Thanks, you are right, domain investors mostly take risks in arbitraging something they are able to acquire faster than others and don't exactly produce value in the same way that you would, while say creating a game. Of course, don't mention that to the domain investors, as it would not go well.

I would say many of them think of themselves as real estate investors, where they buy up cheap pastures today, in hopes of building the next Manhattan on it tomorrow.

Indeed, domain utilization would be a lot better if they were a lot more expensive. That's partially why some new TLDs sell you a domain for 99 cents the first year, and then raise prices to $50 for the next. Assuming you took a year and built something valuable, the price to keep it goes up.

That said, even those TLDs have tens of thousands of domains (more on that later), which are registered and unused. Investors are willing to take their bets, even if it costs a lot more to maintain the bag.

I am a familiar with a few theories on raising the prices and introducing "taxes," for holding domains, and a friend and I have had numerous discussions on the subject, but so far, in my opinion, those are theories that have too many unrealistic expectations of the real world. There's a solution somewhere out there, but we are not there yet.