In this article, we will be talking about the practical use cases for ENS domains and how they will simplify Ethereum and blockchain technologies for the average Joe. ENS domains are the readable domain names for Ethereum wallet addresses. So the long address 0x6fg5y555cns gets translated into 123.eth.
The main topics that will be covered are risk management on NFT mints, identity management for simplified logins across multiple platforms, IP and MAC address replacements via ENS, stabilizing gas fees during large events, verifying documents, and protecting owners of sellable assets. ENS will simplify how we navigate web 3. The exact same way readable IP addresses via DNS gave us the internet we know and love will be the same way readable ETH addresses via ENS will give us the web 3 we will end up easily integrating into.
How will ENS help the regular person who is new to web 3? How will ENS help improve safety going forward? How will ENS help validate ownership?
Minting Protection.
Let me ask you a question. Were you ever looking at getting into a minting process for an NFT, but did not want to connect your wallet to the minting website because it might be a scam website looking at stealing your assets? If the answer is yes there is a handy tool to mitigate the risk of getting your assets wiped.
This tool is called the Ethereum Name Service.
Hypothetically you wanted to mint a Bored Ape before it blew up. Now instead of connecting to Yuga Labs website what hypothetically you could do is send the wETH (wrapped ether) to “mint.bayc.eth.” Sending tokens to an ENS website mitigates the risk of not actually connecting your wallet. Because connecting your wallet opens the risk of you signing a smart contract that you actually did not read through. Also, it protects you from fraud by knowing the only valid mint address is “mint.bayc.eth.”
Identity Management.
ENS domains offer risk management and also identity management. With web 2 some of the main nuisances are the fact that you have to remember so many passwords for so many different websites. Signing in with Google is somewhat helpful, but Google is centralized and can delete you from the internet at any time thus wiping all of the accounts you use to sign in with it. With Ethereum, it is on a blockchain and the only way you get wiped out is if you consent to it.
With an ENS domain, you can add all of your web 2 accounts to the list of addresses within the ENS domain. (see image below)
Think of ENS domains as if they are decentralized calling cards. You have full ownership of these domains and the only way you lose access to them is if you sign them away, or if you lose access to the internet. We will eventually live in an age where the only thing you need to contact someone whether it be calling, SMS, video chat, and/or e-mail will be with an ENS domain.
Another aspect of identity management in relation to ENS is cybersecurity. ENS domains and smart contracts will kill many jobs in IT and cybersecurity. ENS domains and along with some basic education on smart contracts will make cybersecurity seem like child's play in the coming years. Imagine a world where you cannot spoof IP or MAC addresses? With ENS everything is a certainty it cannot be spoofed nor duplicated (unless you fall for the hidden character scam). With ENS the validators will be much more transparent and it will be easy to know if an unauthorized user is trying to gain access to your router, switch, host, and/or server. It will be easy to validate users on a network. In a nutshell; Wireshark, Ettercap, and Fing will be useless in the near future.
ENS Domains Will Replace IPv4, IPv6, and MAC Addresses.
The problem with our current IP addressing system is that EVERY network device requires an individual IP address and MAC address. Now imagine using one address for every single device you have. Instead of having an IPv4 of 192.168.0.1 for your router and then 192.168.0.3 for your phone, and 192.168.0.4 for your laptop you can simply have “simple.eth” for all devices that can receive an Ethereum blockchain connection.
Are you seeing how ENS will kill lots of IT jobs?
Here is an example of an IPv4 and IPv6 replacement. You own the ENS domain “john.eth.” You buy a router and an internet subscription. In the near future, all routers will come with Ethereum receivers instead of fixed octets (IPv4) or fixed hexadecimal (IPv6). Your IP address of the router becomes “john.eth” and you can change it out at any time and use the same ENS domain for multiple network devices. It merges MAC addressing and IP addressing into one. ENS is basically unlimited in the number of addresses it can have.
ENS Domains Will Help Stabilize High ETH Gas Fees
Think of people who own gas stations. Some own 7/11s, some own Shells, and some own Chevron. Anyone who owns a three-letter or three-number ENS domain can lease out subdomains e.g. “sub.123.eth” When people register ENS domains you see three addresses at the top, the registrant (owner), controller (daily operations manager), and the resolver (translates wallet addresses into words and vice-versa). The resolver is basically the one who controls whether your transaction can be translated or not.
Now imagine using a resolver that can also stabilize the gas fees? Right now the safest bet is to use the Public Resolver that the ENS team offered, but once the demand for mainstream Ethereum use comes about, then there will be a massive need to stabilize gas fees. Now imagine having a collection of 46,656 three-character alpha-numeric ENS domains (only maximum possible) and leasing out subdomains in them and then the utility you offer is a fixed and stable gas fee that facilitates the transaction. This is where private resolvers will come in (gas stations). Unlike actual petrol gas stations, the private resolvers of ENS will be forced to stick to a fixed rate, FOR LIFE. For example, they could charge 0.02% per transaction on the basis you send a minimum of 1x10^-14 ETH, which would mean the fee would be 2x10^-18 ETH. Ethereum can be divided 18 times. The 0.02% comes from the fact that the private resolver gets 0.01% and the owner of the 3-character alpha-numeric gets the other 0.01%.
This can only work if there are multiple private resolver competitors who allow the owners of 3-character alpha-numerics to use each resolver simultaneously, because if there is only one then they are just like the public resolver. Having a Mainnet for Ethereum is practical, but expensive since everyone uses it causing high gas fees and failed transactions. With private resolvers, the only ones who can access the fast and cheap network are the ones who have bought subdomains that have been contracted to private resolver networks.
What a private resolver can do is negotiate with the Mainnet and be like “yes we charge very little, but we still have more ETH than you can dream of, so you will have no choice but to approve our transactions.” This can only be possible if people use subdomains within 3-character alpha-numeric ENS domains.
Using a domain with a private resolver that offers fixed rates and guaranteed transactions will be huge for high-demand mints going forward. In late April of 2022, Yuga Labs launched the Otherside NFT which strangled the Ethereum network on a level never seen before. People lost lots of money due to failed transactions on the network during the highly anticipated mint. For high-demand mints, in the future, they will need to contract with private resolvers who lease their resolver addresses to owners of 3-character alpha-numeric ENS domain and be like hey “if you have a subdomain with this resolver on the 123.eth domain then you will be able to mint the NFT.” This will reduce the stress on the Mainnet and allow those who are not participating in the mint to use the network without the consequences of someone else’s demand.
Soul Bound Tokens
In the world today you have problems with fake degrees, fake passports, and fake identities. In the future, we will have Soul Bound Tokens (SBT). SBTs are NFTs that cannot be transferred, sold, and/or altered under any circumstance. If you go to CU Boulder then their ENS name will be “CUBoulder.eth,” and if you get a degree from there let’s say in the business department they will hand out an SBT under the subdomain “business.cuboulder.eth” and then add your name into the subdomain and then add the SBT in the subdomain that has details about you. And then they will freeze the metadata of that SBT making sure the metadata always leads back to them and you. Paper documents will be a thing of the past.
SBTs can also be given out as passports. Instead of forging a fake passport, you make an SBT passport whose contents cannot be altered or transferred making sure you are dealing with the real person. An example is “USA.eth” Has the subdomains of the years' people are born and within each subdomain gets added and SBT that is linked to the person, DNA sequence, time, and place of birth of said individuals. SBTs will make individualism a less expensive process.
Validating Ownership Of Sellable/Transferrable Assets
You own a home and someone forges documents to sell your own home without your knowledge and the problem only gets resolved once the forgery has been proven; how do you even prevent that from happening in the first place? Like this; You own a home, and the company you bought it from has the ENS domain “property.eth” In the subdomain of “property.eth” is your name “john.property.eth.”
This subdomain contains the NFT that validates your ownership, so if a scammer wants to borrow against that house, then he will need to provide ownership of the NFT that is linked to the owner's SBT passport. The NFT can be altered, but ownership cannot be changed unless John validates to remove his ownership from the NFT by signing the smart contract. But even then there will be barriers in place, where if John gets scammed into signing away his NFT, the company he bought it from (property.eth) will have a right-of-first-refusal in the smart contract and then will explain to John how he got scammed and why the first-refusal clause in the smart contract is there in the first place.
Even if the scammer screenshots the JPEG and tries to delete the metadata that shows his forgery the lenders, buyers, and sellers will have a way of knowing who the NFT actually belongs to before any money is borrowed, sold, or lent. Right now good talkers know how to weasel past the system and get money on assets that don’t belong to them, but in the near future, they will need to prove conclusively that the asset belongs to them. There will be transaction validators that can scan the blockchain to see if the NFT is real or just a screenshot, and then notify the property manager and homeowner.
In conclusion, we are only in the beginning stages of web 3. Ethereum will be the undisputed mainstream operating system of web 3. Without ENS the average person will not be able to understand how web 3 will work, just like how they did not understand the internet before the DNS standard came out. Once ENS becomes mainstream people will begin understanding the use cases of NFTs and how they validate authenticity, identity, and ownership. Without ENS, NFTs and many of these web 3 projects will seem useless as history has shown that once people can attach a readable name to things then only will they begin to understand and embrace them.
The solution to solving the mystery of web 3 will be ENS plain and simple. Ask yourself how simple and safe web 3 would be if you had readable addresses to direct yourself to? Making people feel safe and secure with new technology is always the first step toward mass adoption and ENS will give people that security of knowing where to turn to. People need directions in order to do something securely and ENS is the most simplified way to navigate new users on web 3.