[jyscao]

>I don't view middle man parasitic behavior as valuable, and see no market value performed here other than extraction.

Seeing middlemen businesses as "parasitic behavior" is a common misunderstanding of their role in the economy. They make possible commercial transactions between initial producers and ultimate end-consumers, where and/or when such transactions could never have taken place affordably without their presence.

[jgeada]

Except in this case the middleman added thousands of dollars to the cost without adding anything of value: not curation, not discovery, nothing. Without this middleman acquiring an expired domain would have been whatever the nominal registrar cost (somewhere between $10 to $100 or so per year for a domain)

Useful middlemen do serve a role and add value. A parasitic middleman just extracts value without adding any value anything in return.

[jyscao]

>Useful middlemen do serve a role and add value. A parasitic middleman just extracts value without adding any value anything in return.

And do tell how you distinguish "useful middlemen" from "parasitic middlemen". These are meaningless terms based on your own value judgements. In other words, they're completely useless in practice.

A universally recognized transaction-coordinating mechanism works much better. And guess what? We already have that: price.

[jyscao]

>Without this middleman acquiring an expired domain would have been whatever the nominal registrar cost (somewhere between $10 to $100 or so per year for a domain)

Except you have no idea if $10-100 charged by registrars should be the actual price of those domains. The only two factors that should determine the price of something is the lowest price the seller is willing to sell it at, and the highest price any single customer is willing to pay. That's it.

If some government policy existed that enforced domain names must be priced below $x, then that functions as an artificial price ceiling, which necessarily results in a misallocation of the resource in question. In this case, that would mean, domains going to people who are less incentivized to put them to the best possible use.

Take the very example of friendster.com: when Mike Carson bought the domain from his park.io customer, friendster.com went from a website that only generated ad revenue to now a new social networking app idea he's developing, which I'm sure even you'd agree is an improvement to its previous use. And that was only possible, because Carson believed the 30k he was being asked to pay in order to acquire ownership of friendster.com was worth it (to him).

If all domain prices were artificially capped to $100 (or whatever other arbitrary threshold) and below, then in all likelihood, you'd see the problem of malicious actors who bulk buy then squat domains become worse, not better. You might counter, why would they do that? Since on the surface, it'd appear that they cannot profit from those domains by re-selling them at a higher price later on. Sure, perhaps not directly (but even this is debatable, because what'll likely happen is you'll just create a black market for it); but maybe they'll just tell the people who want to take the domain off of him that whatever app idea they're building, he wants a x% stake in?

In economics, your intentions don't matter, it's all about the incentives your proposed policies create. And to that end, price caps never work, because they just shift the collateral damage elsewhere, while making the economy worse in net.