I pledge +50 BTC

I pledge 50 BTC.

I trust kiba to be the final judge on whether this bounty has been fulfilled.

Update done  for Mahkul.

Announced doesn't mean working, he's trying to get it started, which is fine but there are still some problems with it.

Once we have a working prototype then great, once all (most) parties are satisfied then go for it.

Should we start collecting bounty reward? Is anybody going to pussy out because now this bounty represent 15 K USD?

My pledge still stands, but I must say I'm terribly uneasy about the fixed limit on the total eventual domain names. That pretty much guarantees that namecoin won't take over the world's DNS registration.

Other than that, I think namecoin is great!

I'll pay up, reluctantly but cheerfully, if bounties are being collected at this time, but I'll be much happier if the limit on total domain names can be removed.

...and bitcoins are divisible. A quarter of a domain name isn't much use to anyone.

Vinced estimated a maximum of 30 million names. It seems that this is limited by block size, which can be increased.

So let's see if Namecoin scales reasonably. I haven't used Namecoin, so please correct me if I've misunderstood anything. I'm just looking at Namecoin from the point of view of "do I feel satisfied paying out my bounty?".

Here is my understanding (edited to reflect replies up to 17 May). Please correct any errors:

1. 50 namecoins are generated with every block.
2. The block target time is 10 minutes.
3. Generation difficulty scales the same way as Bitcoin.
4. The number of namecoins per block doesn't decrease. It's 50 forever.
5. There is no 21-million limit to the number of namecoins generated.
6. To reserve a domain costs 0.01 NC plus mining fees, so there is a hard limit of 720000 new names per day, but in practice the limit will be much lower because not all namecoins are used to reserve domains.
7. To activate a domain costs an amount that started at 50 NC but halves every two months, down to a minimum of 0.01NC plus mining fees. So after about two years, the activation cost (cost of "first update") will be as low as the renewal cost ("name update").
8. The renewal cost is 0.01 NC plus mining fees, at least once every 12000 blocks. In practice a figure of twice per 12000 blocks seems realistic, to allow for DNS changes and also for people to renew before the 12000-block deadline to avoid the risk of losing their domain names.
9. The mining fees are kept by the miner who generates the block containing the transaction. The 0.01NC fee to reserve a domain is sent back to you in the form of an unspendable coin that represents the reserved domain. The "first update" and "name update" fees are burned.

If these points can be confirmed or corrected, I'll have a better feel for namecoin's scalability.

(PS: Kiba: chaord's bounty had an expiry date, so the total bounty is lower than your figure.)

Thank you khal for your response. I've updated my previous post to reflect your clarifications. The points that are still unclear for me are:

1. Does the block reward stay at 50 coins, or does it reduce over time.

2. Is there a 21 million limit for generated namecoins.

3. The "special 0.01NC that is sent to you and reserved" is the coin that represents the domain name, right? It sits in your NC wallet but can never be spent, even if you let the domain name lapse, right? Where does this unspendable coin come from: the domain reservation, the first update, the renewal, or all of these?