The way the Domain Name System works, people who want to look up a domain name will ask a DNS server what IP address corresponds to a certain domain. You can run your DNS server yourself or let someone else do it, just like web hosting. But how will people know which DNS server to ask about *your* domain?
In any system where you want to let someone claim a unique name, you’ll need some kind of authority for deciding what name belongs to whom. What we did is create an organization that sets the broad rules, ICANN, and it approves a registry that runs each top-level domain, like Verisign is runs `.com` for example. Then through Verisign or Verisign-approved registrars, you can register a `.com` domain. The registrars deal with low-level issues like billing specific customers, and they compete to offer services at lower prices, while Verisign sets policies they have to follow. What registering a domain does is let you add your DNS servers as authoritative, so that if anyone wants to know where your domain really points to, they’ll know to ask your servers.
You’re welcome to apply to Verisign or whatever registry operator to be approved to be a registrar, it’ll be expensive though. Big companies with lots of websites do that sometimes, Google for example. In fact Google asked ICANN to create a `.google` domain, too, and it is the registry operator for that.
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