Ethereum Name Services: Is It A Good Buy?

Last Updated May 16th 2022

6 Min Read

Thinking of investing in ENS? Find out more about this promising crypto project with immense growth potential.

Cryptocurrency is highly technical. It can be overwhelming for first-time users and non-tech savvy individuals entering the market. For example, to send a crypto payment, investors need a long public wallet address composed of various digits, letters, and special characters. This is the problem that Ethereum Name Service solves.

The Ethereum Name Service (ENS) is a lookup system. It links information to a name. The protocol offers a secure and decentralized way to address resources via human-readable names. It is a totally distributed domain-name provider that allows anyone to buy and manage domains. For instance, instead of sending ETH or ERC 20 tokens to a wallet address along the lines of “8e866f012fb8fb….,” you could send them to “realsatoshi.eth.”

So is Ethereum Name Services (ENS) a good buy? Learn more about the network fundamentals, unique offerings, and the future roadmap to make an informed investment decision.

Ethereum Name Services: An Overview

The Ethereum Name Service is a naming service for wallet addresses, hashes, and other machine-readable identifiers. It turns difficult-to-read strings of data into easily readable addresses. It works similarly to the Domain Name System (DNS) used for websites.

Initially, ENS auctioned popular six, five, four, and three-letter domain names to interested users using the Vickrey auction format. Each name ending with .eth can be attached to multiple cryptocurrency addresses, hashes, and other information. ENS users can easily purchase names without an auction and rent them by the year. Prices are dependent on the length of the name they want to rent.

The project allows users to display long Ethereum public addresses in a simplified text-based way. This makes it easier to share, use, and remember addresses and other data. Turning machine-readable numbers into human-readable alternatives is important to improve blockchain adoption. However, ENS is not just limited to wallet addresses. It can be used to represent transaction IDs, hashes, and metadata, all commonly found in the cryptocurrency world.

The ENS is built on Ethereum’s smart contracts, making it more secure, private, and resistant to censorship than Domain Name Service (DNS). The team behind ENS views internet-naming infrastructure as a fundamental component, believing it to be open, decentralized, community-driven, and not-for-profit.

On a technical level, the ENS can use the existing Ethereum ecosystem, meaning it is highly programmable and can interact with other smart contracts outside of naming. ENS has positioned itself as a unique, growing crypto project, making the ENS token a good buy.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Ethereum Name Services: Pros

Solving Privacy Concerns

A concern that Ethereum Name Service users avoid is the current lack of privacy in the blockchain sector. Various tracking services and forensic firms have reduced user privacy to its lowest levels since the crypto market began over a decade ago. The Ethereum Name Service helps to restore some of this lost privacy through its proprietary technologies, making it one of the top cryptos to buy now.

Minimizes Human Error

The Ethereum Name Service reduces human error. Sending crypto to a long and complicated alphanumeric address will always be full of unease and doubts about accuracy. For one, there are no refunds on public blockchains. Once you send your payment, those funds are gone forever unless the other party feels kind enough to send your funds back. Therefore, there can not be any room for error.

The Ethereum Name Service helps prevent human errors and streamlines the entire crypto payment process. You can set up your domain to be your name or company to further improve your wallet's recognizability. This approach helps drive new crypto adoption because new users are more likely to feel comfortable making a payment this way instead of using the ETH address feature.

Open Network

ENS Users enjoy an open and permissionless payment experience when they join the platform. The team behind the project continues to promote and support further third-party development. Developers can find helpful resources, support, and guidance from the community. Experts believe ENS to be a good buy in 2022 due to various such factors.

Ethereum Name Services: Cons

ENS has gained popularity over the past few months, mainly due to its distributed and open nature that ENS domain names can be set to any records, even censored and malicious contents. However, experts have identified several security issues and misbehaviors, including traditional DNS security issues and new issues introduced by ENS smart contracts. Attackers have reportedly abused the system with thousands of squatting ENS names, a number of scam blockchain addresses and malicious websites, etc.

However, it is noteworthy that the ENS team is working to build an open and trustworthy name service.

Ethereum Name Services: Future Roadmap

The protocol plans to integrate the DNS namespace, meaning that owners of any internet domain can claim them on ENS. This will position ENS as a parallel extension of DNS, creating cross-platform Web 3.0 usernames that will become a core component of our decentralized identity. Because it makes the blockchain and crypto world so much more accessible to beginners, it is becoming a fundamental component of the future crypto space. These factors make ENS a good buy in May 2022 and beyond.

ENS: Buy? Sell? Hold?

Projects like ENS demonstrate innovative ways developers seek to make cryptocurrency accessible to all. For example, removing long Ethereum addresses reduces the technical boundaries for these users. As such, more people feel comfortable making crypto payments. In the end, these developers understand that usability is what determines the success of a cryptocurrency. The Ethereum Naming Service (ENS) plays a vital role in the market, making it a good buy for 2022.