Bitcoin and Cryptocurrency Technologies

10.2 A Few Altcoins in Detail
Now we’re going to focus on a few of the oldest altcoins and study their features in more detail.
Namecoin.​We’ve seen how Bitcoin’s block chain is a secure, global database. Once data has been
written to it, it is tamper‐proof and its inclusion can be proved forever. Could we modify Bitcoin’s
design to support other applications of secure global databases, such as a naming system?
We’ll need a few ground rules to make this database more useful for non‐currency applications. First,
we agree to view data entries as name/value pairs, with names being globally unique. This allows
everyone to look up the value mapped to a name, just like a hash table or a database with a
primary‐key field. To enforce the global uniqueness of names, if a name/value pair has the same
name as a previous database entry, then we view it as an update to the value rather than a new entry.
Second, we agree that only the user who initially created the entry for a particular name is allowed to
make updates to that name. We can easily enforce this by associating each name with a Bitcoin
address and requiring the update transactions to be signed by the private key for that address.
We could do all this on top of Bitcoin, just as we said in Chapter 9 that we could build any overlay
currency using Bitcoin as an append‐only log. But it’s simpler to do it in an altcoin because we can
take this gentleman’s agreement and write it into the rules of the altcoin. These rules would then be
inviolable and enforced by the miners, rather than requiring each user (i.e., full node) to check the
rules for itself and independently decide what to do if they are violated. Done right, it would even
allow SPV‐style proofs: a lightweight client would be able to submit a query (i.e, a name) to a server
running a full node, and the server would return a value for that name, along with a proof that the
returned value in fact the latest update for that name in the database.
That’s Namecoin in a nutshell. It’s a global name/value store where each user can register one or
more names (for a nominal fee) and then issue updates to the values of any of their names. Users can
also transfer control of their names to others. In fact, you can make a transaction that transfers your
domain to someone, and at the same time, transfers units of the Namecoin currency from them to
you. Since this is a single atomic transaction, it’s a secure way to sell your domain to someone you’ve
never met and don’t trust. As of 2015 Namecoin doesn’t support secure lightweight clients, but an
extension that supports this has been proposed.
Namecoin’s goal is to provide a decentralized version of the Domain Name System (DNS), the names
in the database being domain names and the values being IP addresses. You can’t use this by default
with an unmodified browser, but you can download a browser plugin for say Firefox or Chrome that
would allow you to type in an address like example.bit — any domain name that ends in .bit — and it
will look up the location in the Namecoin registry instead of the traditional DNS.
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