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It sounds like you're saying that the quality of some person or organisation's contribution to the web can be judged primarily based on how much money they have to throw at their domain name? That's clearly nonsense.

These people provide no benefit to the web at large, they just game the system for free money. It's a clear example of a tragedy of the commons.

No that's not what he is saying.

Analogy time - there's a part of your town where two roads come together. There's a gas station on that corner which makes you and everyone very happy, because it's a very convenient place for the gas station to be.

But how did that spot end up being a gas station? It's because the owner of the gas station valued that real estate more than the baker and the taxidermist. He paid more for it because he could earn more with it because that's what is most valuable for consumers there. These three things are connected.

Same reason GM will pay more for GM.com than a teenager named George Moore (or whatever) - because ultimately GM will generate more value for it's customers with that domain than George will.

I hope the analogy is helpful. That's how pricing of most things works.

No, that's not right.

This is the taxidermist and the baker looking at a vacant lot and wishing they could afford to open a shop there, but they can't because some asshole is sitting on it, waiting for Shell or BP to pay over the odds for the land when that won't happen because they can get land on both roads cheaper and put two of their own competing brands up to capture all the gas sales in the area.

In the real-estate world the "asshole" would rent it out to others (such as taxidermist or baker) for cheaper until She'll or BP would show up. I guess in the web world this is equivalent to the trashy ad-filled sites you see on parked sites. Why is it? I guess maybe taxidermist and bakers of the web are cheap and would rather pick another domain. Or is just not possible to legally 'rent' out a domain.

Not a fan of "this"-like comments, but I find your analogy very elegant in explaining the impact of money.

The concept of money mapping 1:1 to value/produced utility (note that I haven't defined what a unit of this is) is a difficult concept to grasp.

It's very common for people to trivialise money as a printed piece of paper and miss the higher level value as a currency that "benchmarks" the value of one's impact to another.

Society pedestalizes healthcare workers for their immediate, physical and observable impact to the lives of individuals; and it is understandably justified. However, this often raises questions to why nurses only make marginally above average salaries. Unfortunately the semantics of the supply-vs-demand economy is often lost here - any individual nurse is generally not difficult to replace should they leave (of course, depending on the market). On the other end of the spectrum, people making significantly above the market financial trading are commonly seen as negative-value producers when most do generate a significant amount of positive value, simply because it's hard to reason with a non-physical form of value. (I don't work in a field related to financial trading)

It's unsurprising why there's communities formed to demonise the concept of currency, trade and markets; and why some of them advance further and push for the breakdown of modern society.

While I don't mean to be pushing the message that "Capitalism is perfect and the utopia of reality" - I can't imagine alternative systems not involving a free market, that would achieve similar or better levels of quality of life and advancement in society (at least in current modern? times), while balancing around the imperfections of humans.

> people making significantly above the market financial trading are commonly seen as negative-value producers when most do generate a significant amount of positive value

They generate a significant amount of money - not value, money. They concentrate wealth in the hands of those who can afford to pay them to do it, a process which begets itself. That's why traders are commonly seen as negative-value producers by society as a whole - they contribute to decreased social equality.

Your argument here is circular - financial traders can only be said to be generating value if you assume that money and value are in some way equivalent. The former doesn't prove the latter.

As for nurses - if they're so easily replaced, why are so many rich societies dependent on immigrant health workers? And I'm sure you're not telling me that, if you were dying, you'd rather be attended by a stockbroker? Or could it be that "value" is a nebulous concept that is highly situational and varies from person to person?

Capitalism is very successful in certain arenas but it doesn't universally improve quality of life, and if you want an example then look no further than healthcare, and consider the difference between the US and any country with a nationalised healthcare system.

I'm sorry but that's a naive understanding of the realities of capitalism - for instance, what of the case of local baker versus the multinational? They sell the same thing (often the local store will provide better quality), but one can clearly outbid the other in order to muscle out the competition. Extraction of wealth and provision of value are overlapping but not identical concepts. Take high ticket luxuries as another example - what provides more value to a community, a Lamborghini dealership or a food bank? Most Lamborghinis spend their lives sitting in a garage. Which business earns more money? What is the value of $100 to a billionaire compared to Josie Average? To one it's a decimal point, to the other it might be the difference between eating or not that month.

So I disagree with your disagreement - you and/or the OP may couch it in the language of economics but it boils down to the same thing; more money == better.

> what of the case of local baker versus the multinational? They sell the same thing (often the local store will provide better quality), but one can clearly outbid the other in order to muscle out the competition

There's no magic there. The multinational was a local baker once - they figure out how to scale and deliver more bread at lower cost or greater quality which is what allowed them to get big. They serve more people, better.

The rest of your comment is just commie slogans, not sure how it's connected to the topic so I'll just leave you to your views there, but let me know if there's something you think needs a response.

No I don't think there's any value in us chasing each other in ideological circles, thanks, although

> commie slogans

made me smile and I do have a (genuine) follow up question about that: when I hear people use phrases like that I often wonder if they see 'pure' (let's say, US-style) capitalism and communism as a binary choice, or two ends of a spectrum. What's your viewpoint? Like I said, not a loaded question.

With regards to your statement and another stating the solution is to use it or lose it.

If you create a system that lets you take a domain name from the owner for squatting it is not a big leap to expanding the definition to include whatever you want it to be. As in, soon someone will come along and say so and so does not deserve this site because they are using it in a way that generates revenue which in turn does not generate tax.

Which is what some do to claim land others own by imminent domain.

If we incentivize taking domain names for non criminal abuse we are opening the door where only those with money will be secure in their web site ownership

Well, according to your logic the crappy website owner could also sell her domain to the brand new startup. For a price where the revenue supports the crappy website owner, not some absurd buisness.

The current domain trading situation is as if some real estate agent would buy all land instead of mediating seller and buyer. If your exemplaric "crappy website" wants to make a good price, there are still domain agents which could help with the deal.

That's right. And then it's just a small leap to say that "claiming a domain for a crappy biz and then selling it" is not that different than squatting.

> The current domain trading situation is as if some real estate agent would buy all land instead of mediating seller and buyer.

Zillow (and probably other companies) are experimenting with this, buying up quite a bunch of homes to build up an inventory of homes to sell at a profit later.

> This is actually helpful as otherwise some person comes along and buys the domain and makes some crappy website on that domain and it is their pet project so they don't want to sell (or even worse they have no contact info available and the whois is protected).

That's BS. It's like saying that scalpers help bands, because only the most committed fans will pay the prices they charge. So their concerts will be more lively, and they will have more sells at the merch booths.

Btw, a mom and pop business will probably happily sell the domain at the price the scalper charges. So it's not that they're making anyone any favors.

> A bunch of people using quality, high value domains for low value or mom and pop businesses is suboptimal too.

Your proposition requires a significant amount of "pet project" and "mom and pop" businesses getting the domain first, and also that they refuse to sell out. This has to be so much of a problem that we're willing to regularly pay squatters for the "cure".

This seems unlikely to me, and I would say the reality is closer to the squatters looking for a ransom on a domain they're holding hostage, and without them there would simply be many more domains still available from the registrars. Specifically that the hypothetical cases where a domain wouldn't be able to be negotiated at all are outweighed by the overall value currently lost to squatters.

And I doubt that business is too lucrative these days. For one domain that sells for $10000, there are hundreds just sitting there and bleeding $10 every year.

So I guess your take is that speculators help price goods optimally. And I'm assuming this can be construed as good for society, because value is created, and in most cases, appropriately taxed. Fine - I'll work with that model.

It seems to me nevertheless that for domains that system is suboptimal in itself. Although I take it that parkers are better than non-specialized agents at pricing domains, and that they may create more value than charging a $7 flat fee, I doubt that their pricing systems are dynamic and sophisticated enough, and therefore a lot of value goes uncaptured. I see a lot of them simply charge domains at ~$6,000, without accepting lower bids, so for all we know there is a few dozen million domains that could've gone for anywhere between $7 and $5,999.99 that will never see the light of day...

Oof! Well done. I always look for the unintuitive economics angle on things and missed this completely!

You're absolutely right. The world is a better place when GM.com takes everyone to General Motors and not someone whose initials are GM who got it first. The economics of domain value definitely help make this happen.

Thanks for pointing this out!

The value of a domain name is entirely due to what it is used for, the services it hosts. The registration costs are negligible compared to the value to the users of the domain name.

Domain squatters reduce the value of domain names by using them for junk advertising web sites instead of providing useful services.