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Like many security researchers, I see a lot of new malicious sites every week, far too many in fact. One thing that sets security researchers apart is that we can see a top-level domain (TLD) like .cc and recall instantly that it belongs to the Cocos Islands in the Indian Ocean, with a tiny population, and a history of some issues with malicious hosting several years ago.  As superpowers go, it is definitely not getting us into the X-Men anytime soon

It was quite unusual, then, when we came across the .bit TLD. For starters, it wasn’t on our radar. It was not even assigned by ICANN in the first place. However, that was not stopping malware from communicating using that particular TLD.

Some further investigations revealed that .bit belongs to a system known as Namecoin. Namecoin is very similar in concept to its more famous big brother Bitcoin (which, unless you have been living under a rock for the last couple of years, you know about). Namecoin serves as a decentralized way to register and control domain names.

At first glance, Namecoin looks perfect for criminal purposes – it provides a way to anonymously register domain names that is outside of the control of any country or international body. Neither can it be sinkholed at the domain level. My fellow researchers and I wondered – why aren’t all the bad guys using this?

Digging further into the system, however, revealed some very interesting downsides. To read more of our analysis of the Namecoin/.bit system for use with malware, as well as an investigation into one malware we did find using .bit domains – you can read our latest research paper titled Bitcoin Domains .

Joint Research carried out with David Sancho