What is Namecoin?
A Beginner´s Guide to Buying, Selling, Using, and Mining Namecoin:
An In-Depth Namecoin Guide by Black Chip Poker
Cryptocurrency Home | Namecoin
The man, the myth, the legend: Bitcoin. The popular cryptocurrency has taken the world by storm. It allows users to send money all over the world, without the large fees and long transaction time from a trusted third party. The technology that powers Bitcoin is blockchain. But blockchain is not unique to Bitcoin. And the way it has been used to free money is now being implemented into other areas of life. One area being the internet through the cryptocurrency Namecoin.
What is Namecoin?
Namecoin (NMC) is a cryptocurrency and the first fork of the popular altcoin Bitcoin (BTC). It’s designed to be an open source technology that improves various functions of the internet’s infrastructure, specifically in DNS and identities. Meaning, Namecoin frees the inner workings of the internet, in the same way that Bitcoin frees money.
Namecoin uses open source technology that has made cryptocurrencies so successful, and applies it to the internet. It provides improvements to privacy, security, decentralization, and resistance to censorship.
Cryptocurrencies are an alternative form of money that is digitally based and operates on a blockchain. The definition of a blockchain is a peer to peer database where a network of computers sync together to manage and operate the blockchain. The blockchain serves multiple functions, with the primary function being the ledger for the transactions of the coin. All of the transactions are securely and permanently recorded in blocks, and open for everyone to see. There are many helpful websites to further define blockchain and Namecoin, Reddit being one of them.
How Do I Buy Namecoin?
Namecoin is not a complicated coin to buy, but it does require a couple steps. First, you’ll need to download the Namecoin wallet. The wallet allows you to store and manage your Namecoin tokens. The next step is to purchase Bitcoin. This is because Namecoin can’t be purchased directly with a fiat currency, but must be traded for through a coin like Bitcoin. Bitcoin is easy to buy and can be purchased with credit card or even with cash at a Bitcoin ATM. Finally, use an exchange site like Poloniex or Shapeshift to convert the Bitcoin into Namecoin.
How Do I Turn Namecoin Into Cash?
When you’re ready to sell your Namecoin tokens, the same above steps are followed, only in reverse. Poloniex and Shapeshift will allow you to transfer your Namecoin tokens back into Bitcoin. Then, you can use a Bitcoin ATM to convert to a fiat currency, withdraw money in USD, and complete your Namecoin cashout. Other websites like Coinbase also allow you to turn Bitcoin into a fiat currency as well.
How To Use Namecoin?
Namecoin can be used in a variety of ways. The main way Namecoin can be used is by investing in the coin and storing it in your wallet. The Namecoin token is a form of currency that can be used to buy, sell, or trade for other altcoins. Depending on the value of the Namecoin token and its exchange rate into other currencies, you can decide if you’re going to buy, sell or hold. The price of the Namecoin token will fluctuate over time, depending on demand for the coin. Many websites take coins like Namecoin for online gaming, including Namecoin poker.
Namecoin can also be used to improve the infrastructure of the internet. Because it’s built on a blockchain which is open-sourced, the web browsers and domains that are utilizing Namecoin will be as well. For example, Namecoin can help protect free speech on the internet and provide decentralized validation services to websites based on the blockchain community.
Namecoin can accomplish this and more, because of the decentralized DNS system. DNS stands for Domain Name Server, and links the popular domain name of a website as we know it, with its actual IP address. Currently, this process is achieved through DNS servers, which, like just about everything else in life, are channeled through centralized organizations. These centralized organizations include the government and large corporations, who have the power to control our internet usage because they control the DNS servers. Basic rights like free speech and privacy can all be violated due to DNS servers being centralized. Namecoin opens DNS to the blockchain, decentralizing DNS to the public.
What Is Namecoin Mining?
Mining Namecoin is where users devote their time and computing power to help operate the blockchain. The main function mining serves is validating the transactions that take place with the coin. Miners do this by running by running programs that deliver keys, which secure the blocks into the chain. Calculators on high powered computers are used to evaluate profitability possible in mining the coin.
How To Mine Namecoin?
Mining can be challenging, but rewarding. Successfully mining a node on a blockchain and solidifying a transaction onto the chain is rewarded with more of the coin mined. The profitability of mining a coin is dependent on the time spent mining, and the market cap of the coin given in return for mining. The more a coin is mined, the more the market cap will grow, subsequently growing the value of the coin. Namecoin uses a merged mining system, where miners can concurrently mine multiple blockchains.
NMC can be mined in a standard proof of work protocol, using a computer’s CPU to generate a hashrate in seeking to solve the complex equations necessary for block creation. Notably, however, NMC can be mined as ‘merge-mining’, where NMC are generated as a by-product of mining BTC. In this way, a miner is able to generate NMC while also mining BTC. This can be done both individually and through a mining pool. However, without specialized hardware, such as ASICs for BTC mining, miners should probably seek out a more CPU-friendly coin to mine.
How Will Namecoin Scale?
Scaling is the growth (or lack thereof) that a coin experiences as it grows in popularity. The more transactions that are made with a coin, the more computing power is necessary to help mine and operate the blockchain. Because it is a fork of Bitcoin, Namecoin has similar scaling tendencies to Bitcoin. For example, both have a block size limit of 1 MB. By taking a look at the price chart for Bitcoin over the years, you’ll understand the hurdle that needs to be jumped in order for the coin to operate properly. Considering that Namecoin is an information coin, 1 MB makes it difficult to scale easily. That being said, the chart for Namecoin shows its decline in popularity over the last couple years, making transaction time reasonable.
No coin has been as successful as Bitcoin has been in terms of monetary value. However, the idea that powered Bitcoin is being implemented into other areas of life. Namecoin is one such example, using blockchain to free the information on the internet. While it may not be as valuable as Bitcoin, it certainly has been successful in reaching its goal.