Donuts announced Tuesday it had invested in Netki, Inc., a digital identity startup dedicated to democratising digital currency. Netki uses the domain name system (DNS) to humanise typically complex numbering mechanisms needed to exchange digital currency.
Donuts is the largest operator of new gTLDs with 194 new gTLDs that have been delegated and 1.763 million domains under management.
Partnering with Netki, Donuts say, further advances their strategy to invest in emerging technologies that have the potential to dramatically expand the addressable market for domain names. This comes on the heels of Donuts’ strategic investment last month in GeoFrenzy, Inc., a company that has developed a complete infrastructure for defining and managing smart geofences. Both investments originated from Donuts Labs, an effort to leverage Donuts’ capital and registry expertise to invest in emerging technologies that promote new uses for domain names, utilise the DNS, and otherwise complement Donuts’ interests.
Blockchain Technology and the DNS
As a distributed database, the blockchain maintains a continuously growing list of data records. Blockchain-based applications, such as bitcoin wallets, utilise complicated, 32-character alphanumeric wallet addresses; Netki’s Wallet Name Service makes blockchain applications user-friendlier by generating easy to remember “wallet names.” Netki leverages “secure DNS” (known formally as domain name system security extensions, or DNSSEC) to map wallet names to blockchain-based public addresses. End-users can then safely share their wallet names in a way that improves security and privacy when compared to current practices.
“Netki is addressing an unmet market need in the rapidly growing blockchain space,” said Donuts co-founder and CEO Paul Stahura. “Their use of the DNS to simplify the sharing of wallet addresses by creating wallet names is novel and is an idea that will make this technology more secure, adaptable, and user-friendly.”
Netki’s Digital Identity Certificate was also a key attractor for Donuts. The product further removes barriers to blockchain adoption. It gives developers and organisations a method to privately exchange, sign and authenticate sensitive documents and identity information with legally validated digital identity certificates. This removes one of the last remaining barriers to adoption of blockchain technology for financial institutions and other regulated entities who need to meet “Know Your Customer” and other statutory requirements. Beyond banking, this solution can be extended to allow for the private exchange and authentication of any type of required information between individuals or institutions on and between distributed ledger systems.
“Donuts’ leadership position in the domain space makes the company a great investor and partner for us,” said Netki founder and CEO Justin Newton. “The company’s expertise in innovative DNS services blends perfectly with our mission of building naming and identity services for next-generation blockchain users.”
Stahura reaffirmed that Donuts Labs continues to seek attractive opportunities with products or services related to the DNS. “Donuts has a unique opportunity to put its expertise to work in companies that are adjacent to the DNS or otherwise employ a highly scalable registry model,” he said. “I expect further investment or acquisition activity this year.”
Terms of the deal with Netki have not been disclosed.