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Ethereum Name Service – What’s Human Readable Domain Name Good For?

Alex Lielacher
Last updated: | 5 min read

Nick Johnson and Alex Van de Sande of the Ethereum Foundation began experimenting with a solution to replacing the hex addresses employed in the Ethereum blockchain with human-readable addresses. Following burgeoning interest from the market for the solution, the Ethereum Name Service (ENS) was launched in 2017. And this past October, the ENS added multi-coin support, which means you can use one ENS address to accept and receive different cryptocurrencies. But the development does not stop here.

Source: iStock/CasPRO

This article will introduce you to the Ethereum Name Service, highlight the implications it may have on a global level, and discuss the response from the market.

What is ENS?

The Ethereum Name Service (ENS) is defined as a “distributed, open and extensible naming system based on the Ethereum blockchain.” Ethereum is a smart contract platform that boasts a large number of decentralized applications (dapps), a vibrant developer community, and a vocal user community.

However, smart contracts are unable to interact directly with human-readable names in an efficient way due to resource constraints in their architecture. As a result, Johnson and De Sande devised a system through which the fixed-length 256-bit cryptographic hashes employed within the Ethereum blockchain can be generated from human-readable names in an efficient and effective manner.

To achieve this, the ENS leverages a process called Namehash. Namehash derives a hash from a human-readable name while simultaneously preserving its hierarchal properties. Through leveraging Namehash, the ENS is able to derive the hash of any subdomain so long as it knows the hash of the parent domain. By leveraging this property, the ENS is able to support the hierarchal architecture, which is essential to its use as a domain naming system.

Within the ENS, names are represented as hex addresses while, to the user, a human-readable name is presented. ENS developers shed light on how it works stating: “For example, the namehash of ‘alice.eth’ is 0x787192fc5378cc32aa956ddfdedbf26b24e8d78e40109add0eea2c1a012c3dec(…) Starting with the namehash of any domain – for example, ‘alice.eth’ – it’s possible to derive the namehash of any subdomain – for example ‘iam.alice.eth’.”

Prior to being processed through Namehash, the human-readable names are normalized and standardized to ensure users get a consistent experience and result with the ENS. The standardization is called UTS-46 normalization. It includes the removal of invalid characters and the treatment of upper- and lower-case names are treated equivalently. Once finished, the ENS removes the need to input long hex addresses when interacting with the Ethereum blockchain. This is important because it is easy to make mistakes when inputting hex addresses due to their length and randomness.

In terms of architecture, the ENS is composed of two main components. These are the registry and the resolvers. The registry is a single smart contract that holds the records of all domains and subdomains on the Ethereum blockchain. For each domain, and subdomain the registry smart contract holds three types of information. These three data sets are the owner of the name, the resolver, and the caching time-to-live for all records under the domain.

Resolvers are the smart contracts in which the process of translating names into addresses, or other types of hashes and resources is executed. As referenced earlier, this is done through Namehash and UTS-46 normalization. Moreover, the resolver smart contract is able to execute the process in reverse, translating a hex address to its associated human-readable name.

It is important to note that the human-readable domain names registered on the ENS are non-fungible tokens. Non-fungible tokens are one-of-a-kind cryptographically secured assets. This is important as it ensures the ENS remains effective as a naming system. It would not serve its users if one domain name would send users to different locations on the internet.

The motivations

The ENS was designed to create a system similar to the DNS, which is the Internet’s Domain Name Service. However, due to the significantly different decentralized architecture witnessed in Ethereum, the ENS varies from the structure leveraged in the DNS. However, just like the DNS, the ENS holds a record of dot-separated hierarchical names called domains, with the owner of the top-level domain having full control over subdomains. For instance, if X owns ‘x.eth’, they can create ‘blog.x.eth’ and configure it as they wish.

For users of the Ethereum main network, the ENS definitely makes things easier. It improves the usability of dapps by returning human-readable names instead of long hashes through reverse resolution.

Beyond the Ethereum ecosystem

The misconception is that ENS is only applicable within the confines of the Ethereum ecosystem. However, the system is a secure, decentralized way to name addresses both on and off the blockchain.

ENS resolves Ethereum hex addresses. However, it can also be used to resolve IPFS (the InterPlanetary File System) and Swarm hashes for decentralized websites as is already being done by Protocol Labs. Additionally, ENS is also able to resolve Tor .onion addresses, making things easier for those with significant privacy concerns.

After launching the ENS added multi-coin support in October, developers are also working on interoperability with the DNS, to allow people to use their .eth domains on the DNS and vice versa.

The market responds

While the ENS was launched in 2017, it took time for the system to gain traction in the blockchain community. Its launch was marred with bugs, leading to a somewhat negative public perception. However, as developers have worked to fix the bugs, held bug bounties, and extended functionality for the system, its popularity has grown significantly.

To fairly distribute ENS short .eth names, Ethereum held a massively popular auction on the OpenSea marketplace. The auction began on September 1 and ended on November 5, with the data confirming that it was one of the most popular NFT auctions at OpenSea during that period.

Those who won .eth addresses for their names began displaying them on their Twitter handles, leading to a viral movement.

However, the auction process raised important questions about people who vied for addresses in order to sell them in the future. This practice, known as address squatting, is popular on the DNS and ENS likewise. For instance, a twitter user said: “Yes, I personally am very short all of these Alexa name squatters. 16k+ bucks for Amazon.eth while mixer.eth goes for 40? I don’t see that money ever being made back. Value in ENS will come from use, not speculating on some future buyout.”

Ethereum contends that due to the fact that it is working on DNS TLD integration, the fears of popular name squatting will be neutralized in due time. Additionally, the trends in naming are reminiscent of the early days of the internet where users bought names related to sex, gambling, and games. The ENS is now open to the public. You can register a .eth domain almost instantly through a short process.