Despite Losing Rank, Namecoin a Staple of Stability

You name it. Dozens of new coins have come (and gone) over the past few months. Some gaining 300% over

You name it. Dozens of new coins have come (and gone) over the past few months. Some gaining 300% over a few days, others disappearing off the map altogether. Others aim to get us to outer space. You can even make your own coins.

But Namecoin (NMC) is one of the few that have maintained a relatively stable profile since their inception. NMC on Cryptsy traded at around 6.5 mBTC in August, and is trading at around the same level now (6.8 mBTC = $5.66). Its lowest price during the interim was just under 2 mBTC, its closing peak was 11 mBTC (granted, with some temporary intraday hyperbuying to 24 mBTC during the late November crypto-craze, yet without the crypto-crash briefly experienced by others).

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NMC/BTC. Source: cryptocoincharts.info
NMC/BTC. Source: cryptocoincharts.info

This differs from most other altcoins which exhibit a profile of close to zero BTC at the start, a net gain of several thousand percent vs BTC in the end, and wild swings of several hundred percent in between (granted it does bear such a resemblance vs USD, as does BTC).

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What distinguishes Namecoin from all other digital currencies that its primary purpose of creation wasn’t even to serve as a currency, but rather as a decentralized Domain Name System (DNS), analogous to Bitcoin striving to serve as decentralized currency. Domains are registered by paying a small fee of 0.01 NMC (about 6 cents) per domain.

It is therefore more like a commodity than it is a currency, its intrinsic underlying value tied to the value of the domains under “non-governance”. This can partially explain its relative stability, which can change depending on what the future has in store specifically for domain names and the internet in general.

 

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