Namecoins are destroyed... is this how it works?

[virtual_master]

Namecoin will always protect the interests of their users, miners and investors.
Here we need to keep the best possible balance.

I am for the coin locking and release instead of the coin destruction because:
- users who identify themselves with namecoin get a bad feeling when valuable coins are destroyed
This way users can identify better with the network and we get a better popularity.
- locked coins are still not available(during the usage of the domain) and the market has less coin supply by the same demand - increasing prices / but the market capitalization is higher then by destroyed coins - better statistic

[zzrdn]

I am curious as to how price stability would work. If Namecoin can be used as a currency, and that currency finds its automatic value in the registering of names, where would the price find its stability? This is an important question to ask for the sake of finding out an appropriate price (valued in NMC) to put on registering and re-registering a name? Somethings to consider when thinking about this problem.

1) I am not talking just domain registration. This includes namespaces, NameID's, etc. (So potentially lots and lots of names to be registered)

1a) If the price of registering a name is .01 then that is 1 NMC (currently $10) / (.01) = 10 cents to register a name.

1b) That seems very inexpensive and I would assume as more people register, the value would rise, (Supply/Demand) as a result the price of 1 NMC would rise.

2) As people have to pay yearly or less than yearly, it becomes an annual expense. This now raises the registration price to (initial * n)

3) We must consider at what price registration would be too much for the majority of the user base. I would think $10 seems to be the breaking point.

3a) With the ideal price stability of registration being at $10 = .01 NMC, that would put the price of 1 NMC @ $1,000.

4) Assuming the fees aren't revised, does the .01 price ever change? I read something about the price or the network fee being reduced every two months. I also read about the price being reduced by a factor of 4 around the 2015/16 time period. Can someone explain that more in-depth? What would an automatic price reduction do to the volatility Namecoin's price?

5) If the price of registration is ever lowered (.01 to .001), by default that would create deflation. In order to counter this we WOULD ABSOLUTELY need to destroy coins to counter the inflation with deflation.

[im3w1l]

I think it would be a bad idea to refund domain fees. In that case domain squatting wouldn't be appropriately discouraged. My opinion is that the miner should get the domain fee when the domain expires. This is better than giving it to miners on registration, as that would lead to free registrations for miners as pointed out.

[honeydhollow]

How would miners get to register names for free if the fee goes to miners? Wouldn't the fees go to the miner who solved the block containing the transactions and not necessarily the miner registering the name? Additionally, if they solve the block with their own transaction and receive their own fee, aren't they still paying based on providing the hashing power on the network to build the blockchain?

[gigabytecoin]

I think it would be a bad idea to refund domain fees. In that case domain squatting wouldn't be appropriately discouraged. My opinion is that the miner should get the domain fee when the domain expires. This is better than giving it to miners on registration, as that would lead to free registrations for miners as pointed out.

That is what biolizard proposed back on page one.

I agree, this is the best idea and the only feasible one that allows for Namecoin to last "forever".

If miners received name registrations back immediately, a large miner could try to mine a solo block with 1M+ name registrations in it and then get all of the NMC back and the 1M registered names as soon as he managed to mine the block.

It would be prohibitively expensive to only mine the block that returned your domain registration fee at a later date, however.

[biolizard89]

I think it would be a bad idea to refund domain fees. In that case domain squatting wouldn't be appropriately discouraged. My opinion is that the miner should get the domain fee when the domain expires. This is better than giving it to miners on registration, as that would lead to free registrations for miners as pointed out.

Awarding the miner the name fee when a name expires would incentivise miners to cause names to expire by not mining name_update transactions. This could be extremely bad.

I'm not clear on why you think name squatting would be incentivised by refunding locked name fees. Let's say a name costs $1.00 USD. This means that if I possess a $1,000,000 budget, I can squat 1,000,000 names. If name fees are refunded, this means that I can choose to release some of my names and purchase new names, but the number of names that I can squat isn't changed.

There are better ways of disincentivising squatting which have been proposed. One method was proposed by virtual_master: have the network enforce a minimum and maximum price for a name, and allow auctions to determine who owns a name. If the original bidder bids the maximum price at any point, they automatically receive the name, even if another bidder bids the maximum price before or after that point. If the maximum price is $200 USD, then squatters are disincentivised from purchasing large numbers of high-value names, as they will spend $200 on each one. So if I possess a $1,000,000 budget, now I can only squat 5,000 high-value names, which will be far less profitable. Another method was proposed by various people: make fees dependent on name length, so short names cost more. This is somewhat simpler, but doesn't prevent someone squatting lockheedmartin.bit.