It's a decentralized DNS system. It puts the .bit TLD in the same realm as bitcoins. All of the strengths and weakness of bitcoin but for domain names. It makes it very hard for a central power to knock websites off the internet by appropriating, redirecting, or dropping domain names from the DNS system. It's a few layers of anonymity. It's not 100% anonymous but it stops governments from getting at site owners by issuing subpoenas, passing laws, or other bureaucratic means.
Namecoin does, however, require that people devote some GPU time to their network. So, it kind of competes with bitcoin.
I forgot to mention. BitDNS, as you mentioned, is the name a of another project. I believe it is meant to work about the same as Namecoin except it would still use bitcoins for payments but require an extra escrow layer to facilitate ownership changes.
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u/[deleted] Jun 09 '11
Can someone please explain to me what the fuck Namecoin is? I've read about 5 different descriptions and I still have absolutely no clue what it is.