When making transactions in any cryptocurrencies, including Bitcoin and Ethereum, users are usually forced to operate with hex-addresses — long and rather strange strings of letters and numbers. They are almost impossible to remember for humans, and interacting with them usually comes down to copying the wallet address, and then pasting it into the desired field. In general, such addresses are quite inconvenient for any casual users.
Therefore, there exists the Ethereum Name Service (ENS), a non-profit naming framework for blockchains. It is open source, not for profit and community-driven, with aims to increase wide-spread adoption of crypto technologies. ENS solves problems with names of wallet addresses and reduces the fear users have about transactions with cryptocurrency. Because, as we all know, people fear what they don’t understand.
Meanwhile, web users are already accustomed to DNS — Domain Name System. It replaces digital IP addresses that cannot be easily remembered with normal web addresses expressed in words (like Amazon, Google, and so on). In the same way that ENS allows you to rename crypto wallets. Imagine that you no longer have to copy and paste an address, hoping that the clipboard saved the right field. Instead, you can use shorter and more memorable names registered through ENS. For example, Vitalik Buterin’s wallet name is Vitalik.eth. Simple and convenient. Registering a wallet name in ENS takes less than a minute, is very cheap (by orders of magnitude cheaper than DNS), and offers anyone extra security and plain convenience when interacting with cryptocurrency platforms, dApps and crypto users in general.
How Does The ENS Work?
Each wallet address on the Ethereum network functions as its own account ID, and any of them can be renamed. Every name exists in the form of an NFT token, so it is unique and belongs only to its owner. An NFT with a name in a certain wallet proves its name and can be easily sold or bought, just like any other token. This could even end up being profitable for the owner (more on that later).
The native address for ENS records ends with “.eth” (for example, we have a token with a wallet name of polkapadnetwork.eth). It’s also possible to register a name based on the domain (web-site) name you own — with such suffixes as “.com”, “.org”, “.app”, “.io” and so on. ENS supports many DNS suffixes, allowing you to name your wallet exactly the way it is needed for your crypto project. In total, more than 1.7 million unique wallet names have already been registered with the service.
What’s impressive is that name holders can even create subdomains, just like with standard DNS or email. This way users can show their belonging to a particular project. For example, you can create a name like nick.polkapad.eth or, say, jeffbezos.amazon.com. This way you can also show use cases for this wallet — say, by naming it account.ourservice.eth or support.ourservice.eth.
With ENS, you can even transfer control of an account to other users while maintaining verified ownership of it. Another function is that you can leave text entries next to your wallet that can uniquely identify its owner — for example, you can add your twitter profile address, your email, GitHub, or the URL of your website. You can read more about how this can be done here.
As a result, users can store their contact information in their wallet. Which could be very useful for anybody who wants to contact them. Alternatively, you can just use this to brag about how much cryptocurrency your wallet holds.
You can even add keywords to your wallet — for example, to show which kind of project this wallet belongs to. Through this feature users can also find people or products they are interested in. This makes blockchain highly searchable and more open in general.
How to Register a Wallet Name in ENS, and Why You Should Do It
Any user can lease a name for their wallet in under a minute. This costs about ~5 USD or 0.005 ETH for a yearly lease of a name of 5 letters or longer. The price of rare three- and four-letter names can be several times higher. Some names go for crazy amounts, such as 420 ETH (almost $600k) for “paradigm.eth”. This payment does not go to any company, cryptocurrency gained is held in a community-controlled public account and used to support and improve the ENS project and surrounding ecosystem.
In general, registering a name with ENS consists of only four steps:
- Registration with the hash number of your wallet on the ENS website
- Conducting two transactions from this wallet — to reserve a name and to pay for it
- Waiting about a minute to make sure the name is available
- Clicking “Register” and after the 2nd transaction is confirmed. Now the wallet starts functioning under a new name.
If you still have questions, here is a video where an ENS expert demonstrates the step-by-step process of acquiring a name in detail:
Once you own the name, it can be used instead of a hash address with any ETH wallet to send or receive crypto. It also works in any decentralized application or browser that supports the ENS standard. No need to enter hash-based strings of letters and numbers. There are now thousands of dApps and platforms supporting ENS, including MetaMask, Coinbase Wallet, Blockchain, OpenSea, Zippie, and Uniswap.
There are several advantages of using a lettered name for a wallet:
- Convenient and clear display of the name. The user can enable this option in the ENS settings, and his name will be shown instead of the Ethereum address in DeFi and CeFi applications, including Uniswap. This name will also be visible in wallet apps, including MetaMask and DeFiSaver.
- No costly mistakes. To the human eye, all cryptographic addresses are indistinguishable from each other. But the wallet with your chosen name will no longer be confused with anything, it will be one of a kind. This avoids the common and costly mistake of sending currency to the wrong wallet.
- Convenient search for people and wallets. Anyone can go on Etherscan and search for the wallet name and look at the value of this account and any incoming or outgoing transactions. This provides incredible transparency for a project or a person that have nothing to hide. It is also a good way to show that this person/project is really trustworthy.
- Your name can be profitable. Names are just tokens, therefore you can buy and sell them. Some names are always in demand. You can auction them off or buy them on popular NFT trading platforms such as Rarible or OpenSea. Moreover, they are even beginning to be used as collateral on some DeFi platforms. Owning a valuable name can end up being profitable for the user.
At the same time, the fact that they own the name does not restrict the user in any way. If the owner decides to change their Ethereum wallet address but wants to keep the lettered name they paid for, they can easily do so.
ENS Is an Important Infrastructure for Web3
Recognizable names that replace long and hard to understand wallet addresses makes the transaction process much more simple and straight-forward. Interacting with blockchain projects becomes much easier and more enjoyable for casual users. As more and more crypto services start to support ENS and similar initiatives, Web3, this almost sci-fi concept, is gradually becoming down-to-earth and truly user-friendly. This is an absolutely necessary condition for mass adoption of crypto technology.
ENS is not just one of the ordinary projects on the Ethereum protocol; it is a broader Web3 service useful to all blockchain users, especially to the owners and employees of various crypto companies. As Vitalk Buterin said in one interview, “ENS can basically be thought of as a decentralized phone book. It is probably the most important non-financial Ethereum service”.