Domains Take On the Economy - How Safe Are Domains?
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In a blog posted on CircleID, Mark Jeftovic covers this topic completely. First he goes into whether or not domains can be treated as an “asset class” as compared to the traditional assets found on Wall Street since its inception. Basically he says that domains, and the Internet in general, haven't been around long enough to make any “full proof” predictions determining where the industry is headed. I already mentioned the .com explosion/bubble burst from 2000-2002.
He also quite poignantly points out that with the unprecedented growth of the Internet, domains themselves might possibly become obsolete in the very near future. With minor developments already into Web 3.0 technologies like Semantic Web, which will allow for computers to be more integrated and more easily share data, there's no telling where the isolated world of separate domains will fit into all this.
As of now, the Domain Name system (DNS) allows computers to locate each other across different networks by transforming the hostname (www.whatever.com) into an IP address. It also serves as a worldwide keyword-based redirection service, quite handy for direct navigation. Jeftovic specifically speculates that DNS as a method of network communication will not last. He says, “Even if that event is 50 years out, paying 100X on a domain may not work out so well.”
All investors since the beginning of time have always fallen back on the “safe bet” during times of recession. What will always have value no matter how bad the economic crisis is at the time? Jeftovic brings up a very typical, obvious answer: gold. When has gold not been worth anything? For whatever reason gold can be used to get just about anything, such as food, shelter, clothing, etc – all things that people will need no matter what. Are they boring? Yes. Are they a safe investment? Indubitably. But, as Jeftovic says, “Nobody must surf the net or send email.”
There is a reason why we use the term “safe” when talking about those types of investments; it's because they're protected. There will always be a market for things people need, pretty much guaranteeing there will always be opportunity to make boatloads of money off of them and that nothing will ever take it's place. As you can tell, it's quite possible that something can and will take the place of domains, but for the time being, they're merely at risk of being more overrated than the latest Judd Apatow movie.
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