Memo to ICANN: Registries Need To Price In Bitcoin

ICANN’s job as an oversight body to the global naming system is (supposedly) to weigh the needs of all global stakeholders and to try to address regional, national and linguistic requirements. In practice, not much of this happens, so we’re left with an internet where most domain name registrants are subject to US law and the whims (including bouts of cluelessness) of US policy makers.

One of the other ways in which domain policy and the competitive landscape is heavily skewed in favour of US based entities stems from the fact that most registries price their base wholesale costs in US dollars. This heavily favours US business participants in a scenario where the US dollar is weakening. Given the monetary policies of the last few years (and despite the current counter-trend rise in the USD), the USD is headed lower over the years to come and in doing so, non-US companies will be perpetually squeezed to keep pace with the downdraft while their US counterparts will simply be pricing in their native currencies and largely immune to these currency pressures.

IF ICANN were truly concerned with global governance and stewardship and IF they wanted to implement a system where international competition took place without home team advantage for the Americans (in other words, IF they wanted “a level playing field”), then they would be able to do this by having the registry operators start charging their registrar customers in a non-national currency, and by this I mean something like Bitcoin.

If this were the case than all national currencies would find their own exchange rate against Bitcoin, and if US policy continues to drive the USD lower, the US registrars would find themselves having to also face  exchange rate considerations that all the non-US international players face now. Currently all international players see their competitiveness impaired by the ongoing currency debasement inside the US – if US based registrars had to remit their Costs-Of-Goods Sold in Bitcoin, they would have their cost basis increase as their policy makers debased the currency.

ICANN could even sponsor the creation of a crypto-currency specifically for this purpose – RarCoin anyone? Given that we are in the early innings of a global currency war and combine that with who knows how many new TLDs are coming online at some point, “RarCoin” could indeed fit the bill to balance out the international interplay of competitive devaluations and numerous new registry operators.

Of course, none of this will ever happen because only exceptional circumstances will see somebody giving up an advantage even if it’s an unfair one. To do so requires extraordinary long term vision which is conspicuous in its absence from today’s zeitgiest. That it won’t happen is thus understandable, but what happens next is then predictable: market forces tend to assert themselves and “extra-systemic” solutions spring into existence.

What do I mean by extra-systemic? I mean that when a system is “rigged” and there is no officially sanctioned recourse to address imbalances, market participants are going to create methodologies to end-run a rigged system. This can take a long time, but one of the most recent examples of this is the emergence of crypto-currencies, including Bitcoin itself.

That “RarCoin” will never happen is a given, but the ramifications of something like it not happening just adds to the possibility that there may eventually be a series of net/splits which will fragment the root DNS system.

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