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A beginner’s guide to domains and how they work

By Alexandra Gavril - February 9, 2021

While everyone knows that different sites have different names, not everyone knows where these domains come from, or who’s in control. If you’ve ever wondered, this post is for you.

Here is a walk through the world of domain names where we explain everything you want to know, from what they are and where they come from to how they work and more. And since this post is intended for everyone, amateur or professional, chef or plumber, young or old, you can rest assured it’s also code and geek jargon-free!

Let’s get started!

What is a domain name?

A domain name is a human-friendly address, sometimes called a URL (Uniform Resource Locator) or web address. It was created to make IP, or Internet Protocol, addresses more accessible and easier to remember.

An IP address is a string of numbers, much like a phone number, that is assigned to every computer. But, unless you’re Sheldon Cooper, an IP address with seemingly random numbers like isn’t exactly easy to remember. But a domain name like www.123-reg.co.uk is.

So that’s why domains were created – to make it much easier to reach the exact location of a website without having to remember its numeric address.

Your domain name is unique to you, just like a fingerprint. When someone types it into a browser, they’re taken directly to your space on the Internet where they can view your website. Learn more about domain names

What is the difference between a domain name and a website?

It’s easy to think of a domain name and a website as being the same thing. But while they’re closely connected, they’re different things.

When you register a domain, you get a web address but not a website (this is something you’ll need to build). So while you can have a domain and choose not to use it for a website, you can’t have a website without a domain.

For example, if you want to get started online and you’ve picked a name, you’ll first need to register it, start building your website and then find a host so your site is visible on the web and people can access it. As your business grows, you can always change the look or design of your website while keeping the same domain name.

Where do domain names come from?

The domain name system (DNS) is overseen by the Internet Corporation for Assigned Names and Numbers or ICANN. This organisation was formed in 1998 and has been coordinating the maintenance and management of the DNS ever since.

While ICANN doesn’t rule supreme over the entire Internet, it does have the power to approve new extensions, to manage their function, and to shut them down if they don’t work according to the rules created by ICANN. So they basically ensure that the DNS and IP spaces that make up the Internet’s infrastructure are all running smoothly.

But ICANN doesn’t do all the hard work by itself. They delegate control over the various Top Level Domains like .com, .net, .org etc., to various entities known as Registries. These companies then become directly responsible for managing specific extensions. So, a registry controls and maintains the database of domains within their extension and makes it accessible through WHOIS tool.

Now, the registry may designate entities called Registrars. A registrar is a company that sells domain names to the end customer. So, if you want to register a web address for your new site, you’ll go to a registrar like 123 Reg that provides domain names from different registries, all in one place. If the domain you want is available, it’ll be registered in your name with 123 Reg.

This infographic from ICANN should help you to better understand the registry process:


How do new domains get released?

Now, let’s assume ea new extensions has been approved is about to hit the market. Typically, there are three stages to the registration process:

Sunrise: This stage gives trademark holders a chance to register their domain names first. The idea is that they get the chance to protect their brand early. Often, the sunrise period will allow trademark holders to block registration of domains containing their trademark. This means they don’t have to worry about remembering to renew and manage lots of domains, but still ensures nobody else can use them.

Landrush: At this point, it’s possible for anyone to bid for a domain name. The process is different for different domains, but what usually happens is that you can apply to register a domain name. At the end of the landrush period, domain names are allocated appropriately. If there’s more than one applicant for a domain name, an auction is held. Landrush enables you to pay a bit more to secure particularly attractive domains.

General availability: This is where the new domains become available on an ongoing basis. Anyone can take their pick of remaining domains, and it’s first-come-first-served. If the domain you want is available, you can register it there and then.

Not every domain extension release follows this process exactly. But most of them follow a similar pattern.

What if you miss out?

If you have your eyes on a particular new domain name, get in there early when it’s released – especially if you think there’ll be competition.

Landrush is your best chance to secure the name, although you may have to pay more than at general availability.

If you miss out altogether and can’t find any alternatives you like, you can always source a domain name in other ways. There’s a thriving secondary domain name market, where individuals and businesses buy and sell domain names. You can buy a domain that has already been registered with Premium Domains from 123 Reg. (Remember though, trademark rules still apply.)

How do domain names work?

To understand how domains works, you first need to understand what a Domain Name System or DNS is, and how it works.

Everyone who has ever used the Internet has used the DNS, even without realising it. DNS servers are necessary because they’re like the Internet’s equivalent of a phone book. They manage a massive database of domain names and translate them into IP addresses to route your request to the site you’re trying to reach. Think of it as dialling a phone number to connect to the person you’re trying to call.

A DNS is required because while domain names are easy for people to remember, computers or machines access websites based on IP addresses. So a domain name system is important so you don’t have to remember the IP addresses of all your favourite sites, but instead type in a domain name to access the site you want to visit. The browser will then search through the DNS and find the exact IP address of the site you’re looking to access.



Now that you know how important a DNS is, let’s explain how domain names work, from how they’re structured to how to register yours.

Every domain consists of at least two parts: the actual domain name and the TLD or Top-Level Domain. In google.com for example, “google” is the domain and “.com” is the TLD. An organisation may have a hierarchy of sub-domains further organising its Internet presence, like “bbc.co.uk” which is the BBC’s domain under .co, an additional level created by the domain name authority responsible for the UK country code.

Here’s a graphic to get a clearer picture of how a domain name is structured:



Want your own web address? Here’s how domain name registration works, and the steps to follow to get your own:

  • Run a search on the Whois database to find a name that isn’t registered by anyone else. There are lots of sites that offer free Whois database searches, including 123 Reg. If the search comes up empty, you’ll know that the name you want is available.
  • Now you can register the domain name with a registrar. With 123 Reg you can get a new web address for as little as 99p.
  • Next you’ll need to get the best UK web hosting for your domain so anyone on the web can view and access your site.

Watch this video to learn more:

When were domains first created?

If you’re curious about the history of domain names and when the first one was created, here’s what you need to know.

Domains were first introduced more than 31 years ago with the registration of Symbolics.com. This web address was registered on 15th of March 1985 by a computer manufacturer, and it was the start of domain names.



From then until the end of 1985, five more domain names were registered, as follows:

  1. symbolics.com -15/03/1985
  2. bbn.com – 24/04/1985
  3. think.com -24/051985
  4. mcc.com – 11/07/1985
  5. dec.com – 30/09/1985
  6. northrop.com – 07/11/1985

Before 1995, anyone who wanted to could register free domain names. That all changed when the National Science Foundation awarded tech consulting company Network Solutions the ability to charge for registration. So it’s in 1995 when domain names were first sold, with prices starting at $100 for a two-year registration.

How many domain names are registered to date?

There were 370.7 million domain names registered up to the end of Q3 2020, acording to Verisign.

How many domain extensions are there?


With more than 1,500 domain name extensions in existence, you should have no problem finding your perfect web address, with whichever extension you prefer.

Curious to know what domain name extensions are available? Here are just a few you can choose from:

  • Generic top-level domains (TLDs): The most popular ones are .com, .net, .biz, which can be registered by anyone. However, TLDs like .edu or .pro are restricted to educational entities, respective professionals with a license.
  • Country code top-level domains (ccTLDs): These represent specific countries or territories. While some require residency or a presence in that specific country, most have no restrictions on who can register them. Here are some examples of ccTLDs: .be (Belgium), .de (Germany), .es (Spain), .uk (United Kingdom), .us (United States of America).
  • Geographic extensions: Ideal for local businesses as it tells people exactly where you are located. .berlin, .london and .vegas are a few of the many to consider.
  • Generic top-level domains (gTLDs): These extensions are a fantastic alternative to the traditional .com or .biz. A web address with a gTLD like .dentist, .accountant or .construction tells people what you do right from your domain.

If you want to see what other domain name extensions are available, check out the cheap domain registration page on 123 Reg and take your time browsing through the many different categories.

What’s the most expensive domain name?

The most expensive domain ever sold was Voice.com, which sold for $30million in 2019. You can find a list of the most expensive domain names here.

Statista.com also put together a ranking of the most expensive gTLDs worldwide. In February 2015, Google purchased the .app domain for 25 million U.S. dollars. Online retailer Amazon spent 4.59 million U.S. dollars for the gTLD .buy in September 2014. But the most expensive gTLD was .web, which was won at auction by Nu Dot Co LLC for 135 million U.S. dollars.



What restrictions are there?

There are some general rules and restrictions to consider when registering a new domain. Depending on the type of domain, there might also be other restrictions that you’ll usually be made aware of by the registrar.

General rules and restrictions for registering a domain name:

  • You can only use letters, numbers and hyphens. Other forms of punctuation and symbols cannot be used.
  • You can use multiple instances of hyphens, but not a double hyphen. You also can’t use hyphens at the beginning or end of the domain name.
  • Punctuation (.) can only be used for grouping the domains in hierarchies, meaning to separate the domain name from the extension.
  • A web address can begin and end in a number, example: 9-5.uk
  • Domain names are not case sensitive. This means you can advertise your name using capital letters if you wish. For example 123-REG.CO.UK is the same name as both 123-Reg.co.uk and 123-reg.co.uk.
  • Some TLDs allow registration of web addresses containing special characters and accents such as æ, ø and å. These are called IDN (Internationalized Domain Names).
  • A domain name must contain between 2 and 63 characters before the punctuation. Additional rules apply for the different top level domains.

Aside from these general rules and restrictions, make sure to also pay attention to domain specific restrictions.

Now that you know everything there is to know about domain names, including how they work and what extensions are available, go ahead and register your preferred domain at 123 Reg.