One of the reasons domain prices are low is that people register domains they are not using.
Just like they buy books they don't read. Or buy jewelry they don't wear. (And yes bring on all the replies about the differences that you want but keep in mind the time you picked up the last item on the shelf at the drug store that maybe someone else had a greater need for down the road. Or took the last seat on an airplane.)
No problem with buying domains and letting them sit there until you decide what to do. No problem buying domains that you think you could sell either, in general. As much as this might piss people off who feel the domain should just be there ready when they want it.
Squatting would be registering a domain that specifically (edit: and reasonably) belongs to someone else. Say you hear the local pizzeria opening is called "xyz pizza" and you register "xyzpizza.com". Despite what the media and all the typical articles say about this.
By the way when you say "all registered for various purposes" there is no qualification about what the purpose is so essentially some people would define you as a squatter depending upon the way they see this issue.
Not true. See this:
http://cyber.law.harvard.edu/property00/domain/legislation.h...
(The definition I gave is actually more broad.)
I agree that you are right with that statement. I don't agree that people are well informed about this enough to know that that the statement is wrong.
That belief is something that comes from the days of a few bad actors (panavision and mtv domains come to mind and some others) that made the practice which is now called cybersquatting what it is instead of what it should be based on. And by the way even the current definition was shaped by Intellectual property lawyers as a totally one sided law brought about to protect the interests of a certain class of owners. (As was UDRP process for that matter).
But yes that is the uninformed view of most people. Just like many ordinary people associate the word "hacker" with "bad" and not "good".
As has been pointed in another reply, people buy things all the time with the intent to profit from the sale of which they do not use. Since the beginning of time this has not been a bad thing. And why should it be? (Not to mention the fact that there are alternative TLD's it just happens to be that .com is the ubiquitous one.)
It is considered to be good to buy things that you don't intend to use to resell them if you are adding some kind of value in the reselling; for instance, people who have a local retail store, who are adding the value of being close and convenient, rather than having to go all the way to the producer.
Domain squatters are adding no value. If you just buy a whole ton of domains speculatively, and then sell them off at high markup because so many domains are gone that it's impossible to find good ones, you are adding no value, you are only taking advantage of an artificial scarcity for your own profit.
We have plenty of other negative words for this kind of behavior in other domains. Ever heard of a scalper? There is really no significant difference between a domain squatter and a scalper; they are just people who induce artificial scarcity and use that to run a profit without actually adding any real value.
At least in my own experiences, I've never seen a domain sold by a private party for less than 5x the typical price from a registrar. This would raise the average price of domains, not lower them as you suggest.
It has definitely raised prices for a name that would be known in advance to be valuable. No question there. But the increase in number of people registering multiple names has supported a reduction in price.
The actual number of names, (not taking into account putting a dash in one or more places and the fact that there are only a few 1 letter names that aren't blocked and some other stuff) is approx 26 to the 63rd power.
1.3909801171074219559097425909479540384265584214249033... × 10^89
While that's finite it still a huge number of possibilities. (Like ipv6)
I have in my hand an invoice dated 1999 (my earliest domain was '96) and the charge is $70 (for two years). Before that if my memory is correct the price was $100 for two years. Before that the price was 0 (yes 0 when there were so few takers).
It's a little chicken and egg but the fact that a high volume registrar (like godaddy) registers so many domains allows them to make so little per domain. (Actually that's not entirely true they also make money by selling you things you don't need but that's a entire separate subject.)
So the bottom line is this. If you look at the registration activity speculators and non users of domains drive up registration volume greatly. But of the names they register, only a small percentage of those have anyone interested in buying at any price. So in the end the fact that they do what they do drives prices down for everyone.
Edit: Although I agree that's little consolation if they have the domain you want. But there is certainly no guarantee that the name you want wouldn't have been grabbed by someone before you anyway, right? (See woodrich.com below)
For example, the following are all available at a low low price:
woodrichplumbers.com
woodrichpainters.com
woodrichrestaurant.com
But not "woodrich.com" (registered in '96)
Reverse causality?
I wish there were a tool that would verify that they're all still registered under my account at GoDaddy.
Also, godaddy just got private-equitied, so it's going to be extra shit as they ruin the company, pay themselves an enormous fee, and sell it to the next greater fools [2].
[1] https://www.markmonitor.com/services/domain-management.php