Your IBAN’s equivalent, the ENS domain name, enables anyone to send cryptocurrencies to your wallet. You can give your public address a “nickname” by using ENS. As a result, rather of giving a buddy a long string of characters to type in, you will instead have a link like “Julia.eth,” which is immediately associated with your public address.
The ENS is a component of the native Ethereum ecosystem and was developed for smart contracts. It doesn’t experience the same security issues a DNS system has. On a centralised server, the DNS records for domain names and names are stored. Hackers can exploit them. Every year, DNSs and internet service providers are the target of thousands of attacks.
However, ENS records are secured by the Ethereum Blockchain and cannot be altered or erased.
Additionally, using an ENS domain makes all user interaction more clear and understandable. This presents users of the Ethereum blockchain with a special chance to create a wallet and differentiate themselves from other addresses.
A naming system called Ethereum Name Service (ENS) enables people to use simple-to-remember domain names as their bitcoin addresses. It is subsequently converted into a machine-readable address via the protocol. The DNS system that we use for the internet and this operation are quite similar. Additionally, it equips users with a tool that can streamline their online persona and assist them in entering the web3 space.
How we communicate and interact in the web3 world may be completely changed by ENS. This guide explains how and why this might be the case.
Ethereum wallet addresses can be inconvenient
Blockchain addresses for bitcoin wallets are challenging for the typical user to use, just as internet protocol addresses. Fortunately, computer scientists invested in the Domain Name System (DNS), which enables connecting human-readable domain names to IP addresses, and created domain names.
DNS pairs human-readable DNS names with IP addresses. You will be taken to the website if you enter beincrypto.com in your address box rather than 172.64.147.202.
The system still employs a design akin to the previous IP address layout despite all the technological improvements in the blockchain and cryptocurrency sectors. You will need the lengthy string of characters that makes up the recipient’s bitcoin wallet address in order to send them cryptocurrency. It is exceedingly unlikely and not recommended to remember that address because blockchain transactions are irreversible. This implies that even if you send money to the incorrect address, you will always receive it back.
Here is an example of an Ethereum (ETH) address so you can see how challenging the task is: 0xd0eAf74B8c5bF457C7a81c3fe277aDb6Ed32DCF4.
It’s a string of 42 characters that is frequently referred to as a bitcoin wallet’s public address. Addresses on the Ethereum network always begin with “0x,” making them easily recognisable.
The biggest problems with owning and using a blockchain address have to do with how difficult it is to share it with others and how likely it is that you will type in the wrong address for your cryptocurrency wallet and lose all of your money. It’s also vital to recognise that the majority of bitcoin users are still learning about and only now beginning to explore the technology. Some of them may undoubtedly shy away from dealing with lengthy strings of characters out of concern about making a mistake.
The Ethereum Name Services (ENS) enter the picture here.
What is the Ethereum Name Service?
An open, distributed, and expandable name system that communicates directly with the Ethereum blockchain is called the Ethereum Name Service.
The ENS serves as a domain name service, much like the DNS, by translating human-readable addresses like “name.eth” into machine-readable addresses like this lengthy hexadecimal string: “0xd0eAf74B8c5bF457C7a81c3fe277aDb6Ed32DCF4.
Users are now able to manage their bitcoin cash and assets by just utilising a human-friendly domain name thanks to customised ENS addresses. ENS domains are designed to replace usernames in web3, and they can store metadata, websites, content hashes, and cryptographic wallets. Owners can receive cryptocurrencies or NFTs by connecting all of their crypto wallets under a single ENS domain.
This means that transactions are secure and decentralised without the need for lengthy and complicated addresses. This lessens the possibility of typing the recipient’s address incorrectly when sending money.
The ENS may be an exact replica of the DNS system from the 1980s, but it has a different architectural design.
Because it makes use of a system named domains, the ENS is comparable to the DNS. The top-level domain and any associated subdomains are at the jurisdiction of the domain’s creator or owner.
Anyone can purchase domain ownership for their own exclusive purposes. Users who already hold DNS domains for usage on ENS can import their names for use with ENS. Since ENS is hierarchical, anyone can make subdomains for themselves or other people. If you own “name.eth,” for instance, you can create “pay.name.eth” and configure it whatever you like.
ENS is deployable on a number of test networks in addition to the Ethereum main network.
The ENS team
In 2017, the Ethereum Foundation’s Alex Van de Sande and Nick Johnson oversaw the initial development of the ENS. However, it split out in 2018 to form a new organisation under the direction of Nick Johnson.
The development of ENS is overseen by True Names LTD, a Singaporean nonprofit. The ENS team is made up of seasoned Solidity programmers and several former employees of the Ethereum Foundation.
In November 2021, the project released ENS tokens to the service’s users and established a decentralised autonomous organisation (DAO) to oversee it. The organisation with a connection to the DAO is called True Names Limited. Owners of ENS tokens are able to manage funds in the Treasury and make decisions regarding pricing and protocol updates, using their assets in a similar fashion to stockholders of a company.
The initiative was able to move away from grants by integrating ENS tokens into its funding mechanism. On cryptocurrency exchanges, the ENS tokens can be exchanged for US dollars and other cryptocurrencies. This offers the project’s creators a method of financial support.
The ENS Foundation
The ENS Foundation speaks for the ENS DAO. Participants in the DAO can get legal assistance from the foundation.
The ENS Foundation is a Cayman Islands-registered foundation limited by guarantee. Due to its non-profit status, neither its directors nor members receive dividend payments. The Cayman Islands firm DS Limited appoints one supervisor.
On the ENS documentation page, you may get more information on the ENS DAO and how the ENS foundation functions.
How ENS fares against DNS
Human interactions with web2 and web3 can be managed through the Ethereum Name Service (ENS) and the Domain Name System (DNS). DNS transforms an IP address into a URL, a human-readable string.
A human-readable string formatted as a URL is created from an Ethereum address by the Ethereum Name Service (ENS). Both activities resemble a phone book. A phone book can be used to seek up a person’s name and reveal their contact information.
As a component of a network of internet protocols, Web2 can operate in perfect harmony with the DNS. The idea behind the new, decentralised internet, known as Web3, is still in its infancy and faces many difficulties.
The main goal of ENS is to simplify web3 and facilitate the exchange of crypto addresses. As time goes on, more blockchain protocols will incorporate ENS into their web3 integration and support it.
Ethereum Name Service vs. Unstoppable Domains
Of course, there is yet another foundation working to make it easier for people to communicate with blockchain addresses. Unstoppable Domains, ENS’ primary rival, also provides transferable domains.
Built on the Ethereum blockchain are ENS and Unstoppable Domains. Users can construct and register a human-readable crypto address using both of them.
The philosophical underpinnings of these efforts do, however, differ somewhat. An open protocol that is accessible to everyone is ENS. It was created by a non-profit group and focuses on decentralisation and communal decision-making.
Unstoppable Domains is a venture focused on business. Many domains have “brand protection” to prevent others from using certain names, words, or phrases as their own. Despite the fact that the domain is not in use, some people have claimed that they are unable to buy domains with their names.
The payment process is one significant distinction between ENS and Unstoppable domains. Like regular website domains, ENS domains have a time limit on purchases, and you must renew your domain whenever it approaches expiration. The price will vary based on when you wish to purchase the domain because you must use Ethereum (ETH) to pay for it and there are fees.
However, by paying the gas charge only once, upon registration, you can secure your ENS domain for many years. Another intriguing feature is that anyone can renew your ENS domain’s registration, but doing so does not transfer ownership of your domain.
Unstoppable Domains just require a single registration, and there is no domain expiration. Additionally, they accept a variety of payment methods, including PayPal, cryptocurrency, credit/debit cards, and the Crypto.com app.
What makes ENS special
The ENS is created using an Ethereum smart contract and receives all network benefits. Because of this, it is more private, secure, and resistant to censorship than the internet’s Domain Name Service (DNS).
It only makes sense to use an internet-naming infrastructure like ENS domains if the future web3 is to be a decentralised and open infrastructure. ENS can readily communicate with other Ethereum-based smart contracts and apps since it makes use of the current Ethereum ecosystem.
The following are the key benefits of having and using an ENS domain:
merge several web services into one
Streamline your internet presence.
Identity for centralised user-owned storage
ENS serves as a router for addresses other than Ethereum, such as BTC, LTC, etc.
When money are received, a function that is related to the ENS name and a contract address can be called.
In order to host a website that is resistant to censorship behind the ENS name, the ENS domain might be linked to IPFS.
Users may link different addresses to different subdomains for various purposes.
How the ENS works
The foundation of ENS is two Ethereum smart contracts. The ENS registrar, which keeps track of all domains registered on ENS, is the first one. Additionally, it keeps three significant pieces of data for each domain. The domain owner, resolver, and caching period are these.
The second smart contract is the resolver. It transforms domain names into computer-readable addresses and the other way around. This smart contract associates the appropriate user, website, or address with each domain.
How to get your own ENS domain
You need an Ethereum wallet, such as MetaMask, and the ENS domains web app to create your web3 login. Start by looking for a domain name. You must finish the registration procedure after locating one. If the name is more than five characters, you must also validate two transactions from your wallet and pay the $5 annual charge. Once you have the domain, you can connect it to your websites and cryptocurrency wallets.
Under the same ENS domain, you can also create various subdomains such as email.rick.eth and website.rick.eth. The gas charge for each alteration, which is based on the day and hour of the modification and occurs directly on the Ethereum blockchain, may vary.
It’s also important to remember that ENS domains are hard to come by and that the process is quite similar to buying a DNS name. Some crypto enthusiasts buy a number of ENS domains in the hopes of selling them later when more people and brands start using web3, as this is still a relatively new aspect of web3. Consider the sale of “exchange.eth” for 6,660 ETH and “weather.eth” for 300 ETH.
The ENS register also supports the most widely used DNS names, including.com,.org,.io, and.app.
What is the ENS governance token?
ENS is a totally decentralised open-source protocol. A DAO made up of community members who own ENS tokens oversees the community.
The ENS token-using community controls and entirely governs the ENS DAO. This currency serves as both a governance token and a utility token, enabling users to vote on proposals and influence the protocol’s future course. If they own ENS tokens, anyone can vote on proposals on the ENSDAO. No modifications to the protocol can be implemented without a vote by the governance, as with any DAO.
ENS tokenomics
An ERC-20 token is the ENS governance token. 100 million ENS tokens are available in total.
Developers distributed 25% of ENS to people who had registered for an ENS domain before October 31, 2021, in order to disperse it among the community.
Distribution of tokens:
50% of the local treasury (ENS DAO)
25% Airdrop to holders of.eth
25% of ENS participants
The tokens were sent out by the developers to wallets with ENS domains. The distributions were determined by how long a person had owned an ENS domain.
This means that while domain owners who have been around for a while received significantly greater allocations, casual users were able to get tokens valued at tens of thousands of dollars during the airdrop.
The amount of ENS in circulation as of May 2022 is approximately 20.24 million. The coin is now trading at about $14, and its market capitalization is $279.6 million. The price of ENS may decline and reach $1.16 by the end of 2022 and $0.40 by the end of 2027, according to WalletInvestor.
The most well-known centralised cryptocurrency exchanges, such as Binance, Coinbase, Kraken, and others, all offer ENS. Additionally, it is on DEXs like Uniswap and SushiSwap.
What can you do with ENS?
Users of cryptocurrencies can primarily utilise ENS to replace their lengthy addresses with easier-to-understand domains for crypto operations. An ENS that looks like “name.eth” is simple for humans to remember, but a string like “0xd0eAf74B8c5bF457C7a81c3fe277aDb6Ed32DCF4” is nearly impossible.
They will also save time and avoid potential typing errors when connecting to a new DApp that requests their wallet’s address.
It will be simpler for anyone wanting to transfer your funds or any other details, such as your website or social network handle, thanks to ENS domains, which personalise wallet information. By preventing people from impersonating you and stealing money from your friends or colleagues, this tool can prevent fraud.
ENS could be at the heart of web3
The ENS is a component of the native Ethereum ecosystem and was developed for smart contracts. This indicates that its security and transparency are inherited, as contrast to DNS records that are held on centralised servers and are therefore still subject to hacker attacks.
The complexity of cryptography can deter newcomers from becoming involved. By facilitating crypto adoption and increasing its use, ENS removes this roadblock. The machine-readable public addresses are transformed by ENS into brief, memorable connections that enable interactions and transactions with any cryptocurrency or NFT. All wallets, websites, and subdomains will be linked together under a single link, making cryptocurrency more approachable and less complicated.
Over time, we might observe a general increase in acceptance as new bitcoin users have easier access to blockchain addresses. ENS and other comparable incentives are essential for the success of the adoption of cryptocurrencies worldwide.
