The Problems With Web 3.0 Domains

The term "Web 3.0" has become one of the most overused phrases in technology. It's often tied to the promise of decentralisation, digital ownership, and a new kind of internet built on the blockchain. A key part of that promise is the rise of blockchain domain names, marketed as a way to escape the so-called limitations of the traditional web. Supporters claim these names offer real ownership, independence, and even resistance to censorship. But when you examine how they actually work, it becomes clear that Web 3.0 domains come with serious flaws that make them unsuitable for most real-world use.

At first glance, the idea sounds empowering:

• You buy a domain that lives on a blockchain instead of through a registrar.
• It's yours to keep permanently.
• There are no annual renewal fees.
• There is no central authority that can take the domain away from you.
• You're free to use your domain as you wish, for what you, want without consequence.

However, the trouble with this narrative is explicitly clear. It oversimplifies a complex system. And sadly for Web 3.0, it's one in which it simply cannot ignore or operate alone.

Let's Start At The Beginning...

So, before we go further into the world of Web 3.0, if you haven't read "What Are Web 3.0 Domains And Do You Really Own Them?," the first-part of my article series on Web 3.0 domains, then now would be a great time to pause and check it out, to bring you up to speed.

Traditional domains like .com, .org, or .co exist within the Domain Name System (DNS), a well-established network that connects billions of devices and servers worldwide.

The single most important thing to know about the blockchain version, is that it operates outside of it, and that means that they don't communicate, and they aren't compatible.

Now, why is this so important? Well, if you own a .crypto or .eth address, it is, in other words, invisible to almost everyone who uses a standard browser or email client, and this incompatibility is a significant problem to say it mildly.

How The Web Is Built

The web runs on DNS, and that system is supported by every major browser, hosting company, and internet service provider.

Blockchain domains use separate naming protocols that browsers can't recognise without extra software, not unless the user installs a plugin or uses a specialist browser, and without either, the web address simply won't load.

The companies facilitating the sale of Web 3.0 domains seem to neglect this little fact in their marketing and sales pitch, but the consequences of this fundamental flaw are such that they simply cannot be ignored, because in short, this isolates Web 3.0 domains from the mainstream internet and limits their visibility to a very small community of crypto enthusiasts.

But the case for Web 3.0 domains weakens further still. You see, even within that community, blockchain domains are still very much a work in progress.

Dictatorship Without Governance

Some browsers like Brave have tried integrating them, but adoption remains tiny compared to the global scale of the DNS. Added to the fact that is no consistent standard for how these names should resolve, and you have chaos. Why? Well, each provider of Web 3.0 domains effectively sets its own rules. If Unstoppable Domains or the Ethereum Name Service changes how their systems work, every site built on top of them is affected.

Think about that for a minute, about the gravity of such a system and the impact it could have upon your business.

Imagine investing in a Web 3.0 domain and using huge amounts of time, energy, and monetary resources to set up a service or channel to sell your product or service, only to discover that the provider of the domain has now suddenly changed the way in which your domain operates or can be accessed. Whatever you built or intended to offer, and the time and money you invested in getting ready for market, doesn't matter now because the platform you built for no longer works the way it once did. So, what do you do? Or rather, what can you do? Start again, or reconsider the actual value of being "revolutionary"?

Whatever your thoughts, the main sales argument of "reclaiming the web from the large corporations" is nothing less than folly, because despite what Web 3.0 providers might want you to believe, the simple fact is that Web 3.0 domains do not represent decentralisation, just dependency under a different name. In fact, it's easier to argue that they actually represent the opposite: a more centralised and even greater system dependency to boot.

Functionality

The next problem is functionality.

A .com domain isn't just a web address, it's the foundation for email, analytics, security certificates, and search visibility.

A blockchain domain supports none of that out of the box:

• You can't use it send or receive email with any popular reader such as Gmail or Outlook.
• You can't secure it with a normal SSL certificate.
• You can't list it on search engines because Google and Bing don't crawl those networks.

For a business or brand, that means you essentially have no online presence beyond an extremely limited and very small circle of users.

The Problem With Permanence

Then of course, we have the main sales argument: "With a Web 3.0 domain, you buy once, and own forever!"

I have to admit, it's a strong marketing phrase and one that targets the grudge that most domain owners, particularly domain investors have, namely, the ever-increasing annual fees responsible for renewals.

That being said, this so called "buy once" mantra ignores the fact that technology and standards evolve, which means for you, as a Web 3.0 domain "owner", the road ahead is far less certain.

The blockchain itself may be immutable, but the systems that interpret those names, including the smart contracts, the interfaces, the hosting layers, and so forth, are most definitely not.

If the company running your service disappears, goes bankrupt, is purchased, or gets swallowed by another company for another purpose, your "forever" domain would in all likelihood become unreachable.

Let's just say that again, but give it a slightly different context.

Imagine buying your dream car. It's everything you ever wanted and everything is wonderful. Actually, it's better than wonderful, it's perfect. That is until one day, the day you wake up and your car is no longer parked in the garage, outside your home, or on your driveway. On closer inspection, it turns out the car you've been driving around in doesn't exist. But how can it be? You're not crazy. You know it's yours and you know because you've taken it out on all those exciting trips so it has to be somewhere, right? Still, the fact remains you can't find it so there can only be one explanation: someone must have stolen it. You report it to the police, but there's no way to file a stolen property report because there's no registration or other way to track the vehicle. That's a problem, but it's ok, because you remember the dealership you bought the car from and they must have a record of it, only the dealership no longer exists, and despite the fact that you might have dozens of photographs of the car with you inside or beside it, sadly, it doesn't prove that it was yours or that it even is a car. The police remain unconvinced and there's little they can do without proof. So, you contact your insurance, surely they have a record, they must have, after all you've been paying premiums on it now for months so you must be entitled to make a claim against the theft? Sadly, your insurance company rejects your claim because there's no evidence that there ever was a car. But there has to be? They insured it, or so you thought, only they couldn't insure your car because there was no policy. None of this makes sense. Then what have you been paying for, you ask, and the insurers don't know and can't tell you, but thank you for your payments nonetheless.

The scenario might seem impossible, perhaps even ludicrous to imagine, but it does so only because there is a duty of obligation, clear system of ownership, and recognised series of authoritative structures in place, that ensures car ownership does not become a nightmare for any prospective owner.

With traditional domains, there's a clear chain of accountability. ICANN regulates registrars, registries manage TLDs, and disputes can be resolved through recognised procedures.

Blockchain domains have none of that structure. If a name is stolen or a key is lost, there's no recovery process and no governing body to appeal to. The domain is simply gone.

Pricing Scarcity

The pricing and "scarcity" of Web 3.0 domains add another layer of confusion.

Some blockchain names are cheap, but the more desirable ones are sold for hundreds or even thousands of dollars. That's not because they're more valuable, or the result of market demand, but because scarcity is being manufactured through marketing.

The companies behind these domains decide what exists, how many are available, and at what cost. It's the same profit model they claim to oppose, just wrapped in the language of decentralisation.

Legalities

Away from pricing and permanence, legal uncertainty is also a growing concern.

Blockchain domains aren't recognised by ICANN or by any other national regulator. That means if a dispute arises over trademarks, ownership, or misuse, there's no legal framework to resolve it.

A business could spend thousands on a .crypto name only to discover later that it conflicts with a registered trademark, with no mechanism for arbitration. It doesn't matter which side of the fence you're one, this lack of governance doesn't make the system fairer, it only makes it riskier.

And The Hits Just Keep Coming

Security is another contradiction.

Advocates of Web 3.0 domains often claim that blockchain domains are more secure because they can't be seized or hijacked.

While it's true that a blockchain record itself is tamper-resistant, that security depends entirely on the private key that controls it. If that key is lost or stolen, there's no way to reverse the transfer.

Traditional domain systems have built-in protections like registrar locks, recovery tools, and identity verification.

The blockchain model shifts all responsibility to the user. One mistake, one phishing link, or one compromised wallet can mean permanent loss.

The Real Problem

All these problems would be easier to overlook if Web 3.0 domains offered a clear benefit that traditional domains lacked. However, the truth of the matter is they don't, and that in itself if the real problem.

The idea of linking a name to a crypto wallet is convenient, but it's not new. Payment systems and wallet addresses already offer readable naming formats, so what does a .cypto or .eth blockchain name add or do to help the user?

The notion of building censorship-proof websites ignores the fact that content still needs to live on physical servers or decentralised storage that can be blocked, regulated, or taken offline. So, while you might have a Web 3.0 domain and be free to do what I want with it, in reality, if you intend to point the domain towards content, a web site, service, product, or anything that uses and requires data, then you're not. Which again leads the question, then what's the point?

A Question Of Trust

There's also the issue of public trust.

Businesses rely on recognisable domains like .com, .net, and .org because people know and trust them. That didn't just happen overnight. It took decades to establish. A blockchain address like companyname.crypto might sound futuristic, but it doesn't inspire confidence, or the willingness to part with money for a product or service.

Most customers won't click on a .crypto domain, and search engines won't index it. The result is a name that looks exclusive but works like an island cut off from the rest of the web.

Reality Bites

The broader issue for Web 3.0 domains is that they have somehow been sold as the solution to a problem that doesn't exist, and a revolution when in reality they are little more than an experiment.

The technology behind them is interesting, but let's be completely honest, the practical benefits are limited at best.

Web 3.0 does not, and will not, replace the DNS. Neither will it make the web freer or more secure. And it certainly won't solve the challenges that real businesses face online.

What Web 3.0 domains do offer is a new kind of digital asset speculation, often disguised as innovation, which is why I would say, that for domain investors, creators, and business owners, the message is simple: approach Web 3.0 domains with caution. Understand what they are, and more importantly, what they are not.

It may well be that Web 3.0 domains manage to find a role in specific blockchain applications, but they're not, and nor are they likely ever to become a substitute for the tried and trusted systems that power the internet today. So, beware, and especially wary, of anyone telling you that they are, and that they will be.

The internet's strength has always been its openness. It's already a decentralised network, and it's one that connects millions of servers, routers, and users across the globe without relying on a single authority.

At this stage of its evolution, we don't need is another layer of exclusivity hidden behind buzzwords that are ultimately propagated by a few companies who see the financial opportunity in trying to take a very limited, niche product, and promote it far and beyond its means to a mass audience that simply don't need it. Instead, what we can all agree upon, is more fairness, greater transparency, and accessibility in the systems that already work, so they can continue to improve, become ever-more optimal, and address our growing needs and dependability upon this thing that we love and call "The Net."