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Review of the Namecoin cryptocurrency

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Cryptocurrency Namecoin

 

The majority of computer users knows or at least has ever heard about DNS - domain names system with the distributed structure. Everybody got used to this designation and forgot about convention of this distribution.

The problem is that DNS is supervised by the state, as it has a large number of servers under control from recorders. It may seem, that in this case the operation of the own cryptocurrency is impossible. But actually it is not so.

BitCoin became the first cryptocurrency system, whose founder (Satoci Nakamoto) was aiming to generate alternative currency in the world. We should keep in mind the fact, that the currency is strictly supervised by all governments of the world. Strangely enough but BitCoin does not only exist still, but is very successful. More and more people are excited by possibility of cryptocurrency use, released from regulated currencies.

 

Features of Namecoin

The idea of creation of cryptocurrency similar to Bitcoin, was taken as a basis by experts from Namecoin - cryptocurrency systems of new generation. The same as in the basic project, nobody can regulate the rate of "currencies" - it depends only on demand and mathematics. It should be noticed, that system Namecoin is not under control of specific organisation. Its issue and transfer between participants are supervised by users. Each one of them has a database with all transactions history on the personal computer.

The same as Bitcoin, the system Namecoin uses a principle of peer-to-peer network. The system is not supervised by any administrative centre. Because of it the state cannot stop work of the system completely. That is even if representatives of the state structures would want to stop the work of Namecoin completely they should implement one of two ways:

• To excel computing capacities of system in order to attack for the full destabilization. At present computing capacities are so great, that the state should spend hundred millions dollars for purchase of the similar equipment. Let's stress, that Namecoin cryptocurrency does not have any administrative centre, each person is an own administrative centre for himself.

• To stop work of Internet providers completely. It is also impossible, as one should have the purposes proved by the legislation for fulfilment of this type of actions. As at present the legislation cannot charge anything the cryptocurrency, it is impossible to stop work of providers illegally. Even if such variant would be realised, the state would sustain huge losses.

The transactions system in Namecoin differs from Bitcoin a little bit. At present they are working constantly in order that the pair «resource record» - «domain name» did not lose the actuality.

 

Work with Namecoin and mining inside of the system

Let's examine the ABC of word in Namecoin system. Firstly you should download the special client and a new wallet. The following can be done to receive Namecoin:

а) to buy Namecoins at specialised stock exchanges (now there are about twenty of such stock exchanges);

b.) to earn with the help of Namecoin mining;

c) to transfer Bitcoins to Namecoin.

The main difference from Bitcoin is that for work with Namecoin one should get the own domain name in .bit zone. The only thing that shall be done further is to watch over actualisation of the information on the registered domain and to prolong it from time to time. Of course it can be done by direct payment with Namecoins or cash money (firstly to transfer money to Namecoin, and then to pay).

Note that nobody has the rights to take away your registered domain. It can be destroyed only if you do not pay for it.

The mining in the system has the advantages. It should be noticed, that nowadays there are the clients, capable for "double mining". That is, the person who has downloaded this client, can simultaneous mine on Bitcoin and on Namecoin. Visually the client does not differ from the similar one in Bitcoin. The only one difference is that the client redirects users on servers and ports, where Namecoin works. Mining can be performed independently and by means of special pulls.

Forecasts of the project development

Developers of the project do not update their client for a long time. Besides it there is one more problem. For the work of root servers they should be accepted by ICANN - the American corporation regulating work of domain names. But it should be noticed, that the system is still being developed. So the simplified work and the smaller time necessary for generation of new blocks chains, create prospect for development.

(The portal Investtalk.ru is not responsible for the content of author's article)

 

Investment component

Let's consider Namecoin from the investment point of view now. As it was mentioned above, the system is still being developed. Both considerable successes and failures are possible in its operation.

At the same time now the value of any cryptocurrency is defined by the its presence at popular stock exchanges, and by presence of services and stores, accepting this "currency". Namecoin is present at the most popular stock exchanges, has average trade turnovers.

Against the background of the general interest and "promotion" of cryptocurrencies in world news, only since the middle of November the rate of Namecoin has jumped up from 3 to 15$ for one unit of cryptocurrency. Then however there was a significant rollback and falling on 50 %. "Currency" has returned to the level 5-7$ for unit. We see this level as comfortable enough for purchases, however it is necessary to be careful and to realise all the risks by purchasing cryptocurrencies. It is necessary to keep in mind, that at all incompleteness (or speaking directly - absence of standard base), having fixed any profit using cryptocurrency, it is necessary to pay taxes under the rates stated by the Tax Code of the Russian Federation or the country, which resident you are.

What about the services and shops, accepting cryptocurrencies, they will be reviewed in the following articles.


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