Hello!

Could you clarify who owns the domains and how they are distributed among registrars? Additionally, I'm curious about the discrepancies in pricing between registrars, some fixed and others fluctuating.

Is there a base cost for domains? I understand that some entities may purchase valuable domains and resell them, but how is the price determined for subsequent years? Who profits from the rental fees and what are the amounts typically like?

To put it simply, I am interested in learning more about the ownership and pricing structures of domains and how they vary depending on the registrar.

The process of managing domain names and IP addresses is overseen by the Internet Corporation for Assigned Names and Numbers (ICANN), which is responsible for managing the domain zone - the entire Internet namespace. Within ICANN, it is possible to purchase the right to create and manage a Top Level Domain (TLD), however it should be noted that not all TLDs are available for purchase as some are reserved for geographical zones.

The owner of a TLD creates an office for the technical registration of names, which is carried out by a single technical registrar responsible for making changes to the database. While the technical registrar may sell the right to accept applications from end customers to other offices (referred to as registrars), it is worth noting that those offices do not actually register anything - they only submit applications to the real registrar.

It is important to understand that when renting a domain name, you don't BUY it - it has no resale value and can be terminated at any time by the registrar. The terms of the lease agreement are determined solely by the registrar, who is responsible for paying a certain amount to the "real" registrar while keeping the remaining profits.

The pricing for domain registration and renewal is predominantly influenced by market conditions, rather than any intrinsic value possessed by the domain name itself. It is possible to become a registrar and set your own prices, provided that you sign a contract with a "real" registrar. As for establishing one's own zone, this is generally not feasible for the average person.

When discussing top-level domains (TLDs), they are managed by ICANN as detailed on their Wikipedia page. In contrast, if you are referring to a second or higher level domain, it belongs to the individual or organization that registered it. The cost of owning a level 2+ domain name can vary depending on either the registrar or the current owner if it is a domain with a particularly desirable name.

It is worth noting that the value of a domain name is subjective and can fluctuate based on numerous factors, including cultural trends, market demand and even current events. Additionally, as previously mentioned, renting a domain name is more accurate term than purchasing one, and the conditions of that rental agreement are defined by the registrar.

The domain name system is fundamental to the functioning of the internet, and it is managed and controlled by a complex network of organizations and stakeholders. At the top of the hierarchy is ICANN (the Internet Corporation for Assigned Names and Numbers), the global non-profit organization responsible for coordinating the domain name system and accrediting domain registrars.

Domain registrars are the companies that actually register and sell domain names to end-users. These registrars range from large, well-known providers like GoDaddy, Namecheap, and Google Domains to smaller, specialized registrars. Each registrar sets its own pricing and policies for domain registration and renewal.

The base cost of a domain name is largely determined by the top-level domain (TLD) extension. Generic top-level domains (gTLDs) like .com, .net, and .org typically have the lowest base prices, often around $10-15 per year for a standard registration. Country-code top-level domains (ccTLDs) like .uk, .de, or .jp can have higher base prices, sometimes $20 or more per year.

However, the true price complexity comes from "premium" domain names. These are short, memorable, or otherwise desirable domain names that registrars have identified as having higher market value. Registrars will often charge significantly more for these premium domains, sometimes hundreds or even thousands of dollars per year.

The reason for the price discrepancies between registrars is that they each have different pricing models and profit margins. Some registrars offer relatively fixed, standardized pricing, while others employ dynamic, variable pricing schemes. Registrars may also purchase and "park" expired domains, then resell them at much higher prices.

In terms of who profits, the domain registrars are the primary beneficiaries. They collect the annual registration and renewal fees from domain owners, while also keeping a significant portion of that revenue as their own profit. ICANN also collects a small fee from registrars for each domain registered or renewed.

Domain owners, whether individuals or businesses, are responsible for paying the annual renewal fees to maintain their domain ownership and control. This can be viewed as the "rent" they pay to the registrar to secure their virtual real estate. Some domain owners may also profit by reselling valuable domain names they've acquired at a higher price to other interested parties.