Proposal: Domains should be regularly auctioned

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indolering
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Re: Proposal: Domains should be regularly auctioned

Post by indolering » Mon Sep 29, 2014 7:09 pm

fresheneesz wrote:
indolering wrote:Squatting is a solved problem
I didn't realize there were actual plans to raise renewal fees to significant levels. Is this actually the case? How is the price determined?
There are some objections to raising rates, but none of them are particularly compelling.

One that I agree with is that not all namespaces should have the same renewal period or fees. But this can be easily fixed by just creating different renewal periods and fees for different namespaces.

Another is that plenty of us are holding domains for others, I've got both zooko.bit and aaronsw.bit. There has been talk of setting up a reserve for domains that would hand them out to their "rightful" owners, but that's a really difficult task.

As developers, we have to buy a domain every time a new version comes out. But we could just create a rule that ties pricing to length, and then only purchase really long domains.

Squatters complain that they supported Namecoin early on and that we "owe" it to them. By the time we switch this on, .bit should be usable enough that they will see some upside.
fresheneesz wrote:
You think Microsoft or Yahoo wouldn't have pushed the price of Google.com up when it was a small company?
They could try, but a properly designed auctioning scheme should render the attempts of yahoo and microsoft ineffective. If yahoo and microsoft wanted google to pay $10k every renewal, with my proposal they would have to put $1 million on the line every renewal. I wouldn't think yahoo or microsoft would be willing to risk handing over a million dollars to their biggest competitor just to hassle their domain name. That would also be illegal with current domain squatting laws. So I don't think your case holds water there.
I missed that part of your proposal when skimming, and it is very interesting. This would provide a mechanism to force squatters who simply refuse to engage in price negotiations (like the ones holding namecoin.bit) while still being resistant to abuse.
fresheneesz wrote:Even tho the definition doesn't give us a black and white test for every situation, it allows us to reason about the efficacy of ways of minimizing the impact of squatters abusing the system. It allows us to theorize how much squatting would be prevented from my auction proposal.
I don't want to just shoot your idea down for the sake of doing so. This is a solid contribution that has expanded my thinking about different ways of pricing domains. Theory building is vitally important and it requires a lot of failure before finding a solution that works. How to price domains has probably been the most contentious issue regarding Namecoin development and I believe that prior changes to pricing nearly killed the project.

While your system allows us to force squatters to sell their domains, it can be used to push up the price on popular domains that are not being squatted on. Would the ability to force squatters off of their domains counterbalance the negative impact on legitimate domain owners, the very people who increase the value of the naming system? I am skeptical of that it is.

For one, we much simpler tools to determine pricing, such as length. Furthermore, with gTLDs, there is a HUGE amount of inventory. The popularity of TLDs is roughly logarithmic and squatters holding domains are estimating their value based on .com, .net, and .org pricing. But the future domain valuations will not resemble that of the 90's or even last year.

That being said, there is popular support for a domain auctioning system, one that will remove the profit of big domain clearing houses like Sedo. We could use data from those auctions or the flow of domains being sent to new addresses to inform domain pricing mechanisms. We could also use a gentler mechanism, such as simply increasing the price by a fixed percentage for domains with active bids. Since the domain price will be fluid from year-to-year, a 10% or 20% increase in price might go unnoticed by individual domain owners but eat into the profits of domain squatters. These are items I hadn't thought about before your suggestion.
fresheneesz wrote:
loosely tied to a fiat currency
Don't think there will be much support for that, given what supporters of bitcoins think of fiat currencies. Also, that would almost necessarily require centralized control of the renewal fee - something that is also a huge non-starter, for very good reasons.
Oh, there are plenty of smart people who hate the idea on principal but – just like Libertarians who LOVED gold because it had industrial uses – they are ignoring the fact that value is always relative. Even if we could create a system which pricing things in a dynamic manner based on internals metrics (such as Gavin's plans for minimum fees) it will still be loosely tied to a reserve currency. Their ability to arbitrarily adjust their valuation is why they have become the defacto value store.
fresheneesz wrote:
at this point it's an engineering challenge not some fundamental design flaw
Making a distinction between a "fundamental flaw" and an "engineering challenge" is splitting hairs. My auction proposal is in fact a method to determine the "floating price point" you're talking about. It determines the price based on market value (bids in the auctions). I've solved your "engineering challenge".
Ahh, well, so is a price determined by votes from miners. Your proposal is very new and it's being put through the ringer. We've been bating the "miner votes" median price consensus around for a long time now, it's at least on iteration 2.0 if not higher.

Even Jeremy's 51% weakness has been mollified somewhat by adding min/max price limits that are subject to higher levels of consensus. Even though it's not simple to program, it's certainly easier than a decentralized auction system. And at least I can run simulations of the miner voting mechanisms based on historical data of the blockchain pool ratios and exchange rates.

You are stepping into an ongoing discussion and we do appreciate your contribution. I hope you stick around, we need help thinking about, modeling and coding these things : )
fresheneesz wrote:
biolizard89 wrote:"we would actually have to decrease the name fee to avoid running out of coins"
That's very interesting. I figured there was a major problem with destroying coins.
Ahh, come-on Jeremy, we've debunked that a few times! We could always remine spent coins, increase the levels of division, or even allow for a large number of Namecoin to be mined.
DNS is much more than a key->value datastore.

fresheneesz
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Re: Proposal: Domains should be regularly auctioned

Post by fresheneesz » Mon Sep 29, 2014 8:16 pm

we have to buy a domain every time a new version comes out
That seems problematic. If the network becomes popular, wouldn't that be either a huge disruption or put a large amount of pressure to not release new versions?
though it's not simple to program, it's certainly easier than a decentralized auction system
My opinion is that programming simplicity should not be a factor in deciding the best mechanisms to use. Solve it once, solve it forever. Programming is actually really cheap compared to the value it produces.
it can be used to push up the price on popular domains that are not being squatted on.
Definitely true - the same techniques that can deter squatters can affect legitimate users. Is there a best-of-both-worlds alternative? We just need to make sure the system deters the behaviors squatters usually have (buying many domains being the main one, also perhaps having a large number of them point to identical addresses) have minimal impact on the behaviors legit users have (buying few domains most of which point to unique addresses).
increasing the price by a fixed percentage for domains with active bids
I like that idea. Introducing some caps into my proposal as far as how much the renewal fee can increase every renewal would go a long way to preventing abuse. Even if the renewal fee was limited to less than a 100% increase (so doubling at most), it would essentially make the yahoo/microsoft vs google thing impossible - if the original registration cost was $10, it would take 10 renewals to raise the fee up to $10,000 while still retaining a way to see the actual market value of the domain.

domob
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Re: Proposal: Domains should be regularly auctioned

Post by domob » Tue Sep 30, 2014 5:15 am

fresheneesz wrote:
we have to buy a domain every time a new version comes out
That seems problematic. If the network becomes popular, wouldn't that be either a huge disruption or put a large amount of pressure to not release new versions?
I have to say that while indolering claimed this some times above already, I don't quite know what he means here ... I see no reason why we would have to purchase any domains at all, even less so for each new release. Indolering, can you please clarify which domains you mean and why we need them for each release? Do we do that already now? (If so, I'm not aware of it. :$)
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indolering
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Re: Proposal: Domains should be regularly auctioned

Post by indolering » Tue Sep 30, 2014 9:08 pm

fresheneesz wrote:My opinion is that programming simplicity should not be a factor in deciding the best mechanisms to use. Solve it once, solve it forever. Programming is actually really cheap compared to the value it produces.
Well, feel free to do all the hard work then! This is OSS and none of us are getting paid right now. Implementing your proposal would tie up all of our development resources for some time.

I was working out how I plan on testing Jeremy's proposal today and it's going to require a lot of time and energy just to create the simulation platform, let alone run the simulations and do the math.
fresheneesz wrote:I like that idea. Introducing some caps into my proposal as far as how much the renewal fee can increase every renewal would go a long way to preventing abuse. Even if the renewal fee was limited to less than a 100% increase (so doubling at most), it would essentially make the yahoo/microsoft vs google thing impossible - if the original registration cost was $10, it would take 10 renewals to raise the fee up to $10,000 while still retaining a way to see the actual market value of the domain.
That would be a safer, but remember that we HAVE to remain price competitive with .com and other TLDs. ~$100 is about the highest most TLDs go for and no sane person would buy a .bit domain when they could grab something similar for less at one of the ~400 TLDs.

First, however, we will have to implement floating prices, implement differential pricing for namespaces, and an auction system. If squatting is still a severe problem, we can revisit potential solutions then. You should create a wiki page and catalog all of the pricing and anti-squatting proposals, along with the price restrictions.
domob wrote: I have to say that while indolering claimed this some times above already, I don't quite know what he means here ... I see no reason why we would have to purchase any domains at all, even less so for each new release. Indolering, can you please clarify which domains you mean and why we need them for each release? Do we do that already now? (If so, I'm not aware of it. :$)
Well, I rely on unit testing more than most programmers, but it's an important part of release process. It's probably overkill to do so when the registration code hasn't been touched, but I try to buy a domain when testing OS X builds. It's fairly cheap right now and it should be simple for us to figure out something when the prices rise.
DNS is much more than a key->value datastore.

domob
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Re: Proposal: Domains should be regularly auctioned

Post by domob » Wed Oct 01, 2014 5:52 am

indolering wrote:
domob wrote: I have to say that while indolering claimed this some times above already, I don't quite know what he means here ... I see no reason why we would have to purchase any domains at all, even less so for each new release. Indolering, can you please clarify which domains you mean and why we need them for each release? Do we do that already now? (If so, I'm not aware of it. :$)
Well, I rely on unit testing more than most programmers, but it's an important part of release process. It's probably overkill to do so when the registration code hasn't been touched, but I try to buy a domain when testing OS X builds. It's fairly cheap right now and it should be simple for us to figure out something when the prices rise.
Ok, I see. I was not aware of that - but you could use the testnet. After all, that's what it is for. ;) Or set up your own private "testnet in a box". Best would be to have a regtest framework like Bitcoin does in recent versions ... maybe when we have done the rebase. :D
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indolering
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Re: Proposal: Domains should be regularly auctioned

Post by indolering » Wed Oct 01, 2014 8:37 pm

domob wrote: Ok, I see. I was not aware of that - but you could use the testnet. After all, that's what it is for. ;) Or set up your own private "testnet in a box". Best would be to have a regtest framework like Bitcoin does in recent versions ... maybe when we have done the rebase. :D
Oh right, testnet, derp!
DNS is much more than a key->value datastore.

knightArmor
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Re: Proposal: Domains should be regularly auctioned

Post by knightArmor » Mon Oct 05, 2015 10:06 am

Hi there namecoin viewers, with regard to this topic I want to add my bit to the discussion, so here is a link within the forum if you want to broaden your reading on this subject. My post there has a few suggestions on this subject matter.
https://forum.namecoin.info/viewtopic.p ... 7&start=30

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