I am currently reading a book called "Blockchain Bubble or Revolution: The Present and Future of Blockchain and Cryptocurrencies" by Mehta, Agashe & Detroja. I arrived at a section about the Namecoin project and its lack of utility and subsequent failure. I thought it would be interesting to share, and have your views on why this project failed? How could Namecoin's fundamentals be compared to Ergo? Could Ergo be at risk of following a similar trajectory?

Personally, I thought it was useful to see that you can have great tech and ideas, but if it does not reach mainstream adoption, it remains irrelevant. No matter what happens with Ergo, I joined this project because I appreciate the fundamentals, the philosophy, and our community. I will be the last to ever leave it, as it is in the spirit of the cypherphunk & bitcoin movement, and takes it a step further by including smart contracts and oracles.

Anyway, here is the extract I am referring to;

"Later, Namecoin had a more ambitious idea: replacing the website registration process, which is also centralized. When you start a website, you need to buy the domain name from a company known as a registrar; each domain ending (.com, .org, .de, .jp, and so on) is managed by a different registrar. But each registrar is ultimately managed by a company called ICANN, which means that ICANN could, in theory, delete any website’s domain name and thus take it offline.

So Namecoin introduced .bit, a new decentralized domain name ending. Anyone could register a .bit website on Namecoin’s blockchain, and anyone running the Namecoin software could visit any .bit website.

The problem was that you couldn’t visit a .bit website unless you were running Namecoin’s software, meaning that the chicken-and-egg problem was now in full effect. Plus, the Namecoin software was tedious to set up and required extensive configuration and setting up a website was needlessly complicated.

Unsurprisingly, the .bit domain ending failed to take off. Michael Dean said that only about 30 real .bit domain names were ever created, and they were all mirrors of sites with “traditional” domain endings, showing the same webpages from a different domain name. So there was no new content available on the Namecoin sites.) And just 5000 people had set up the software to view .bit sites.

Meanwhile, because registering a .bit website was so cheap, it was flooded with hundreds of thousands of squatted websites, or placeholder sites that took a popular name in the hopes of being sold for a profit later. Imagine buying, say, facebook.bit or disney.bit for $5 and selling it for $5 million if .bit took off. Suffice it to say that .bit was mostly used for shady purposes.

The final nail in the coffin for Namecoin was the team’s poor cohesion and strategy. At one point they tried to partner with ICANN and Google, the same companies they were trying to “disrupt” — Dean called it “making a technology to circumvent governments and then handing it over to governments.”

The verdict is that Namecoin failed. NMC, the cryptocurrency you use to buy and sell domain names and DNS entries, isn’t even in the top 200 cryptocurrencies by market cap, or the total value of all coins in circulation. And, as Dean mentioned, usage of the products themselves is low.

The main reason Namecoin failed is that it underestimated people’s inertia. Their solution may have been more decentralized and technologically sound than the current system, but setting up this kind of two-sided market (with consumers on one side and website makers on the other) was tremendously difficult, especially when .bit was so hard to use.

There’s little evidence that Namecoin thought hard about these people problems; it seems they just focused on building a cool, technologically stronger product without thinking about how to actually get people to use it. As we’ve seen throughout this chapter, that’s a common problem for blockchain apps: focusing too much on the technical problems without thinking about the people problems."