A blockchain domain is pretty similar to ordinary domains.
Whereas domain names serve to identify internet resources, such as computers, networks, and services, with a text-based label that is easier to memorize than the numerical addresses used in the Internet protocols, blockchain domains are meant to make hard-to-remember cryptocurrency addresses easier to remember.
So, rather than copy and pasting long complicated cryptocurrency addresses, users can simply type in a blockchain domain name.
This should reduce the chances of sending cryptocurrencies to the wrong address.
While the goal is noble, Microsoft is worried.
For more than many years, hackers register new domains to hide their illicit activities, and to phish people out of their personal data.
It was in its October 2021 Digital Defense Report, that Microsoft called blockchain domains "an emerging threat outside of regulation."
The company said that "threat actors on the internet (that) have started utilizing blockchain domains as part of their [...] cybercriminal infrastructure and operations."
This, is already a common complaint aimed at blockchain-related activities and products like cryptocurrencies.
Microsoft added that "blockchain domains work differently (from) traditional domains that are purchased through internet registrars operating through the ICANN-regulated DNS (opens in new tab) system [...] and pose challenges from both a utilization and disruption standpoint."
To understand how big the threat can be, in the whole year of 2021, the number of newly registered .com domains was around 126,000.
The number of .eth (Ethereum Name Service) registrations in July was more than 378,000.
Through blockchain domains, people have the opportunity to create disruption.
This is because blockchain domains are decentralized by nature.
The domains are built on blockchain technology, which makes them immutable and tamper-proof. And also because they're powered by blockchain, blockchain domains give users more ownership over their online spaces and identities.
And whereas traditional top level domains function as an "internet phone book" to match domain names with numerical, and hard to remember, IP addresses, blockchain domains can be used for much more than just decentralized website hosting on IPFS (Inter-Planetary File System).
Blockchain domains can also be considered NFTS: the domain’s ownership is stored just like any transaction in the ledger, which anyone can track and refer to, and they can be sold, and bought.
Researchers said that it's only a matter of time before blockchain domains can take over top level domains and receive mass adoption.
