Web3’s Identity Crisis: Why Naming Conventions Could Make or Break the Decentralized Future

Forget .com land grabs—the next digital gold rush is happening on blockchain naming systems. Web3’s promise of user-owned identity hinges on one glaring vulnerability: human-readable names.

How ENS, Unstoppable Domains, and others are battling to become the ’who’s who’ of decentralized identity—while VCs quietly hoard premium handles like crypto’s answer to Manhattan real estate.

Because nothing says decentralization like paying $500k for walletname.eth while hedge funds park their Bored Ape proceeds in virtual naming rights. The more things change...

The Cost of Gibberish

A name is civilization’s shorthand for memory. Strip that away and you get noise and a shrinking audience.

The traditional web hosted over 368 million (pronounceable) registered domain names in the first quarter of 2025 alone. Compare this to Ethereum’s Naming Service (ENS) and its less than 1.7 million total active domains, and the chasm becomes clear.

The solution here isn’t technical — it’s cultural. Potential Web3 users aren’t rejecting decentralization, they’re rejecting addresses that look like printer byproducts. Meanwhile, developers and Web3 natives feel the gibberish provides “security.”

This is, however, really just a resistance to change. In fact, a short, memorable domain name that can replace a wallet address where one wrong character can mean huge losses adds safety, rather than detracts from it.

If the industry began to adopt DNS as a standard for payments and other services, not only might we see fewer financial losses, but on-chain transactions would become much less terrifying to new users. Indeed, this small detail could be the one thing holding back meaningful crypto adoption.

Adoption Without Trust

Crypto cheerleaders love to wave adoption figures, but the mood music tells a different story.

A survey in January 2025 found that 59% of people familiar with crypto still don’t trust its security, and even 40% of current holders admit they’re uneasy. Nearly one-in-five have already had trouble getting their own money out of a custodial platform. Another 38% of non-owners swear they’ll never touch crypto, citing scams and complexity as their main reasons.

This paints a grim picture. Moreover, these statistics indicate a culture that wants to keep things complex, rather than simplify them. When the average citizen sees nothing but ice-cold hashes, the entire system feels like a casino run in Latin.

Here’s the choice: either Web3 starts handing out names people can pronounce and trust, or it keeps handing Wall Street the keys to “user-friendly” custody. If most newcomers arrive already suspicious and half the veterans stay nervous, the movement isn’t scaling — it’s treading water as it waits for a usable User Experience.

Sensical names won’t magic away every fear, but without them, the trust deficit will keep widening until any sign of mass adoption is reduced to a gated weekend conference where insiders high-five each other and everyone else watches from the sidelines.

Deepfakes Demand Signatures

However, while engineers are debating trilemmas, generative artificial intelligence (AI) is eating reality.

Deep-fake fraud cost organizations $200 million in the first quarter of 2025. And our complex, easily corrupted wallet addresses are a huge part of the problem. When all most can do is check the first and last four characters without going blind, copy-paste malware has a heyday.

A pronounceable, permanent, self-owned name, however, turns math into memory. The employee who ignores hashes can still verify that alexmb.bnb signed their salary, and the journalist skeptical of screenshots can cite Immutable data hosted at climatedata.ens and feel confident in the facts. Where language meets cryptography, trust scales.

Name It Once, Keep It Forever

Zooko Wilcox, a cryptographer and computer scientist, once claimed that between security, decentralization, and readability, only two are possible at the same time. That was 20 years ago. Fast-forward to 2025, and Web3 proves that all three can work together simultaneously.

The roadblock isn’t maths, it’s rent. Almost all DNS and webhosting services require users to keep up with monthly payments or lose their data. And so, miss one payment, and your identity vanishes from every search, site, and review. For the person who used a site to store meaningful photographs or legal documents, that is devastating.

A permanent name flips the deal. With “pay once, store forever” models, users mint a DNS once and lock it to a key. There is no yearly bill and no corporate kill-switch. If the key is lost, then the name is gone — it’s unfortunate, but at least no third party can repossess it.

As the digital world continues to evolve, we will all have to hold names (identities) that last…or keep losing what is rightfully ours. Right now, we can choose a name to be held for life, passed onto the next generation, and pinned to generations of contributions.

Every LINK anchored by a word rather than a string of code leaves much less space for censorship. Choose words over hashes — then hodl.

The next iteration of the Internet will remember people, not passwords.

Disclaimer: The opinions in this article are the writer’s own and do not necessarily represent the views of Cryptonews.com. This article is meant to provide a broad perspective on its topic and should not be taken as professional advice.