Namecoin — Update I

19.04.2019

TL;DR. Ecology:3 (3). Technology:6 (6). Decentralization:5 (5). Valuation:8 (8). Rating:6/10 (6/10)

Six months have passed since the last BD Ratings review of the first altcoin, Namecoin. When looking at how the price has changed since that time, we see that it actually went up relative to BTC, and so the prior rating is 'in the money'.

2018-10-19: USD 0.588541, Satoshis 9 136.

2019-04-19: USD 1.01, Satoshis 19 215.

October 2018 ended with updates on the Electrum-NMC wallet GUI  -  a push for a better Namecoin user experience. The changes focused on making it simple to update existing names, but also registering new ones. Later that month, Namecoin was represented on Decentralized Web Summit in San Francisco. Lead developer Jeremy Rand spoke at Internet Governance Forum as well, and would later attend 35C3 in Leipzig together with Jonas Ostman.

On 21st of December, 2018, Electrum-NMC 3.2.4b1 was released. Some of the new features were general code quality improvements, Archos hardware wallet support, name support as well as a new checkpoint. 2019 started off with further Electrum-NMC optimizations in the form of AuxPoW truncation. AuxPoW (Auxiliary Proof of Work, or 'merge mining') is the largest part of a Namecoin block header. By omitting parts of the AuxPoW data from Namecoin block headers, Electrum-NMC bandwidth usage could be reduced by around 90%. Electrum-NMC 3.3.3.1 was released on February 3rd, 2019, and included, among other things, fixes to certain GUI components.

Ecology

The activity on the Namecoin subreddit is now very low, with less than a post per day on average. Most posts are made by the Namecoin lead developer biolizard89. When inspecting the on-chain activity, it is evident that it is low as well, with around 100 or so transactions per day.

With that said, the GUI improvements are a welcome addition these last months. Facilitating simpler name registry operations from a lean and secure wallet definitely takes the project a step in the right direction. As soon as this is made extremely easy for NMC owners, work on simpler browsing of .bit webpages is obviously the next logical step. Some completed milestones are mentioned here.

Grade: 3

Reasons: Low network and community activity. Work on ecosystem infrastructure is progressing.

Technology

Namecoin GitHub activity remains fairly high, with continuous merging of Bitcoin Core code. The quality of Namecoin developers was again partly confirmed when Jeremy Rand managed to get some submitted patches merged by the Tor Project. He also saw more code merged to the ElectrumX master branch.

More evidence of a strong security focus is seen when biolizard89 even dissuades the Namecoin community from attempting to get Ledger integration. His argument was that parts of the Ledger firmware are closed source and so shouldn't be fully trusted. The general theme seen in most of the team's posts do concern technical components of the project.

Grade: 6

Reasons: Strong focus on security. Lean code base. Relatively small team of developers.

Decentralization

BD Ratings could not find any new influencing factors on Namecoin decentralization during these last six months. Since the blockchain is still merged mined with Bitcoin, it should more or less inherit hashrate security and decentralization properties from that chain. BD Ratings will research this property further. Total hashrate does not differ that much from BTC.

The Namecoin team is still relatively small.

Grade: 5

Reasons: No considerable changes.

Valuation

At time of writing, all circulating NMC are worth over USD 15M, which is a considerable increase since the initial ratings article was published. The price has risen even more relative to BTC, but still only lands the blockchain at #243 on coinmarketcap.com which is far to low. It is still obvious that the Namecoin project has tangible, real-world utility in the form of providing better censorship resistance on the internet. As the main developers are still working on the project, and as the ecosystem infrastructure is continuously expanding, the fundamentals are overall still very good.

Grade: 8

Reasons: Good fundamentals. Price increase since last rating.