One of those in the domain industry whose opinion I greatly respect, Alan Dunn, has made a lot of inroads in equating the value of domain names to commodities at least when it come to those “Chinese Domains”; ultra short domains with single, double and triple characters .
According to many in the domain space, “Chinese Domains” equate their value to a commodities like Gold, Platinum, Silver, Oil, & Copper.
But Comparisons to domain names, to other commodities carry some good, but a lot of bad.
When you look at domain names, which if they were traded on just on their intrinsic value a few years ago, are now being traded on a speculative value based on what domain investor are willing to sell a domain to another domain investor.
So what is 6955.com inherently worth? (it’s a domain we used to own)
The issue as I see it is the traditional “Chinese domains”, letters, numbers or a mixture thereof, which are not selling enough to end users.
To have a “value” there must be an underlying value to end users
Just my opinion.
Otherwise domains are being traded like baseball cards, like green stamps for those as old as I am or other “things” that a value if placed on for the sake of transferring money between buyers and sellers.
These “Chinese” domains are being traded between domain investors creating a market more like a Bitcoins and less like Domains.
So what is a Bitcoin worth and why is it worth it?
What says Bitcoin is worth a certain amount on any given day?
What is the underlying value of a Bitcoin?
If you have love for the group War (good god Yeah what is it worth for , absolutely nothing, (say it again)
The right answer is that Bitcoin’s value on any given day is the cost of production Vs. the perceived value.
I got one Bitcoin for free a few years ago and saw the value go from $300 to $1250 in days.
Perceived value not supported by any reality
If you look at some of SalesForce.com domain acquisitions:
Data.com, Social.com, Database.com, Force.com, Work.com, Desk.com, Community
All great domains.
Each of those domain are worth 7 figures, each arguable, but only to a company like Salesforce.
If we are just moving money between domainers, be they in the US or in China or otherwise around the world, domain names which are just a series of letters, numbers or combinations thereof, seem to have an artificial value, that can change daily, and not supported by any underlying fundamentals, and are troubling.
We see thousands or tens of thousands of domains registered in new extensions each day.
99% of these domain registrations have nothing to do with the left of the dot vs. the right of the dot, they are just letters and/or numbers or keywords or a combination thereof on the left combined with the right. with those registrants trying to make a return.