Namecoin Flaws & Improvements Tip Bounty

[phelix]

3)  Fees from the initial bid are split between the the miner and dividends paid to those who hold the crypto-currency

Hmm, this would cause weird incentives for miners and stakeholders to pass through discounted name registration. The easiest solution for this is to destroy the fees. As Satoshi put it: "Think of it as a donation to everybody"

It seems like stakeholders and miners would want the highest possible initial bid, not discounted bids?  If I see two registrations for a name I will pick the highest.  Note that destruction of the money is effectively a dividend as it reduces the supply.  In the end this could result in a large portion of the money supply being destroyed.

Imagine I am a miner with a strong 5% network hashrate. Instead of making a public bid of 1BTC for a name you ask me in private. If I mine your transaction I get 50% of it back (minus ~2% orphaned block rate). I can easily give you a discount of 25% and still make 25% profit.

It might be possible to delay the fee payout to miners of on or more later blocks but once again it makes things more complicated. It may not always be easy to spot hidden incentives of such a system.

What good does this do you?   Just because you get your transaction in doesn't mean you own the name yet.  I could come along after you any time in the next 1000 blocks (72 hours) and out bid you with a new transaction in the blockchain.

This is not the point I am criticizing here. But paying fees for the first bid (partially) to miners leads to bad incentives. So the coins from the initial bid should be destroyed. Of course with 4) there is the same issue but there is the same solution.

4)  If someone outbids the initial bid, then half of the 'profit' is given to the original bid and half paid to the miner and dividends.

Very interesting idea. If somebody outbids you, you at least get a compensation. Also bidding is costly as long as the issue above does not occur.

Please note this is much more complicated than Namecoin is already now. With merge mining and name registration Namecoin is probably the most complex coin already now (As I understood Khal there is more difference between Bitcoin and Namecoin than between Bitcoin v0.3 and v0..

What about name updates and stealing famous names from non profit websites. These might not be able to pay much but the names might still be of high value.

I think there should at least be namespaces for both ways of distribution.

[bytemaster]

The speed I was referring to was not from 'decision to purchase' to 'name owned'  but how many total names per second can be registered.   (Latency vs Throughput)  To be fair, my auction system would only support the same through put as Namecoin, but perhaps a higher latency.    Fortunately, I would never dream of using an auction system to allocate email names for BitMessage.  I have a different system in place that can handle 10K registrations per 5 minutes on a first-come basis with support for 1 billion accounts, renewed annually with 65 GB maximum data storage and 20kbit/sec maximum average data rate.    Namecoin is several orders of magnitude behind that system for email account registration.

The point is that if namecoin does price fixing all it does is result in an after-market, off-chain, auction.   The only way for someone to 'speculate' in this market safely is to buy names 1000 at a time and hope they can sell 1 or 2 of them to pay for the rest.  End result:  all 'good names' are owned and not available directly on chain.   You cannot escape market forces and that is why attempting to design a fixed-price rationing system in a block chain is counter productive and inefficient.    

[bytemaster]

What about name updates and stealing famous names from non profit websites. These might not be able to pay much but the names might still be of high value.

I think there should at least be namespaces for both ways of distribution.

What value is a famous name for a non-profit unless someone has a use for it?   If I buy it, do not use it, and cannot sell it then I lose money.   If I can use it to generate more money than the non-profit could with it, then I am actually doing more good for society than the so-called non-profit.   Now obviously, I couldn't grab redcross and then operate a business called 'RedCross' without having trademark issues.  Without the ability to use the name in a public, for-profit manner the name only really has as much value as RedCross is willing and able to pay for it.

[phelix]

What about name updates and stealing famous names from non profit websites. These might not be able to pay much but the names might still be of high value.

I think there should at least be namespaces for both ways of distribution.

What value is a famous name for a non-profit unless someone has a use for it?   If I buy it, do not use it, and cannot sell it then I lose money.   If I can use it to generate more money than the non-profit could with it, then I am actually doing more good for society than the so-called non-profit.   Now obviously, I couldn't grab redcross and then operate a business called 'RedCross' without having trademark issues.  Without the ability to use the name in a public, for-profit manner the name only really has as much value as RedCross is willing and able to pay for it.

Objectively you might be right but from a personal point of view it could still be pretty uncomfortable. I was in a situation like the one above some time ago and I would not have enjoyed anybody to be able to force me to pay a lot of money to keep my domain. What about small independent websites? They would be forced to be profitable.

Example: http://blockchained.com
Imagine some large VC funded company wants to advertise on my site but I think they are a rip off and don't allow it. They pay some bucks and take over my site? No way would anybody in his right mind run a personal website on that system.

What about blackmailing for names? Pay me 1BTC or I will steal your name. What about non domain namespaces like bonds, IDs etc?

I think it will be very difficult to make your system well balance. Also Namecoin is already working fine, just like the old domains: Squatters don't want to sit on domains. If someone has a proper use for a domain he can simply buy the domain from the squatter. The new owner can resell it if somebody should show up who wants to pay even more.

If at all I can only see it coming for new/expired domains not for renewing.

[bytemaster]

What about name updates and stealing famous names from non profit websites. These might not be able to pay much but the names might still be of high value.

I think there should at least be namespaces for both ways of distribution.

What value is a famous name for a non-profit unless someone has a use for it?   If I buy it, do not use it, and cannot sell it then I lose money.   If I can use it to generate more money than the non-profit could with it, then I am actually doing more good for society than the so-called non-profit.   Now obviously, I couldn't grab redcross and then operate a business called 'RedCross' without having trademark issues.  Without the ability to use the name in a public, for-profit manner the name only really has as much value as RedCross is willing and able to pay for it.

Objectively you might be right but from a personal point of view it could still be pretty uncomfortable. I was in a situation like the one above some time ago and I would not have enjoyed anybody to be able to force me to pay a lot of money to keep my domain. What about small independent websites? They would be forced to be profitable.

Example: http://blockchained.com
Imagine some large VC funded company wants to advertise on my site but I think they are a rip off and don't allow it. They pay some bucks and take over my site? No way would anybody in his right mind run a personal website on that system.

What about blackmailing for names? Pay me 1BTC or I will steal your name. What about non domain namespaces like bonds, IDs etc?

I think it will be very difficult to make your system well balance. Also Namecoin is already working fine, just like the old domains: Squatters don't want to sit on domains. If someone has a proper use for a domain he can simply buy the domain from the squatter. The new owner can resell it if somebody should show up who wants to pay even more.

If at all I can only see it coming for new/expired domains not for renewing.

I think you are misunderstanding something critical.  The name is *yours* and no one can take it from you after 72 hours with no bids.    It is only for the first 72 hours that someone could outbid you.

[snailbrain]

What about name updates and stealing famous names from non profit websites. These might not be able to pay much but the names might still be of high value.

I think there should at least be namespaces for both ways of distribution.

What value is a famous name for a non-profit unless someone has a use for it?   If I buy it, do not use it, and cannot sell it then I lose money.   If I can use it to generate more money than the non-profit could with it, then I am actually doing more good for society than the so-called non-profit.   Now obviously, I couldn't grab redcross and then operate a business called 'RedCross' without having trademark issues.  Without the ability to use the name in a public, for-profit manner the name only really has as much value as RedCross is willing and able to pay for it.

Objectively you might be right but from a personal point of view it could still be pretty uncomfortable. I was in a situation like the one above some time ago and I would not have enjoyed anybody to be able to force me to pay a lot of money to keep my domain. What about small independent websites? They would be forced to be profitable.

Example: http://blockchained.com
Imagine some large VC funded company wants to advertise on my site but I think they are a rip off and don't allow it. They pay some bucks and take over my site? No way would anybody in his right mind run a personal website on that system.

What about blackmailing for names? Pay me 1BTC or I will steal your name. What about non domain namespaces like bonds, IDs etc?

I think it will be very difficult to make your system well balance. Also Namecoin is already working fine, just like the old domains: Squatters don't want to sit on domains. If someone has a proper use for a domain he can simply buy the domain from the squatter. The new owner can resell it if somebody should show up who wants to pay even more.

If at all I can only see it coming for new/expired domains not for renewing.

I think you are misunderstanding something critical.  The name is *yours* and no one can take it from you after 72 hours with no bids.    It is only for the first 72 hours that someone could outbid you.

if it takes 72 hours to create/register a name i can't see it being so popular

[bytemaster]

Name = Domain.  The auction period is flexible but has to be wide enough to give people enough time to consider it.

[phelix]

What about name updates and stealing famous names from non profit websites. These might not be able to pay much but the names might still be of high value.

I think there should at least be namespaces for both ways of distribution.

What value is a famous name for a non-profit unless someone has a use for it?   If I buy it, do not use it, and cannot sell it then I lose money.   If I can use it to generate more money than the non-profit could with it, then I am actually doing more good for society than the so-called non-profit.   Now obviously, I couldn't grab redcross and then operate a business called 'RedCross' without having trademark issues.  Without the ability to use the name in a public, for-profit manner the name only really has as much value as RedCross is willing and able to pay for it.

Objectively you might be right but from a personal point of view it could still be pretty uncomfortable. I was in a situation like the one above some time ago and I would not have enjoyed anybody to be able to force me to pay a lot of money to keep my domain. What about small independent websites? They would be forced to be profitable.

Example: http://blockchained.com
Imagine some large VC funded company wants to advertise on my site but I think they are a rip off and don't allow it. They pay some bucks and take over my site? No way would anybody in his right mind run a personal website on that system.

What about blackmailing for names? Pay me 1BTC or I will steal your name. What about non domain namespaces like bonds, IDs etc?

I think it will be very difficult to make your system well balance. Also Namecoin is already working fine, just like the old domains: Squatters don't want to sit on domains. If someone has a proper use for a domain he can simply buy the domain from the squatter. The new owner can resell it if somebody should show up who wants to pay even more.

If at all I can only see it coming for new/expired domains not for renewing.

I think you are misunderstanding something critical.  The name is *yours* and no one can take it from you after 72 hours with no bids.    It is only for the first 72 hours that someone could outbid you.

Please get me right, I am all in favor of thinking about these things I just can't image it working like this.

How should renewal work?

If there is no bidding for renewals then squatting will not be prevented. So it is either squatting or domain disappropriation.

[bytemaster]

How should renewal work?

If there is no bidding for renewals then squatting will not be prevented. So it is either squatting or domain disappropriation.

Renewals are just a normal transaction fee and nothing special.  And just to prove you still control the private key and to control blockchain growth.

Here is the thing, domain squatting depends upon purchasing 10,000 names at $10 and hoping that a hand full of them are worth several thousand or perhaps 10's of thousands.   Unfortunately, most of those names are 'worthless' and there mere act of squatting on them means that most people would not buy them even for $30.

Under this system, you could attempt to use that model but why bother?  No need to bid on a name until someone expresses interest.  Furthermore, if you simply own the crypto-currency then you will get a cut of every name regardless of how high it was bid up.   Thus, the crypto-currency acts like stock in all possible names and someone who squats on the wrong name is losing money because they are not well diversified.    They would have to bet that the value of that name would go up faster than the value of the dividends they would receive for *not buying it* and that is not a safe bet at all. 

[phelix]

How should renewal work?

If there is no bidding for renewals then squatting will not be prevented. So it is either squatting or domain disappropriation.

Renewals are just a normal transaction fee and nothing special.  And just to prove you still control the private key and to control blockchain growth.

Here is the thing, domain squatting depends upon purchasing 10,000 names at $10 and hoping that a hand full of them are worth several thousand or perhaps 10's of thousands.   Unfortunately, most of those names are 'worthless' and there mere act of squatting on them means that most people would not buy them even for $30.

Under this system, you could attempt to use that model but why bother?  No need to bid on a name until someone expresses interest.  Furthermore, if you simply own the crypto-currency then you will get a cut of every name regardless of how high it was bid up.   Thus, the crypto-currency acts like stock in all possible names and someone who squats on the wrong name is losing money because they are not well diversified.    They would have to bet that the value of that name would go up faster than the value of the dividends they would receive for *not buying it* and that is not a safe bet at all. 

Sounds like squatting is not effectively prevented then. At the beginning there will be few people interested, these will compete for the very best/shortest names in some bid wars as they think the names are worth more than the coin (even if they should be wrong with that assumption). Later on they will sell the domains to late adopters.