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It's interesting that you mention Real Estate, because Vitalik's solution is inspired by the "Land Value Tax" idea in Real Estate, which is a policy widely supp

It's interesting that you mention Real Estate, because Vitalik's solution is inspired by the "Land Value Tax" idea in Real Estate, which is a policy widely supported by economists as the "least bad tax" and which directly attacks rentierism and land speculation, which are the direct cause of inflated land prices and a significant contributor to the ongoing housing crisis (as well as inflation overall, as rent inflation is a major contributor). Fun fact: the problem with domain names has happened over and over again in a related field -- online games. In fact, wherever you see a "land like asset" arise (defined as an asset that is scarce in supply, necessary for production, and which obtains value from its location), you will see something analogous to land speculation. Digital "land value taxes" have been attempted before, and the best evidence available suggests that they are very effective: https://progressandpoverty.substack.com/p/land-value-tax-in-online-games-and https://progressandpoverty.substack.com/p/land-value-tax-in-... Right now in domains some services have a very, very crude approximation of a "land value tax" where they charge a fixed higher fee for "premium" domains (common words). This has a slight effect on dampening speculation, but the root problem is that the fee is not directly proportional to the desirability of the domain (ie, the location). The solution is not a blanket high fee across everything -- it's perfectly fine for the holding cost fopr things that aren't currently in high demand to be eeffectively zero -- it's to have a holding fee that rises and falls in proportion to demand for the non-produced, necessary asset.

kirillzubovsky 3y ago
yup. precisely the topic of an hour long discussion I had with a friend yesterday. here are top 2 problems I see with this tax in domaining: 1- All of the TLDs are owned by a handful of companies, and it's not in their interest to create a more competitive model. They don't really care who owns a domain, as long as someone's paying for it. In fact, they like squatters and encourage it. You should see how many domains are auto-registered by bots. I'll write about that more in the future, but for every TLD that claims "millions" of registered domains, a large portion of those are just unused junk. The registrar though is getting paid. 2- Land tax is not in the business interest of a business. As a domain becomes one of the key pillars of a business, I wouldn't want anyone to have the ability to take it from me, which is how it works (from my understanding) under the value tax. However expensive, it is cheaper to pay large sum up-front, and know you have the domain forever. Land tax is one of those things that are good in theory, but in practice will be very hard to implement.

kirillzubovsky 3y ago

yup. precisely the topic of an hour long discussion I had with a friend yesterday. here are top 2 problems I see with this tax in domaining: 1- All of the TLDs are owned by a handful of companies, and it's not in their interest to create a more competitive model. They don't really care who owns a domain, as long as someone's paying for it. In fact, they like squatters and encourage it. You should see how many domains are auto-registered by bots. I'll write about that more in the future, but for every TLD that claims "millions" of registered domains, a large portion of those are just unused junk. The registrar though is getting paid. 2- Land tax is not in the business interest of a business. As a domain becomes one of the key pillars of a business, I wouldn't want anyone to have the ability to take it from me, which is how it works (from my understanding) under the value tax. However expensive, it is cheaper to pay large sum up-front, and know you have the domain forever. Land tax is one of those things that are good in theory, but in practice will be very hard to implement.