Bitcoin domain name BNS hype, is it an opportunity or a risk?

Original author: Grapefruit
Original source: ChainCatcher
On May 28, a screenshot of the domain name 001.btc being sold for 0.3 BTC (approximately US$8,100) was circulated in major crypto communities. According to the seller of the domain name, he engraved the domain name in February and spent about US$10. The profit obtained from this transaction reached more than 800 times. This transaction completely ignited the enthusiasm of Bitcoin domain players.
In fact, the 001.btc domain name is a text inscription (Text) content engraved by users based on the Bitcoin Ordinal protocol. In the early days, although it looked like a domain name with the suffix .btc, it did not have the so-called domain name function and did not support Bitcoin address resolution. Users only held text NFTs.
With the completion of the 001.btc deal, text-based domain names based on the Ordinal protocol began to attract the attention of users and related service providers, and they were truly domainized and provided with related functions.
Domain names have become another new hot spot in the Bitcoin ecosystem after BRC20 and NFT. Domain name players began to race against time to engrave new domain names, fearing that they would miss this train of wealth. Some applications on the Bitcoin chain have also begun to support Bitcoin domain name services. On May 30, the Bitcoin Inscription trading and wallet service platform Ordinals Wallet announced that it supports domain name resolution such as .btc and .sats. Now users can use domain names to send and receive Bitcoin and Inscriptions; on May 31, the Bitcoin wallet Unisat was launched. The domain name trading market supports trading of domain names with .sats and .unisat suffixes.
The inscription of the Ordinal protocol supports inscription by anyone, which means that users can inscribe any text with a .xxx character suffix similar to a domain name. At present, the consensus domain names that have been formed in the Bitcoin text domain name market include a series of suffix character domain names such as .btc, .sat, .sats, and .ord.
In addition, some domain name service providers have also begun to provide domain name services, but the ecosystem is very chaotic. There are three .btc domain names, including the text .btc domain name, the BTC.US .btc domain name based on the Stacks chain, and the Jason format .btc domain name launched by the decentralized domain name service provider BTCDomain based on Ordinals. It seems that they are all .btc, but behind them are three different domain name providers and operating systems.
Currently, according to the domain name payment mechanism, the products in the Bitcoin domain name (BNS) market can be roughly divided into two categories: one is the lease-pay domain name led by domain name service providers, which requires the payment of annual service fees, and represents the products BTC Domain and BTC. US; the other type is Ordinals text domain names (.sats, .sat, etc.), which only need to pay the gas fee on the chain when engraving, and are valid for life.
So, what exactly is the difference between these domain names? What are the functions? How should we choose? This article will try to give some answers.
About Bitcoin BNS
BNS (Bitcoin Name Service) is the collective name for Bitcoin domain name services, which refers to domain name services built on the Bitcoin blockchain network. BNS functions similarly to the Ethereum Domain Name Service ENS. It can convert Bitcoin addresses into characters that are easy for humans to remember and recognize, forming Bitcoin domain names ending with ".btc, .sats, .sat", etc.
BNS is an address converter on the Bitcoin chain. It can convert address strings on Bitcoin that do not require addresses starting with "bc1p" into easily identifiable domain name characters, similar to Twitter or Weibo usernames. When users bind their Bitcoin address to a domain name, they can use the domain name to send and receive on-chain assets such as BTC, without the need to copy or enter complex Bitcoin addresses. At the same time, the BNS domain name is also the user's universal identity credential on the Bitcoin chain. In the future, users can use their BNS to log in to the Web3 application and display it as a user name. The user can manage the corresponding wallet address and data, etc.
In addition, some social accounts, email mailboxes, etc. can also support users to bind BNS domain names, and the NFTs they hold can be recorded on the domain name, or set as domain name avatars, etc. For example, the decentralized social application Damus supports users to use .sats domain names as users name.
What are the BNS domain names? how to choose?
Today, in the Bitcoin ecosystem, there are two main ways for users to obtain domain names based on different payment methods: one is a paid leased domain name provided by a domain name service provider, representing projects BTC.US and BTCDomain; the other is It is a text domain name (Text) generated based on the Ordinals protocol.
Since the text domain name (Text) will be owned by the wallet address for life once it is engraved, there is no subsequent payment, and there is no project issuer, and everyone is equal. Anyone can engrav the domain name they want according to their own preferences. Therefore, the text domain name In the current Bitcoin domain name market, it is the most sought after and popular among users.
But before text domain names became popular, developers had already deployed Bitcoin domain name-related products, such as BTC.US and BTCDomain. Among them, the domain names with the .btc suffix are the most diverse. BTC.US and BTCDomain provide domain name services with the .btc suffix, plus text-based .btc domain names spontaneously generated by users through Ordinals. In other words, currently Bitcoin There are three types of .btc domain names in the ecosystem. This is mainly because .btc is the symbol of BTC and is easier for users to identify and spread. It has also become the most preferred suffix character among domain name service providers.
So, what are the differences between these three types of .btc domain names? How should users choose?
1.Ordinals text domain name: only need to pay gas fee, issuance is equal
Text domain names mainly refer to character content similar to domain names issued based on the Bitcoin Ordinals protocol. Users only need to pay the gas fee on the chain to engrave it. Once inscribed, it will be valid for life and there will be no subsequent fees. The main representatives include ".btc, .sat, .sats, .ord, .unisat", etc.
The Ordinals protocol generates Ordinals NFTs by inscribing inscriptions (inscribe inscriptions) on satoshis (sats), the smallest unit of Bitcoin, to make each satoshi unique. The essence of using the Ordinals protocol to issue domain names is to engrave domain name strings (Text inscriptions) on Satoshi. This is why domain names are always called Text.
Since the domain name is a text-based inscription, it complies with the rules of inscription: it supports any user to inscribe domain names with any suffix through code and on a first-come, first-served basis. The former can be understood as anyone can deploy any domain name with the character suffix . The rest are invalid domain names. In other words, it does not restrict users from registering domain names with the same characters, but once the domain name inscription is registered, even if the latecomer registers the same one, it will be invalid and will not be recognized and accepted by the market. For example, if someone registers 001.btc for the first time in February, subsequent people can also register 001.btc, but the subsequent 001.btc is an invalid inscription.
The process of inscribing a domain name is similar to deploying a BRC20 token, except that the inscription on the BRC20 token is unified Jason data, and the inscription on the domain name is a unique string, so each inscribed domain name is also an Ordinals NFT asset. .
In addition, in the current Bitcoin text domain names, domain names are not case-sensitive, and there is no difference between upper and lower case in inscription and recognition. In other words, if someone mints SUSHI.btc, then you do not need to mint SUshi.BTC/sushi. .btc, etc., because this domain name has been occupied, all subsequent ones are invalid.
Although Ordinals supports domain name inscriptions with any suffix characters, it does not mean that any suffix character will definitely become a domain name and have value. If it does not have the function of a domain name (for example, it cannot support binding a Bitcoin wallet address), or if there is no consensus, it can only be a text-based inscription NFT.
In other words, whether .xxx, these text inscriptions similar to domain names, such as .btc, .sat, .sats, .stas, .ibx, .gm, etc., can become so-called domain names, depends on whether everyone has a consensus on it and whether they have a wallet. Or relevant service providers provide domain name-related functional services, such as supporting address resolution, which can be used to receive assets or log in to decentralized applications. Only by supporting domain name-related functions can these domain name-like texts have domain name value.
Taking the above .btc, .sat, .stas, .sats, .ibx, and .gm domain names as examples, the unisat wallet currently supports parsing .sats, so users can use the .sats domain name to receive and send Bitcoin assets; and The centralized social application Damus supports usernames set to .sats, so users can use .sats as their identity representative. At this time, .sats already has the function of a domain name, while other plain text domain names with the .xxx suffix are just text NFTs because there is no wallet application to support address resolution or other domain name functions.
How to get a text domain name?
If the domain name has been registered, the user can purchase it on the Bitcoin NFT trading market or over-the-counter point-to-point, and the price depends on the seller's order price; if the domain name has not been registered, the user can purchase it on a platform that supports Bitcoin inscriptions or use the code Just engrave it directly, you only need to pay the gas fee on the Bitcoin chain (currently about US$3 per transaction), and there are no subsequent fees.
Taking the Unisat platform as an example, if you want to engrave a new domain name:
Step 1: Before registering, you need to check for plagiarism to confirm whether the domain name has been registered.
Use the platform's search function (Search) and enter the desired domain name to see if it already exists. If it already exists, re-registration will be invalid. It should be noted that during the duplication checking process, there may be some reasons that cause the data to be inaccurate. In this case, users need to check for duplication on multiple platforms and cross-verify.
Step 2: It is confirmed that the domain name has not been registered yet. At this time, use the inscription function (Inscribe) of the platform to register the inscription. Since Unisat supports .sats and .unisat, users only need to click on the relevant domain name suffix and enter the characters they want to register. Multiple domain names can be cast in batches.
If there is no relevant suffix domain name on Unisat, users can enter the desired character suffix domain name through the Text dialog box, which supports batch casting of domain names with different suffixes.
What are the well-known text domain names?
Bitcoin Name Service (.btc) - is a domain name with the .btc suffix organized by community users. It has minted satoshi.btc and donated it to the Bitcoin Foundation. As of May 31, according to Unisat searches, there were 100,000 registered .btc domain names.
sat.names (.sat) — sat is the abbreviation of Satoshi, and the number of registered domain names is 307,000.
sats.names(.sats) —sats is the abbreviation of Satoshi, and the number of registered ones is 298,000.
.unisat - is launched by Unisat wallet. Users who own .unisat can enjoy platform fee discounts.
.ord —The first token of BRC20 is ORDI.
Text domain name related tools——
Checking for plagiarism and marking new domain names
iDclub - can be used to check domain name duplication and register in batches. A certain handling fee will be charged.
Unisat - supports domain name duplication checking and registration. On May 31, the .sats and .unisat domain name trading markets have been launched, and their domain names can also be resolved to Bitcoin wallet addresses. Users can receive Bitcoin assets and inscriptions using .sats and .unisat domain names.
Best in Slot - Aggregates various assets of the Ordinals protocol, including NFTs, domain names, inscriptions, etc. Users can use it to check for duplication and view the holding address information of each inscription.
Domain name secondary trading market
Ordinals Wallet - a service similar to Unisat, integrating wallet and Ordinals asset trading functions. On May 30, it was announced that it has launched support for .sats, .btc, .unisat, .xbt and other domain names, and supports domain name resolution to Bitcoin wallet addresses. That is, users can bind these domain names to the Ordinals Wallet Bitcoin address and use the domain names to receive and transfer assets.
Ordswap - is also a platform that integrates wallet and Ordinals asset trading functions, supporting text domain name listing and trading.
Magic Eden - Added a new Bitcoin NFT market, supporting domain name transactions such as .btc.
2.BTC.US: .btc domain name issued based on Stacks network
BTC.US is a domain name service system with the suffix ".btc" built based on smart contracts on Stacks. Stacks is a Bitcoin smart contract chain that can provide smart contract function support for Bitcoin and help deploy DeFi, NFT and various decentralized applications.
Currently, if users want to obtain a domain name on BTC.US, they need to connect to a wallet such as Hiro or Xverse on its official website to apply for registration, and pay using STX, the native token of the Stacks platform. Each registration requires a one-time payment of 2 STX tokens (approximately $1.3) for a 5-year annual fee, which will be automatically deducted upon expiration.
Domains provided by BTC.US
The .btc domain name provided by BTC.US supports users to bind Stacks on-chain addresses and Lightning Network addresses, that is, users can receive and send Stacks ecological assets and Lightning Network assets through their .btc.
From this point of view, the .btc domain name of BTC.US is generated based on the Stacks chain. The data is stored in Stacks and serves more as an identity certificate in the Stacks network and its ecology.
3. BTCDomain: Provide paid .btc domain name based on Ordinals
BTC Domain provides .btc domain name service based on the Bitcoin Ordinals protocol. It is more like a comprehensive domain name service platform that not only provides domain name registration, but also domain name resolution and other related services. Committed to providing a user-friendly domain name service platform for the Bitcoin community, the product operates similarly to ENS on Ethereum.
If a user wants to obtain a domain name on BTC Domain, he first needs to have an Ordinals wallet address. During the registration process, in addition to paying the gas fee on the Bitcoin chain, he also needs to pay an additional annual service fee. You can choose to pay for up to 5 years.
When registering a domain name on the BTC Domain platform, fees will vary depending on the length of the domain name. The annual service fee for 4 characters is 0.01BTC (approximately US$280); for 5 characters, it is 0.004BTC (approximately US$112); for 6 characters and above The annual service fee is $0.001 (approximately $28). There is currently a 50% discount on the annual service fee for registration.
BTC Domain charges
The .btc and text domain names .btc provided by BTC Domain are also domain names based on Ordinals, but the two operating systems are completely different. According to the official statement, the .btc provided by BTC Domain is in Json format and has been designed with deduplication and anti-counterfeiting signatures in its initial design. Therefore, the .btc domain name registered through BTC Domain has been deduplicated to ensure uniqueness.
Compared with .btc of BTC.US, the .btc domain name data provided by BTC Domain is completely stored on the Bitcoin chain. It is a native domain name of Bitcoin and can be bound to the Bitcoin wallet address. Users can complete the Bitcoin transaction through their .btc domain name. Coin and inscription assets are received and sent.
In addition, the .btc domain name provided by BTC Domain can resolve not only Bitcoin wallet addresses, but also web content. This is a convenient solution for businesses, charities and individuals who want to create identifiable identities for their Bitcoin transactions. Currently, the .btc provided by BTC Domain supports parsing Tokenview, TP wallet, Foxwallet wallet, etc.
However, some users said that due to the official existence of BTCDomain, it is not as decentralized as text domain names. In addition, the fees paid by users using the leasing model are too high. In this regard, the official stated that it is precisely because of the existence of the BTCDomain team that more resources will be invested in the development of .btc, support for domain name development and management, and more application scenarios for the .btc domain name.
Bitcoin domain name market is growing wildly and is difficult to unify
Although Bitcoin domain names bring convenience to users in managing addresses on the chain, they are still in the early stages of development and the domain name service system is not yet complete. Since anyone can engrave the .xxx suffix on a text domain name, in the current Bitcoin domain name market, only text domain names have a variety of suffix characters (.btc, .sat, .sats, .ord, .xbt, etc.). In the future, perhaps There will also be .uniswap, .xen, etc. In a short period of time, it will be difficult to unify domain name suffix characters, domain name resolution methods, registration format requirements, etc. within the Bitcoin ecosystem.
Take the .btc domain name as an example. Although the btc character in the suffix is ​​easy to be recognized and spread by users, there are three different service providers and operating systems behind it. Although BTC.US’s .btc uses the btc suffix, its functions and usage scenarios are more biased towards domain names within the Stacks ecosystem; although BTC Domain’s .btc is Bitcoin’s native domain name and supports multiple wallet resolutions, due to fees and domain name registration Restrictions and centralization issues have been criticized by users for not being pure enough. Although text-type .btc is sought after by users because it has no follow-up fees and a relatively fair issuance method, it requires the community to organize and operate spontaneously. The application scenarios of text-type domain names in the later period and Resolution is still a problem. Currently, only Ordinals Wallet addresses support .btc text domain name resolution. Although these three .btcs are different in product design and operation mode, they are easily confused for most users.
Moreover, even if they are all text domain names (such as .sats, .ord, .unisat, etc.), the registration rules are not uniform. For example, some domain names support spaces, special characters, and emoticons, while some domain names do not.
Differences in text domain name formats, the picture comes from .btcdao
Domain name usage scenarios, especially address resolution, are also divided into various schools. For example, some wallets only support partial text domain name resolution. In addition, domain name resolution rules and domain name types are not unified between wallets.
For example, Ordinal Wallet supports .sats, .btc, .unisat, .xbt and other domain name resolution services; Unisat supports .sats, .unisat domain name resolution, and its online domain name market currently also supports trading of suffix domain names such as .sats and .unisat; TP Wallets, etc. support parsing .btc of BTC Domain. This means that users can only use the same wallet to use domain names to transfer and send and receive assets. For example, Xiao Ming's .btc domain name in Ordinal Wallet does not support TP wallet's .btc domain name address for btc transfers, etc.
In addition, the hype of text domain names outweighs the real applications. Although text domain names are valid for life once registered and there is no additional fee, the current application scenarios are single. Even most suffix characters do not have wallets to support address resolution and do not have the function of domain names. The transactions of these domain name characters are more about betting on future expectations. Once the wallet supports parsing, the price will increase.
In addition, it seems that everyone is equal when engraving text domain names, but this is not the case. Some users have engraven some 3D (3 characters) and 4D (4 characters) in batches before promoting certain suffix domain names. Domain name, and then come out to call for orders to increase the price of the domain name, and take advantage of the opportunity to make profits. Therefore, users need to understand the risks when investing in text domain names.
In addition to the chaos in the Bitcoin domain name market itself, the development of the decentralized domain name ecology itself has been controversial. Many people question whether domain names are a good business in the Web3 world? Taking the decentralized domain name leader ENS as an example, according to Dune data, there were only 15,702 registrations in May, the lowest level since June last year, while the number of monthly registrations was as high as 400,000 during the peak period in September 2022. Since September last year, the number of monthly registrations for ENS has been on a downward trend. The .bnb domain name project Space ID on Binance Chain has seen a significant decrease in attention since the airdrop became popular; the Bonfida (.sol) domain name project on Solana has only had 716 registrations in the past seven days.
Will Bitcoin domain names follow suit and become a short-lived product? Although judging from the current popularity, it is still in the early stage of brutal growth. Community organizations such as .btc, .sats, and .sat are actively exploring the market and attracting more wallets to support domain name resolution to expand more application scenarios. There may even be a dedicated text domain name resolution service in the future. As for which suffix character will eventually become the king of Bitcoin ecological domain names, it will take time and the community to choose together.
(The above content is excerpted and reprinted with the authorization of partner MarsBit, original text link | Source: ChainCatcher)
Statement: The article only represents the author's personal views and opinions, and does not represent the objective views and positions of the blockchain. All contents and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and transactions, and the author and Blockchain Client will not be held responsible for any direct or indirect losses caused by investors' transactions.
This article Bitcoin domain name BNS hype boom, is it an opportunity or a risk? First appeared in Block Guest.