happens something like every 2 or 3 years for each domain. There are a
couple important properties of the auction
...
This or something very similar has been brought up already in
discussions. While I can only state my own, personal opinion below, I
think to recall that others in the core community agreed with me (but
don't take my word for it).

I think that such a process is not good. One of the core principles of
Namecoin is that it is uncensorable and unseizable. Introducing such
"auctions" undermines this, as it introduces a way to effectively
"seize" a domain given enough resources. And even if the current owner
has a 100x advantage, this may not be enough if it is "David vs
Goliath", like a government agency who's trying to censor Wikileaks or
Piratebay or something like that. So from me that's a definite "no go".

Regarding "putting names to highest economic use" (as someone called
it), see my comments above. Additionally, IMHO that's not the first and
foremost goal of Namecoin. For companies, trademark holders and all
that, a centralised system like ICANN domains and trademark registries
is the way to go. Namecoin is there for free speech instead.
I realize namecoin may be too far-gone to actually implement this
strategy, but I would appreciate people's thoughts about it anyway.
That's not true. If there's an actual agreement among the community,
then it will be possible to implement changes (whatever they may be).
But I would strongly oppose the particular changes you propose for the
reasons outlined above, and believe that others will see it the same.

Yours,
Daniel

-----------------

JeremyRand:

Hi,

I agree with Daniel on all points, except this one:
"For companies, trademark holders and all that, a centralised system like ICANN domains and trademark registries is the way to go. Namecoin is there for free speech instead."
I'm of the opinion that most trademark holders will be able to use their trademarks in Namecoin without significant problems. They may have to get their name from a squatter, but quite honestly, in most cases a large company has far more money at stake in their Namecoin name than any other entity, and can therefore get control of their name if the squatter's motive is profit. E.g. even if I were a squatter only concerned with profit, and I weren't primarily worried about Namecoin's success, I still wouldn't be holding a single name hostage for absurd amounts of money, because my goal would be to make a net profit on all the names I hold, not hold out for a huge payout on one name. If I were a profit-motivated squatter holding d/google, and Google offered to buy it for $1000, which is nothing to them, I'd be satisfied and happily hand it over, because that's a pretty good profit for a registration that cost me under a dollar and only a few minutes of time. Google would probably be satisfied by such a sale too, assuming Namecoin was in high enough use that d/google could reach a large audience.

Now, in certain rare cases, someone will squat a name not for profit reasons but for specifically censorship or hijacking reasons. E.g., if I absolutely hate Facebook and just want to cause them grief, or if I want to hijack Facebook connections, I could register d/facebook and simply redirect all connections to my own server, which might either redirect to a Facebook competitor, or steal Facebook passwords. I generally think that these cases are best dealt with as a law enforcement problem and/or as a social problem rather than by introducing centralization. Here are some options available to Facebook if this happens to them:

1. If an IP address is linked to in the name's value, look up who owns the IP address and send them a legal threat.
2. If someone is operating a business using the name, organize a boycott of the business.
3. Educate end users that a domain name doesn't always correspond to the same-named business. This is already obvious in many cases: delta.com can't correspond to both the airline and the hardware company. And it's a logical position to take, in the same way that my name is Jeremy Rand, but if someone on the Internet mentions Jeremy Rand, they might be referring to me, or to someone else named Jeremy Rand. Gmail is reportedly having to deal with this, in the sense that computer-illiterates assume that their firstname.lastname@gmail.com must route to their inbox. But no one has filed a trademark lawsuit over such a collision (at least, I hope not).

A lot of the arguments against Namecoin made here are analogous to arguments made against other technologies that act as checks on power structures. Tor is widely demonized by the illiterate as being primarily used by pedophiles, even though according to Ahmia.fi, only 9 websites with even possible child porn were found among the many thousands of .onion sites which were spidered. Bitcoin is widely demonized as used for terrorist money laundering, even though it's responsible for improving quality of life in countries where politicians are the ones laundering money. Anyone claiming that these criticisms warrant introducing censorship into Tor and Bitcoin would be dismissed as misguided (or perhaps evil, depending on who's making the claim). I think by extension, the good done for society by having an uncensored naming system vastly outweighs the minor reorganizations which society's most powerful entities will have to undergo to counter squatting.

Full disclosure: I'm holding something like 100 names which I will happily hand over to the entity named, free of charge, upon request. So far no one's asked.
Last edited by fresheneesz on Mon Sep 22, 2014 10:17 am, edited 2 times in total.

fresheneesz
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Re: Proposal: Domains should be regularly auctioned

Post by fresheneesz » Mon Sep 22, 2014 10:13 am

I have, in fact, myself contacted a few domain squatters who refused to give me a reasonable price (sub $1000). So this isn't just some theoretical problem. Its very real.

"most of the current squatters in Namecoin are mostly interested in Namecoin's long-term success"

I don't actually care what current squatters are squatting for. I'm more interested in the end-game usage of namecoin - once its gone into mainstream use. The only reason we should want namecoin to become successful is that we think it will be significantly better once in mainstream use (whether or not its useful before then).

"One of the core principles of Namecoin is that it is uncensorable and unseizable."

That is a good point. While I'm not sure I consider domain names "speech" and therefore I'm not sure censorship is really the right concept here, it is a powerful idea that you can have and own a domain indefinitely without the possibility of someone taking it from you by force. This brings up a tangential question tho: can a namecoin domain be "lost" like bitcoins can be lost? I imagine so. In that case, an auction would prevent the possibility of names being lost forever.

Also, the 100x amount was just an example value really. The important properties of whatever ratio is chosen is that its low enough to prevent squatters from making money by buying thousands of domains and holding them ad infinitum - selling only a few for an outrageous price. But your point brings up an equally important constraint - that the number be high enough to prevent hostile domain snatching. Do you believe that the ratio low enough to prevent squatters is below the number high enough to prevent hostile domain snatching? I believe there is a range that solves both problems. Maybe 1000% is the right number, maybe 10000%.

Also, because the money from a purchase of a domain goes to the previous/current domain holder, if that ratio is high enough, people who actually want to keep the domain may be swayed just by the money. At very least its a consolation prize. Also, if they are being attacked by censors, the large amount of money it takes might greatly deter them from trying to snatch their domain. If they have to give $10'000 to their enemy just to take their domain.. they may be doing more benefit than damage.

What ratio do you think is high enough to prevent goliath from beating david?

"ICANN domains and trademark registries is the way to go"

ICANN is only the way to go for people who can put pressure on the ICANN group. Suffice it to say, ICANN domains will not be the way to go for 99.9999% of domain holders if there is a viable alternative (like namecoin). Any central authority is a monopoly with all the related cons. I think namecoin as it stands (even with the squatting issues) is better than ICANN in all respects. I just want to see it do even better ; )

"a large company has far more money at stake in their Namecoin name than any other entity"

And what about a small company? Why do you inadvertently that somehow only large companies buy domains? I'm primarily interested in this stuff because of the cost and annoyance of finding and paying for domains for my own personal use, as well as the cost of buying TLS certificates for the company I'm starting. The downsides of namecoin's current design should not be dismissed because "who cares about those big companies - they have enough money to deal with it". The little guy won't have those resources.

I think I might need to explain how domain squatters operate. Domain squatters buy tens of thousands of domains (with the current system, essentially for free using the "free-trial" loophole only they have access to) and hold them util someone will pay an exorbitant amount of money for it. They would make money for selling domains for $5, but they won't sell for anything less than $1000 because they make more money that way. They essentially create a shortage, and capitalize on it. This is so evil, and its disappointing that the namecoin community thinks it isn't a problem worth solving.

"rather than by introducing centralization"

I want to make it very clear that I am in no way proposing any kind of centralization. The auctions would be done in a decentralized way as part of the protocol itself.

domob
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Re: Proposal: Domains should be regularly auctioned

Post by domob » Mon Sep 22, 2014 10:27 am

Do you mind stating which domains you were interested in and declined by the squatters? Did they simply not react, not have any contact info at all, or want more than $1000? This is not clear to me from your post. It seems that you want to actually launch a real website on the domains more or less immediately (as opposed to squatting yourself), did you make this clear? I imagine that those who hold lots of domains today would be much more willing to sell/donate a domain to someone launching a website than to someone who may just be interested in squatting themselves.

If you really showed interest in launching a website and didn't get a name for reasonable conditions, this would be the first time I've heard of this situation, TBH (and I would be interested in hearing about it).

Regarding your argument about small companies: I totally agree that Namecoin seems to be a perfect fit with respect to saving money on TLS certificates and ICANN registration - and that's very good. But isn't a small company unlikely to have their name squatted anyway? I believe that most people complaining about squatting and wanting to auction off domains did that with arguments like "Google / insert-TM-holder-here needs to be able to get their rightfully owned name". This is a totally different issue to someone launching a start-up with a yet-unknown name.

Of course, if you want to start an online shop, you have to expect that, say, "buy.bit" may not be available easily. But that's true also with ICANN domains. Note that google.com is not search.com and amazon.com is not buy.com - so that's not really important anyway. Just pick a name and build your brand. I don't see how squatters will prevent that.
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crosser
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Re: Proposal: Domains should be regularly auctioned

Post by crosser » Mon Sep 22, 2014 12:08 pm

FWIW, this was/is my situation:

https://nf.bit/viewtopic.php?f=11&t=173 ... 9f28f1e34e

I saw a lot of domains with "un-contacable" owner(s).

Regards,
Eugene; id/crosser

fresheneesz
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Re: Proposal: Domains should be regularly auctioned

Post by fresheneesz » Mon Sep 22, 2014 9:24 pm

domob - I'm talking about traditional ICANN domains that have been bought by money-seeking squatters. They don't care about my situation, they just want money. My contention to you is that when/if namecoin becomes mainstream, these SAME squatters will infect the namecoin system. They did react, they responded to me with both form responses and real responses, and were in fact very polite. However they didn't find any reasonable prices to be acceptable.

This will be a problem with namecoin unless something is done. I am in no way arguing that it is *currently* a problem. I'm looking to the future.
But isn't a small company unlikely to have their name squatted anyway?
The legal definition of domain squatting - yes. Legally, you can only win a lawsuit for domain squatting if they snatched the domain for your name after you became a company. But I'm talking about a more general definition of name squatting - where a squatter buys up thousands of domains (based on dictionary generation, or whatever). And then waits to see who wants it. In today's world (mainstream DNS), squatters are happy waiting decades for a person to finally buy one of their domains for a huge sum of money.
But that's true also with ICANN domains.
I am in no way arguing that *any* properties of namecoin are worse than ICANN. ICANN is pretty much the worst in all respects. What I am saying is that namecoin can do better than its doing. Compare future namecoin with current namecoin. I hope that you hope it will be better in the future. Namecoin can solve this problem. The world would be a better place if it did. I think my proposal can at least be a start.

fresheneesz
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Re: Proposal: Domains should be regularly auctioned

Post by fresheneesz » Mon Sep 22, 2014 11:10 pm

Let me lay out the benefits of my auction proposal. There are some I didn't think of at first:

1. Makes it much more expensive to hoard/squat domains
2. Ensures that domains cannot be lost forever
3. Provides a feedback mechanism to determine the real-value of a domain (even if the domain is not sold)

The only downside is, as domob has said, that it does open up a (small) possibility of domain snatching. I think this can be mitigated by a large enough auction-advantage for the current domain name owner (the part about the current owner winning an auction with only 10% of the highest 2nd party bid).

For example, if the advantage were 100 times (where the current owner would only need 1% of the highest 2nd party bid to win), then a prospective snatcher would have to pay 100 times what the domain holder can afford to pay to keep the domain. As an example, if the current owner is willing to pay $100, the snatcher would have to bid over $10'000 - no insignificant sum. But what would this mean for domain squatters? It means that for less in-demand domains (that squatters typically hold out for a couple thousand dollars), if people were bidding between $50 and $500, they would have to pay between 50 cents and 5 dollars every auction to hold out for the couple thou they currently expect. If they have 300'000 domains (like kevin hamm does), this would amount to say $5 (average) times 300,000 == $1.5 million every auction. He would have to sell over 1500 domains for more than $1000 to just make cost.

This would force domain squatters to only squatt domains they actually have reason to believe will have value, instead of buying up every word in the dictionary like they do now.

Another consideration is griefers - people who would bid simply to cause the current owner to pay more to keep their domain. Griefing could be kept to a minimum if bids were enforceable (which the protocol could enforce), but the same current-owner-advantage that fends off hostile domain takeovers also fends off griefers. Of course, griefing is only a problem with the auction system, but I think the current-owner-advantage solves it well.

But where is this fear of domain snatching coming from? Domob, you've asked me if I have evidence that domain squatting is a problem, and I have first hand experience with it. What gives you the idea that domain snatching is a real problem? Does this happen with the ICANN system?

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Re: Proposal: Domains should be regularly auctioned

Post by sudoquai » Tue Sep 23, 2014 12:19 am

fresheneesz wrote:I have, in fact, myself contacted a few domain squatters who refused to give me a reasonable price (sub $1000). So this isn't just some theoretical problem. Its very real.

"most of the current squatters in Namecoin are mostly interested in Namecoin's long-term success"
That's an interesting point. I would like to add that, there is hard to contact some owners, because they didn't post any contact information. To bring the discussion to a point - domob mentioned that squatting domain names is not a problem. I agree to that - the real problem is that it's hard and clunky to trade them.

Fresheneesz proposal picks this up, by suggesting a system to support a better trading method and i think its worth thinking about a good, maybe native trading method. .bit domain names can already be traded/transfered (https://github.com/phelixnmc/antpy) and with some work you can make a portal like http://sedo.co.uk for .bit domain names only - this can be already done independently. However i would prefer a more decentralized, simple and native solution, which is less invasive to the Namecoin protocoll (https://forum.namecoin.info/viewtopic.p ... me+trading).

My opinion is, that if we integrate fixed renewal fees, which equals to the register price of 0.01 NMC, domain squatters (domain traders, which have interest to sell them for a higher price) are forced to think about 2 things:

1) Hold the domain, and pay the fee. If nobody is interested, he will simply release it after a time.
2) Trade the domain and accept offers from different buyers. The highest bid will get the domain and the domain trader and the new owner are both happy

With higher renewal fees measured in $, due to growing interest (for example usage of Namecoin as Identity solution for OpenBazaar) the domain trader is forced to think more about option 2) because he wants to get a good price OR to pay the fees again. It would be hard for a domain trader to keep thousands of domains forever, when he has to pay for them all the time.

But i would like to underline, that i am against massive changes of the Namecoin protocol. Simple things are always the best:

1) Reimplementing renewal fees (it works in the ICANN world, so it works with Namecoin, too)
2) Let somebody implement something like http://sedo.co.ok on his own, by using the native RPC interface for transfering (domain) names.
3) Best solution would be a auction-like system integrated in the Namecoin Wallet: https://forum.namecoin.info/viewtopic.p ... me+trading. With upcoming libcoin, fully supporting Namecoin RPC calls, its easy to make an own Namecoin Wallet with integrated (domain) name trading system.

With renewal fees you can effectively combat the usage of Namecoin as a cheap data storage to upload trash in it. Only data with value for somebody will find it's way to the Blockchain, and will be used for applications not implemented yet on top of the Namecoin protocol.

One thing is speaking against this solution: If Namecoin gains a higher value, it would be easily possible that .bit domains are one day even more expensive than ICANN domains.

But is this a "bug" or a "feature" ?

Is .bit domain squatting a problem ?

Here is an interesting paper: http://cybersecurityprivacyfoundation.o ... in_bit.pdf

By: Cyber Security and Privacy Foundation, Tech Core (J Prasanna, Suriya Prakash, Nikhil, Sabari Selvan)

P.S.: Thanks to to phelix, domob and everybody who helped to develop the new Namecoin Identity (id/) payment option in the new wallet. Works like a charm.

Regards,

Sudo.
NameID: id/sudo.wonder >>> Namecoin @ Facebook: https://www.facebook.com/namecoin.org

fresheneesz
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Re: Proposal: Domains should be regularly auctioned

Post by fresheneesz » Tue Sep 23, 2014 1:17 am

One thing is speaking against this solution: If Namecoin gains a higher value, it would be easily possible that .bit domains are one day even more expensive than ICANN domains.
A fixed fee does have that problem. But the auction system I outlined means that fees are based on demand, and therefore automatically adjust to what is fair forever.

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Re: Proposal: Domains should be regularly auctioned

Post by domob » Tue Sep 23, 2014 5:57 am

fresheneesz wrote:2. Ensures that domains cannot be lost forever
Note that domains are not "lost forever" with the current system either. Once they expire, they are up for grabs again.
sudoquai wrote:That's an interesting point. I would like to add that, there is hard to contact some owners, because they didn't post any contact information. To bring the discussion to a point - domob mentioned that squatting domain names is not a problem. I agree to that - the real problem is that it's hard and clunky to trade them.
sudoquai wrote:With upcoming libcoin, fully supporting Namecoin RPC calls, its easy to make an own Namecoin Wallet with integrated (domain) name trading system.
I agree here, atomic name trading is really nice. We're waiting for someone to implement a UI, so feel free to do just that. ;) I don't quite see what that has to do with libcoin, though. It works just as well (actually, only at the moment) with namecoind. You don't have to wait, everything is already there with my RPC calls and phelix' script.

One more thing: I can see the benefits of an auction system. Also the argument that if, say, the US government wanted to "steal" wikileaks.bit, they would have to pay 100x the price to Wikileaks themselves and they would at least benefit from that money, seems interesting. I still believe that this violates Namecoin's original intent and promise fundamentally. However, one could think about enabling auctions on a different TLD - let's keep .bit for "free speech" and add something else for companies, trademark holders and "highest economic use" advocates. (Just as an idea, this would be difficult to implement with the current system, since the protocol would differ per namespace - not impossible, though.) Or, going even further, we could let Bitshares try it out for us. If they do auctions and we don't, then this actually has the effect of providing both worlds for the users to choose from.
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fresheneesz
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Re: Proposal: Domains should be regularly auctioned

Post by fresheneesz » Tue Sep 23, 2014 6:14 am

Never heard of bitshares, will have to look into it - looks interesting. How would bitshares "try it out" for us?

"domains are not 'lost forever'"

My mistake.

I definitely like the idea of having both worlds, since each might have their own use cases.

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