The technology behind cryptocurrencies has many exciting applications beyond enabling financial transactions. Namecoin, one of the earliest alt coins, uses the peer-to-peer verification technology that makes cryptocurrency possible to create a decentralized DNS. Users of Namecoin can look up specially registered domain names on the network, rather than relying on a large centralized look-up server owned by a large corporation. Namecoin has almost no retailer acceptance, which isn't a big issue, since the main financial use of Namecoin is registering domains on its network.
Normally when you enter a URL into your browser, that URL gets sent to a central server that takes the address you're looking for and sends you back an IP address, just like a huge digital phone book. The problem, according to Namecoin developers, is that those centralized servers are usually owned by large corporations and governments, who can use their influence over the servers to track your behavior and even restrict your access to certain sites. Namecoin solves this problem by taking the responsibility for storing domain names away from central servers and storing that information in a peer-to-peer network instead. Just as traditional cryptocurrencies use a distributed verification system to maintain a public ledger of transactions, Namecoin uses a distributed verification system to maintain a public address book.
In order to register a domain in the Namecoin system, you need to spend a small amount of Namecoin. This "network fee" is programmed to become smaller and smaller over time, ensuring that plenty of desirable domain names are still left for latecomers. Most names registered through Namecoin use the .bit domain, but Namecoin can also provide human-readable versions of Tor's usually unreadable .onion domain names and more. Namecoin's stated mission is preserve privacy and freedom of expression on the internet while remaining approachable to new users.
While Namecoin is not designed to be a full-fledged currency, its value still bears mentioning. Namecoins currently go for less than two tenths of a cent, and the price seems likely to fall further. In Namecoin's case, however, this may actually be a good thing. While the real price of Namecoins dips ever lower, the network fee for registering new domains remains the same or decreases, meaning that .bit domain names are constantly becoming cheaper to register. If internet censorship were to increase sharply, say with the passage of a SOPA-like law in the United States, you might see the price of Namecoin rise again.
As a currency, Namecoin leaves much to be desired, but as a distributed DNS, it has the capacity to change the way that you use the internet. By decreasing reliance on centralized servers for information, Namecoin is putting cryptocurrency technology to good use.