Last updated on September 19th, 2016 at 12:06 pm
Namecoin is one of the oldest altcoins, which are currencies offered as an alternative to Bitcoin. The developers of Namecoin took a very novel approach when creating their currency, tying it to the Bitcoin blockchain, which allows Namecoin to be mined simultaneously with Bitcoin, and using the currency as an alternative DNS (Domain Name Server) system. This means that Namecoin is SHA-256 based, and shares Bitcoin’s incredibly large hashrate, but is also tied to Bitcoin’s future success.
Namecoin’s Unique Advantages Over Bitcoin
Namecoin, and only Namecoin, can be used to reserve domains with the .bit TLD. This TLD has been growing in popularity, and because the Namecoin DNS is decentralized, any content contained on domains within the .bit TLD is resistant to internet censorship. There is no centralized authority over the .bit TLD, thus no one has the ability to block, seize, or manipulate the domains that are utilizing it.
While the DNS system is the commonly known feature of Namecoin, it actually has a much broader ability that is often overlooked. Namecoin also offers secure key/pair data storage, which can be used to store any information imaginable, or can be used to build services upon. Namecoin.org mentions,”DNS, Alias/Identity (storage of email, name, gpg key, BTC-adress), Timestamping of documents (a document hash of name, hash, owner, etc), Broadcasting / Messaging, a web of trust, issuance and tracking of bonds & shares, secure and provable voting,” as potential uses for the data storage, but the system should only be limited to the imagination of the developers using it.
Also, due to the fact that Namecoin is tied to Bitcoin, it is protected from the impact of the current wave of Scrypt ASICs, as well as any ASICs developed for other algorithms, such as the X algorithm family, in the future. The SHA-256, Bitcoin Mining ASICs that fueled the Bitcoin network’s incredible growth have already impacted Namecoin, and it has survived.
What is the Future of Namecoin and Bitcoin’s Relationship
While Namecoin may not be widely know, like Bitcoin, it is still a very important part of the digital currency community. It is unique in it’s purpose, and has a devout following that have absolute belief in it. Combining that with the fact that it is merge-mined with Bitcoin, and is one of the oldest digital currencies, I expect that Namecoin will stick around for some time to come.