A peer-to-peer network similar to handles Namecoin's transactions, balances and issuance through a based proof-of-work scheme (they are issued when a small enough hash value is found, at which point a block is created).

The main site itself is accompanied by an open protocol for password-less authentication with Namecoin identities, a corresponding free-software implementation and a supporting extension for Firefox.

[citation needed] In October 2013, Michael Gronager, main developer of libcoin, found a security issue in the Namecoin protocol, which allowed modifying foreign names.

[10][citation needed] Namecoin was also mentioned by ICANN in a public report as the most well-known example of distributing control and privacy in DNS.

[7] In December 2018, a proposal was tabled on the OpenNIC mailing list to drop support for Namecoin .bit domains.,[12] citing Spamhaus' (and by extension other antivirus software) blocking of several of their servers owing to spread of malware from some .bit domains, as well as concerns about potential child pornography.

[13] In the same month, OpenNIC was advised to drop support for .bit namespace owing to security concerns of Namecoin and PRISM Break developers.

[14] In July 2019, OpenNIC again voted on dropping the .bit namespace, citing "numerous problems with support of NameCoin domains" and recent animosity between the two projects.