A beginner’s guide to buying and selling Namecoin in Canada.
Namecoin (NMC) is an open-source cryptocurrency based on the bitcoin (BTC) code. Launched in 2011, its goal is not to decentralize the financial system, but to decentralize the Internet domain name system (DNS). Namecoin also aims to improve website security, to make websites resistant to censorship and to improve the speed of the Internet infrastructure.
If you’re thinking of buying Namecoin, read on to find out how this cryptocurrency works and how you can purchase NMC in Canada.
Did you know?
Namecoin was the first altcoin to be introduced in the cryptocurrency world back in 2011.
Where to buy NMC
You can buy NMC tokens on a selection of exchanges, including the following:
A step-by-step guide to buying NMC
If you’ve done your research and have decided to buy NMC, here is how you can purchase your coins.
Step 1. Create an account at an exchange that offers NMC
You can register for an account at any of the exchanges that list NMC. For this example, we’ll use Poloniex due to its relatively high trading volume of NMC.
The first thing you’ll need to do is sign up by providing your email address and creating a password. You’ll then be emailed instructions on what you need to do to verify your account. While you wait for your ID to be verified, you can activate two-factor authentication for increased security.
Step 2. Deposit funds into your account
Most cryptocurrency exchanges don’t have the option to deposit fiat currencies, such as Canadian dollars (CAD), so you’ll need to deposit bitcoin (BTC) or Ethereum (ETH). If you don’t have any BTC, you can follow our guide on how to purchase BTC. You can also check out our guide on how to buy Ethereum (ETH).
For example, you can deposit BTC on the Poloniex website by moving your cursor over the “Balances” button at the top right of the page and then clicking on “Deposits & Withdrawals” in the drop-down list. From there, select bitcoin and then click “Deposit”.
Step 3. Buying NMC
Now that you have BTC in your account, on most exchanges you’ll need to find an “Exchange” or “Markets” button and then search to find the NMC trading pair.
If you’re using Poloniex, you have to click on the “Exchange” button for a price chart to appear. To the right of the chart, you will see the “Markets” tab. Below it, you have the option to select the currency that you want to trade. Click “BTC” and then scroll down the list until you find NMC. You can also search for your desired currency pairing in the box provided.
Once the NMC/BTC price chart appears, scroll down the page to where the “Buy NMC” square is located. If you want market order execution, click on “Lowest Ask” and the current price will be copied into the buy square below. Enter the number of NMC tokens you want to buy and click the “BUY” button.
How to sell NMC
You can sell NMC tokens on the same exchange where you bought them. However, this time you’ll need to look for the “Sell NMC” square and click on “Highest Bid” so that the current market price is copied below. After that, you can enter the number of NMC tokens you want to sell and click “Sell”.
Which wallets can I use to hold NMC?
Namecoin has its own desktop client for Windows, Linux and Mac OS X available for download on the Namecoin website. This software acts as a wallet, but you can also use it to register, track and update .bit domains.
Learn more about wallets in our ultimate guide.
How does Namecoin work?
When it was launched in April 2011, Namecoin made history as the world’s first-ever altcoin. Based on the same code as bitcoin, Namecoin is remarkably similar to the world’s best-known cryptocurrency – both use the SHA-256 algorithm and can be mined, and both are limited to a total supply of 21 million tokens. In fact, Namecoins can be mined alongside bitcoin.
The first fork of bitcoin, Namecoin was created with the aim of creating a decentralized DNS system that is resistant to censorship. The DNS is basically a phone book for the Internet, which turns the URL you enter into your browser into an IP address that can be read by your computer. However, the very last part of a domain, for example the “.com”, is controlled by central parties and therefore at risk of censorship.
The developers of Namecoin created a decentralized .bit domain, independent of the Internet Corporation for Assigned Names and Numbers (ICANN), which is the governing body for Internet domain names.
Real world applications for Namecoin
The primary use of Namecoin is to purchase and renew .bit domain names. This DNS is decentralized, resistant to censorship and cannot be shut down. This is a valuable option for websites which run activities that their governments may want to restrict.
The only setback is that you cannot browse .bit websites through your regular browser. You will need to install software for that purpose. Also, if you own a .bit domain you will need to renew it every 200-250 days or it will expire. The cost for registering a .bit domain is 0.01 NMC, but there is also a transaction fee, which is determined by miners.
What to consider when buying NMC
If you’re wondering whether to buy NMC or other cryptocurrencies, make sure you’re aware of the risks involved in these complicated and volatile digital assets. Some things to take into account if you’re considering buying NMC include:
- Supply. According to CoinMarketCap, at the time of writing on 12 April 2018, the circulating supply of Namecoin was 14,736,400 NMC. The total supply once all tokens are mined will be 21,000,000 NMC.
- NMC use. Everyone who wants to register or renew a .bit domain needs NMC tokens to do so. However, it’s worth investigating the number of .bit domains that have been created to get a better idea about the potential level of demand for this coin.
- Availability. NMC is not as widely available as many other cryptocurrencies and is listed on only a handful of exchanges. This lack of easy access could potentially have an impact on demand for the currency.
By researching the technology behind Namecoin and the functions of this digital currency, you’ll be in a good position to make an informed decision about whether or not you should purchase any NMC.