What is an NFT domain?

Non-fungible token domains are blockchain domains, i.e., domains based on blockchain technology. Unlike Web2.0 websites, the data of these domains and websites linked to them are stored in a decentralized manner. Anyone can register a new NFT domain name, but addresses ending with .crypto or .nft tend to carry a higher price tag.

The basics of NFT domains

To understand how NFT domains work, it’s important to understand what a non-fungible token or NFT is. An NFT is a unique, digitally protected object and is widely used for digital artworks. If an artist creates an NFT for a GIF or a video, for example, they can then sell it, including associated rights that are individually defined. In many cases, an NFT is therefore a kind of title deed for digital objects.

Blockchain technology is the basis for NFTs. Object information is stored in the blocks strung together to form a chain and is stored decentrally in a peer-to-peer network.

What are NFT domain names exactly?

The same technology is used for an NFT domain. The blockchain contains information about the owner of the domain as well as the content of a website or domain. The NFT domain is stored in a wallet, just like cryptocurrencies or NFTs. For this reason, NFT domains are often referred to as crypto domains. They are independent of the actual internet and any third-party providers. NFT domains are also used to facilitate cryptocurrency trading.

There are several providers that specialize in NFT domains. A few examples of available domain extensions are:

  • .x
  • .crypto
  • .wallet
  • .bitcoin
  • .888
  • .nft
  • .blockchain
  • .bnb
  • .defi

Unlike domain endings (top level domains), which are officially released by ICANN, NFT domain endings are released and managed by the respective providers. These can be various players of the Web3, such as Unstoppable Domains which specializes in NFT domains.

The fact that NFT domains are not released by ICANN means that they are not registered in the root directory of the Domain Name System (DNS). Therefore, they cannot be accessed across all browsers or only with the help of a plugin. Another problem could be that ICANN could, in principle, approve the same top-level domains for the official Domain Name System in the future.

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How does an NFT domain work?

To understand how it all works, you first need to understand the underlying technology (blockchain) as well as traditional domains.

Traditional domains

Communication over the internet is based on numeric IP addresses. To establish a connection to another computer and communicate via it, a computer first needs an IP address. IP addresses consist of a partially random sequence of numbers and are therefore very difficult to remember. In addition, most IP addresses change periodically. The DNS protocol was developed to make it easier for users to communicate over the internet. This is where static, text-based URLs (domains) are mapped to corresponding IP addresses. A hierarchical directory of DNS servers is used for this purpose. This means that users only have to remember a simple URL, e.g. apple.com.

But these domains can only be managed and allocated by authorized organizations (domain registrars and domain registries), and this right is in turn granted by ICANN. So you can see that the control over the DNS as well as all domains can be traced back to a single central organization.

Blockchain and NFT Domains

NFT domains differ from traditional domains primarily in terms of administration. With traditional domains, a domain’s “ownership” (i.e. the person that is allowed to host their website under a domain name) is controlled by the responsible domain registry. In addition, the domain “lookup” (i.e. mapping to an IP address) is done via the central DNS.

For NFT domains, on the other hand, ownership is not verified by a central organization, but by the blockchain itself on which the domain was created. This is usually done by means of personalized smart contracts that are fulfilled by the nodes on the blockchain. Depending on which blockchain the NFT domain was created on, this process may look different. The lookup of a domain address is also performed decentrally via the blockchain.

In addition to decentralized management, there are a few more possibilities that NFT domains offer. First, analogous to IP addresses in traditional DNS, they also have an associated address, namely a crypto wallet address that can be used for trading cryptocurrencies. In addition, NFT domains themselves are NFTs, and therefore can be considered unique digital objects. NFT domains can also be traded. Both this trading and the verification of cryptocurrency transactions also take place via the blockchain.

Advantages of NFT domains

The fact that an NFT domain is 100 percent yours and you can host websites independently from the “traditional” internet is one of its advantages. You can also use the domain to log in to other decentralized applications (DApps) and turn your wallet address for trading cryptocurrencies into an easy-to-remember URL. Instead of a complicated string, you then buy and sell via your NFT domain. Since most browsers don’t yet offer native support for NFT domains, this is probably the most common use of these domains today.

Unlike traditional domains, which incur an annual fee, NFT domains are registered once and require a one-off payment. An NFT domain is yours permanently, without incurring additional fees (domains ending with .eth are an exception). However, the data for your domain is then stored on the blockchain. So if this blockchain should cease to exist one day, you would no longer be able to prove that your domain belongs to you.


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How to register an NFT domain name

NFT domain names are often traded on NFT marketplaces like OpenSea and typically purchased using cryptocurrencies. Some providers allow you to purchase the NFT domain directly and pay in currencies like US dollars. NFT domains cannot yet be registered with classic domain providers that act as registrars.

Buying or registering with a provider like Unstoppable Domains is similar to buying a “classic” domain name:

  1. Simply enter the desired domain name into a search bar to view the availability and prices for the available domains. The latter can range from less than $100 to several thousand US dollars.
  2. To register, you just need to link your Crypto Wallet (this must be supported by the provider). 1. After payment, the NFT domain will then be “minted” and stored in your wallet.
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