Welcome to the seventh episode of season 3 of YAP Cast. In this instalment, Samantha Yap sits down with the mind behind Ethereum Name Service (ENS), Nick Johnson. ENS aims to enhance user-friendliness in Ethereum addresses by enabling the registration of human-readable names like nick.eth.
Join us as Nick shares his insights into the exciting prospects of digital identities and how ENS has the potential to revolutionise our interactions with money.
Programmable Money?
Nick expresses his fascination with consensus systems and the decentralised nature of cryptocurrencies like Bitcoin and Ethereum. He highlights the programmability of Ethereum as a key factor that attracted him to the world of crypto. Nick states that he perceives money as a means of tracking debts and accessing resources. He also mentions the blurred line between money and collectables in today’s world.
An Introduction to Ethereum Name Service (ENS)
ENS is a self-sovereign naming system for Web3 and the broader internet. It allows users to register names that represent individuals, companies, or smart contracts, and resolve them to specific identifiers like Ethereum addresses or decentralised networks such as IPFS. Nick emphasises the importance of decentralised and sovereign identities, highlighting the need for everyone to have access to basic internet infrastructure like naming. He shares his inspiration for creating ENS, driven by the absence of a native naming solution in Ethereum. The practical applications of ENS include facilitating easier money transfers and various creative use cases such as hosting content and participating in governance systems.
Significance of ENS
Nick highlights the importance of being the ability to find and connect with people in any system and uses the example of PayPal’s popularity for online payments due to its user-friendly email address system compared to traditional bank transfers. The value of identity is emphasised as well as the desire to build a system where people can have personal profiles independent of centralised social networks.
Also, ENS simplifies transactions in the decentralised finance (DeFi) industry, where users send significant amounts of money on the Ethereum chain. As for the adoption of ENS in DeFi and Web3, Nick expresses his satisfaction, noting that it has become an expectation for apps to support ENS for entering addresses and resolving profiles.
How does it work?
He illustrates that ENS allows users to register an .eth name, such as nick.eth, and associate it with their Ethereum address. This name can be shared with others for sending funds, and it works with Ether and all tokens.
Nick emphasises that ENS improves user experience, reduces the chances of errors, and provides a more memorable and user-friendly way to interact with crypto transactions.
Beyond Wallet Names
Nick explains that from the beginning, ENS had a broader vision in mind, including decentralised content hosting using technologies like Swarm and IPFS. They intentionally designed ENS to be extensible, allowing users to add their own applications without requiring permission or protocol changes. Nick mentions that while they anticipated certain use cases, such as hosting websites, there have been unexpected applications like Umbra, an anonymous sending app that integrates ENS. This highlights the power of permissionless innovation within the ENS ecosystem.
Transparency Vs. Privacy
Transparency in blockchains can have both benefits and drawbacks depending on the application. While it allows for auditing and accountability, it also poses challenges in terms of financial privacy. Nick also highlights the issue of financial privacy being viewed negatively by regulators and mentions the importance of implementing privacy solutions on top of transparent base-layer systems like Ethereum, rather than trying to build privacy directly into the blockchain.
Sovereign Identities and ENS A sovereign identity gives individuals control where no central authority can randomly revoke or remove it. He contrasts this with centralised platforms like Twitter, where a ban can completely lose one’s online identity. Therefore, ENS names play a role in supporting sovereign identities by providing individuals with control over their identity and data.
By linking various attributes such as avatar image, nickname, email address, and social media handles to an ENS name, individuals can demonstrate their identity and use it across different platforms, independent of any single company’s systems. This empowers individuals to safeguard their data, maintain privacy, and have a more sovereign digital identity.
Control and Custody
With an ENS name, anyone can point it to any account, so ENS itself doesn’t affect the control or custody of funds. However, in the wider context of crypto, if you have money in your crypto wallet, you, as the signer, are the only one who can spend it or authorise others to do so. No external system can alter the balance without your permission.
In contrast, banks can have control over your funds and may have the ability to take them away. Holding your own crypto wallet provides greater control and custody of your assets.
Driving Adoption with ENS
Nick’s vision for the future is filled with hope and excitement. Despite being aware of the usability hurdles in Web3 applications, he is determined to surpass the ease of use provided by Web2 applications. He envisions a world where signing up for an ENS name is even easier than registering a traditional DNS name, like www.amazon.com, revolutionising the way we create and manage our online identities.
Moreover, the connection between ENS names and digital or sovereign identities holds tremendous potential for financial inclusion and accessibility. Nick is passionate about reducing costs and making online identities accessible to everyone, ensuring that it’s not just a privilege for those who can afford it.
Whatever the outcome, ENS offers a possible future, where individuals have full control over their identities and can participate in the decentralised digital landscape with confidence and ease.
Find out more about ENS here
Follow Nick Johnson on Twitter here