Namecoin (NMC)

Basics

• "Namecoin is a distinct altcoin that thrived on the same proof-of-work algorithm as Bitcoin but stores its data separately within its own blockchain. It was engineered by Vinced on April 18, 2011, following an earlier BitDNS discussion on the Bitcointalk Forum in December 2010. While its market cap was valued at $5,306,810 in May 2013, in 2018 Namecoin is #155 in the list of cryptocurrencies at Coinmarketcap.com, and its capitalization is only $27,642,053."
• Currency
• Notary
• No Premine or Presale, cloned from BTC
• SHA-256d
• Proof of Work
• Block Time, sec: 600
• Reward, coins per block: 50
• Difficulty cycle, blocks: 2016
• Txs Confirm: 6
• Coin maturity confirm, blocks: 120
• Is being used by ZeroNet

History

• Created in april 2011, First altcoin, was created as an attempt at forming a decentralized DNS, which would make internet censorship very difficult. Soon after, in October 2011, the second altcoin, Litecoin was released.
• From this Bitcoin.com article (21-9-2019):

"Namecoin is a project that started in 2010 when a few early blockchain developers including Gavin Andresen and Satoshi talked about using the BTC chain for a domain name system (DNS). That December, developers offered a reward for a DNS system and Namecoin (NMC) was born from these discussions and ideas. After months of DNS and Bitcoin discussions, Namecoin was officially announced on April 18, 2011. The NMC network is a separate blockchain that creates a domain naming system and the NMC code is based on the BTC codebase releases of that timeframe. Namecoin uses a system called merged mining and on block 19,200 the NMC network allowed users to mine both BTC and NMC at the same time. This move made it so NMC miners didn’t jump from one chain to another when profitability changed.

NMC trading and mining is still quite active today and it’s one of the oldest cryptocurrencies in existence. Just like BTC, the NMC supply is limited to 21 million, and currently there’s a circulating supply of 14,736,400 NMC in existence. Essentially, domain name value pairs are stored on the chain and attached to coins. After 12,000 blocks, names expire unless the owners renew the domain. Initially, the project was fairly popular and attracted other projects like Onename which has since rebranded to Blockstack.

However, in 2015, Harry Kalodner, Miles Carlsten, Paul Ellenbogen, Joseph Bonneau, and Arvind Narayanan from Princeton University released a dreary empirical study of Namecoin. The study noted that only 28 of 120,000 domain names tethered to Namecoin were used. That year, Blockstack founder Muneeb Ali explained that his project would move to to the BTC chain due to the mining pool Discus Fish dominating 60-70% of the NMC hashrate. NMC touched an all-time high (ATH) in 2013, jumping to over $10 a coin, but it never saw those heights again. During the bull run of 2017, NMC spiked to $5 and today the coins trade for $0.55. Namecoin is the first major project to leverage the BTC chain."

Merge Mining

• “A solution to scaling is “merge mining”, a technique where there are many chains, but all chains share the same mining power (or in proof of stake systems stake). Currently, Namecoin gets a large portion of its security from the Bitcoin blockchain by doing this.”
• Prime example why merge mining does not work. Very low NMC reward compared to the merge btc reward. There is not enough incentive to do merge mining therefor. If a big mining pool would adopt it, they could have total control over the smaller coin. At one point one pool (Discus Fish) had 70% power in NMC, quite the disaster.