Dot-BIT and Alternative Domain Name Systems...
There is only one scarce commodity on the Internet - domain names. The one-and-only official Domain Name (DNS) System is run by an organization called ICANN and they are responsible for maintaining the Internet's basic functionality. After all, imagine the chaos that would ensue if there were a thousand different websites that all used the domain name "www.google.com". ICANN makes sure that doesn't happen.
The ways in which ICANN makes decisions about the DNS system are very political and creates winners and losers. But the losers never had any recourse. There is only one DNS system run by ICANN and the buck stops with them.
But does it have to be that way? Can new top-level domains (TLDs) be created outside of ICANN's control?
The prevailing wisdom for years has been that opening up domain name adminstration to mutiple organizations would lead to that aforementioned chaos. However, there is a growing hacktivist trend to circumvent the existing DNS system.
On a technical level, this is accomplished through the use of proxies. The most well-known example is Tor, a software suite that creates a virtual anonymizing network, also called a "DarkNet". As this Ars Technica article explains, there is now another...
Called Dot-BIT, the effort currently uses proxies, cryptography, and a small collection of DNS servers to create a section of the Internet's domain address space where domains can be provisioned, moved, and traded anonymously.
So far, over 4,000 domains have been registered within Dot-BIT's .bit virtual top level domain (TLD). Those domains are visible only to people who use a proxy service that draws address information from the project's distributed database, or to those using one of the project's two public DNS servers...
Dot-BIT is derived from a peer-to-peer network technology called Namecoin, derived from the Bitcoin digital currency technology. Just as with Bitcoin, the system is driven by cryptographic tokens, called namecoins. To buy an address in that space, you either have to "mine" namecoins by providing compute time (running client software that uses the computer's CPU or graphics processing unit) to handle the processing of transactions within the network, or buy them through an exchange with cash or Bitcoins. All of those approaches essentially provide support to the Namecoin distributed name system's infrastructure.
You can also get an initial payout of free namecoins from a "faucet" site designed to help bootstrap the network. The cost of entry is pretty low: currently, registering a new domain costs about 1.6 namecoins, which can be had for about five cents.
Your registration isn't associated with your name, address, and phone number—instead, it's linked to your cryptographic identity, preserving anonymity. Once you've registered a domain, you can assign it by sending out a JSON-formatted update request, mapping the domain to a DNS or providing IP addresses and host names to be distributed through Dot-BIT's proxies and public DNS servers. That information is then spread across all of the network's peer systems.
Personally, I don't see Dot-BIT as being a meaningful tool for evading censorship. The existing DNS system remains, what Marcus Franda has called, a "single controlling point" on the Internet, and as such, websites with Dot-BIT domains can still be shut down from the primary root servers.
But what's really interesting is the mere possibility of an alternative domain name system. It seems so absurd, and such an anomaly, that the democratizing force of the global Internet is still controlled, essentially, by one organization with monopoly power and no public oversight. Eventually, as hacktivist groups keep trying to develop alternative domain name systems, ICANN will inevitably be faced with a choice - to reform their processes or be circumvented.