Starting from May, with some three-digit and brand name ENS sold at high prices, this project, which was launched in 2017, came into the limelight. At the same time, a large number of other DID projects have been launched to compete in the DID space. A good DID project is .bit, which was previously called DAS. This article explains the principle of .bit, and its advantages, and compares it with ENS to evaluate the potential and value of this project.

1. What is DID?

DID (Decentralized Identifier), is an open-standards-based identity framework that uses digital identifiers and verifiable credentials that are self-owned, independent, and enable trusted data exchange. It aims to protect the privacy and secure online interactions using blockchains, distributed ledger technology, and private/public key cryptography. The format of the DID is similar to that of an Internet domain name, so it is sometimes called a blockchain domain name.

What exactly is the use of .bit and .eth based on blockchain technology? What is the difference between them and Internet domains like .com? What is the reason behind the hype? To answer these questions, one needs to understand what .com is for.

For the Internet, it is to determine the server through the IP address to log in to different websites, for example, Apple’s IP address is 17.253.144.10, and you can remember this string of numbers should you wish to access Apple’s official website. Such addresses tend to be long and messy, making them challenging to remember, which is why there is a .com resolution service. Enter apple.com into the browser, and the backend resolves to an IP address of 17.253.144.10, identifying the server and website. Therefore, it would be easier and faster for users to enter apple.com to reach Apple’s official website.

And DID services (blockchain domain name) like .eth and .bit, resolve out only an IP address but a string of hash (blockchain address). For example, vitalik.eth will resolve to:0xd8dA6BF26964aF9D7eEd9e03E53415D37aA96045

.com resolves to an IP address to locate a website, but what does vitalik.eth do when it resolves to an ETH address? In the blockchain world, an ETH address (public key) serves as both an identity credential and a payment address.

This serves several purposes.

First, others can transfer funds directly to the address of vitalik.eth, whether it be Bitcoin, Ethereum, or other cryptocurrencies (if the wallet address is already bound), whether it is 1 block or 100 million, and the funds can then be received by the address holder. DIDs serve as receiving accounts in the blockchain era.

Second, such DIDs can be used as their own ID, similar to Twitter or Telegram, and can be linked to a user’s account. Content creators, serve as the perfect IP that is completely under their control with no risk of being blocked.

Third, this DID can also become the domain name system for a new generation of decentralized websites. The traditional .com domain name system based on the HTTP protocol has major drawbacks, such as centralized storage resulting in easy loss of information (page 404), and is easily blocked by firewalls and susceptible to blacklisting and other behaviors. But the IPFS technology combined with the DID can solve the problem, all the content will be IPFS form of decentralized storage, multi-node preservation, and content encryption — the way to search the site will no longer be through the IP address, but a string of hashes, which gives the DID the opportunity to resolve it.

In the future when the IPFS protocol replaces the HTTP protocol, a new generation of domain name systems such as .bit or .eth will replace .com and become the norm for network domain names.

2. About .bit

2.1 Introduction

.bit is a blockchain-based, open source, decentralized cross-chain account system that provides a worldwide unique naming system with a .bit suffix that can be used in different scenarios, such as cryptocurrency transfer, domain name resolution, identity authentication, etc.

.bit is the first decentralized account system with broad compatibility, allowing users to register and manage their .bit accounts with any public chain address or even email.

The core elements of a .bit account contain the owner/manager, and the record (i.e. the data associated with). Unlike ENS, the owner/manager of .bit can be any public chain private key or even email; unlike DNS, .bit supports any type of record. (Source: docs.did.id)

2.2 Account Structure

2.3 Components

• Core Protocol

  This refers to a series of Lock Scripts and Type Scripts deployed on Nervos CKB. They define .bit accounts and the related operational standards for .bit accounts and are the concrete implementations of the .bit core protocols.

• Keeper

  Keeper is a set of off-chain programs that can be run by anyone without permission and is responsible for triggering a series of transactions that conform to the core protocol. Running a Keeper earns .bit system rewards.

• Resolution Service

  It resolves the global state of .bit based on the transactions on Nervos CKB and provides account resolution service to the public in the form of an interface.

• Client SDK

  Includes SDKs in various languages to simplify the integration of mobile wallets, web wallets, server wallets, and other .bit-related applications.

• Dapp UI

  Users ultimately use various features of .bit through a variety of application interfaces. These applications can be used directly in the browser or can be integrated into popular wallet software.

2.4 What’s the “cross-chain” in .bit?

This cross-chain differs from others. Traditional cross-chain usually means staking assets on one chain and getting related assets in another chain. There is no staking asset on any chains in this case as .bit uses Nervos CKB, which is compatible with any public chain’s account (address) system.

Users can install the BTC signature algorithm on Nervos CKB and make sure that the node must invoke the BTC signature algorithm to perform the checksum when packaging the transaction(which is generally a transfer of fungible or non-fungible tokens). After the verification is passed, the transaction is uploaded on the chain and the transfer of the assets is completed, which means users control their Nervos CKB assets with their BTC private keys.

For the same reason, any public chain’s signature algorithms can be installed on Nervos CKB and any public chain address is able to hold assets issued on Nervos CKB.

Users can also cross chains using the Convert Bridge. Users can burn the old one on one chain, and mint it on another chain.

3. Comparing .bit and ENS

It is clear that ENS is the most well-known project in the DID circuit and the explosion of this circuit has also been adue to ENS. We shall now compare the advantages and disadvantages of .bit and ENS from several aspects.

●Number of users

As of today, .bit has 118,000 registered accounts and 42,000 users, while ENS has 1.67 million registered accounts and 482,000 users, giving ENS a strong advantage in terms of the number of users. ENS has a strong advantage in terms of the number of users, mainly because of its first-mover nature and the hype surrounding the issuance of token airdrops and digital domains for BAYC holders. But while .bit is just about a year old, ENS has been around for four years. It is also impressive that .bit has reached its current number of users.

● Cross-chain capability

Since ENS is issued on the Ethereum chain, registration, management, and transaction can only be done on the Ethereum chain. The suffix of ENS is also .eth, which is a project belonging to the Ethereum ecology only. .bit is issued on Nervos CKB, which can provide account resolution service to the public in the form of an interface. .bit can also utilize Convert Bridge, which enables cross-chain. Therefore, .bit is not dependent on any single ecosystem and can interface with every public chain and can be converted to other public chains. This is where .bit excels.

●Residual name availability

Although the number of ENS users is relatively high, its potential to be mined is not high. Besides the need to spend on expensive gas fees, many domain names with investment value have long been grabbed by others, while “.bit” has only released 60% of 4–6 digit accounts so far, and the remaining 40% will be released sometime in the future, and everyone can make reservations for sought-after names, and the allocation process is relatively fair. Secondly, .bit with cross-chain property has an advantage over ENS in the future blockchain industry where multiple chains will co-exist.

●Security of names

As .bit is a common account layer for the whole Web3.0, and accounts are ultimately for human use, it is a necessary design criterion to improve the identifiability of .bit accounts and reduce the occurrence of fraud. To this end, .bit introduces a key design: there are strict restrictions on the characters that can be used to register a .bit account.

Firstly, only lowercase letters, numbers, and a small number of emojis are allowed to be registered as .bit accounts. Secondly, characters from certain languages cannot be mixed with characters from other languages. Fraud is more likely to occur in the Web 3.0 world, and Web 3.0 fraud cases are more immediate and more damaging than the phishing practices of the Web 2.0 world. In the Web 2.0 world, a user who visits the wrong website needs to go through some steps before information or property is stolen. But in the Web 3.0 world, if a user cannot tell the difference between satоshi.bit and satoshi.bit, he will transfer funds to the wrong person and access the wrong contract. Can the average user see the difference between satоshi.bit and satoshi.bit with the naked eye? Likely not. But in fact, the о in the former is a Russian character, while the o in the latter is an English character, and the two are completely different account names. Without any restrictions, it would be simply too easy for someone with ulterior motives to commit fraud. However, under the .bit system, the former will not be deemed a legitimate .bit account and will not be registered successfully.

In ENS, the rules and security of the name registration process are not so ideal. Anyone can register a domain name that looks the same as others that already exist by adding zero-width characters (abbreviated as ZWJ, which can be interpreted as spaces with no width). Take vitalik.eth, for example, one can add a zero-width hyphen between the English words vitalik, such as vitali%E2%80%8D%E2%80%8Dk, or vital%E2%80%8D%E2%80%8Dik, and ENS will show that the domain name is available for registration. The two domain names will look exactly the same, and no visible difference can be seen. This vulnerability is extremely easy to be exploited by scammers. If a scammer sends you a domain name with a zero-width hyphen at vitalik.eth, you will be led to believe that this is Vitalik’s account, and if a copy/paste function is performed while doing a funds transfer, the funds will go to the scammer. Such a problem was discovered by the ENS team early on, but there is no way to change the rules. ENS is a decentralized product and it would be impossible to delete any of the registered domains.

Therefore, this problem can only be solved by detection and warning on ENS.

4. Summary

.bit, a project that just raised US$13 million in Series A funding, has many advantages:

• .bit is feature-rich.

• .bit can have many users even in the early stage.

• The excellent “cross-chain mechanism” makes .bit not dependent on a single public chain, which is applicable to a wide range of applications.

• There are still many valuable DID names in .bit that have not yet been registered.

• .bit’s name design rules are more secure and reasonable.

At the same time, .bit, as a slightly later project in the DID track, the project teams need to consider how to operate the project to develop rapidly and shorten the gap in scale with ENS, given that ENS has the advantage of the number of users at present.

Written by: Lucio Lyu

Twitter: @imLucio_eth