Status
As I'm writing this, we are at block 559. Generation is about 10 minutes per block so the difficulty is right on target. 181 domains registered.
Economics
Some good points were raised regarding the economics of the system. Here are my thoughts. As the code is now the network fees become negligible in a couple of years and only the regular transaction fees remain. Miners will charge transaction fees based on the cost of processing and competition.
Beyond that, some names are more valuable than others because of marketing reasons. Some miners might try to charge more to update valuable names. Some names will be registered early and sold in marketplaces.
It seems that all these dynamics will result in some kind of equilibrium, but it is difficult to tell what it will be.
It's not clear how miners will choose tx fees. The maximum that a domain holder might need to spend to renew their domain is the equivalent to the average miner revenue from a block. This comes out to 50 NC + 5000 times the average domain tx fee if there are 5000 tx per block. This is how much it would cost them to generate a block themselves. The owner of sex.bit might experience this.
As to the total number of names supported by the system, max bitcoin block size is now 1MB, average tx size might be 200, renewal period is 12000 blocks and assume 2 updates per period. This gives 30M domains supported. I feel this is too low and we'll have to raise the block size, either now or later. Should we target 10 billion names?
DNS
I've been thinking more about representing values. A zone file doesn't seem like a good solution after all. For one, you can't do DNS delegation if you are behind Tor. So I'm proposing JSON with optional gzip encoding. Example:
{'map': {'' : '127.0.0.1', 'y' : ['127.0.0.2','::2'], 'foo' : 'bar.com'}}
first case is an IPv4, second is IPv4 + IPv6, third glues to an existing domain. In the third case, you translate foo.name.bit to foo.bar.com and resolve that. It's close enough to delegation and works behind Tor. We can extend this for mail exchange and other things as the need arises.
We do have to decide on a TLD strategy so people know what URL to tell their users. Otherwise there will be inconsistent implementations and the end-users will get confused.
I propose resolving .bit, .b and .n, recommending that web sites expect virtual hosts under all three, but that people refer to .bit URLs for now. This gives us some fallbacks if ICANN decides to use .bit for something else. So if you register d/foo, you normally use
https://foo.bit, but foo.n and foo.b also work.
@memvola - just saw your post about TLDs and you bring up some interesting ideas. Maybe start with my proposal above and add TLDs later if it seems like the right thing?
Generation
The code is identical to bitcoin, with the amount halved every four years. Some people seem to prefer constant generation? Reasons?
@da2ce7 the initially high network fee will slow early domain squatting.
@memvola if you get a name clash, the losing transaction becomes a zombie and the wallet thinks you have less coins to spend. This will be fixed soon, sorry that it ties up your NC. As to the network fee, it was 50 at genesis and is already a bit lower. It will be 25 after about 2 months.
@dmp1ce yes, updates are costless. Also, if you update before the 12 are up, the tx will stick around until the 12th block comes. It's no problem.
@0x6763 good point. However, if there's a clash with ICANN, different users will see different sites for the same name. Wouldn't it be better if clashes are avoided, at least until the system is stronger? 21 million NC will be created and some are lost to the decaying network fee.
@gavinandresen - I agree with your analysis. There's no other discussion of the economics, other than this thread.
@xf2_org @noagendamarket - Namecoin is pretty close to what Satoshi described. What significant differences do you see? He did mention a renewal fee, but I don't see why that would be useful in addition to the tx fee set by the miner.
