From the proposal [1]:

The only criticism of relevance that I have received (so far) from those 
reviewing DNSNMC is that people do not like domain squatters and therefore do 
not want to switch to a system where all the existing trademarked and 
copyrighted names have already been registered:

https://www.reddit.com/r/netsec/comments/1t20wi/therightkey_dnsnmc_deprecates_certificate/ce45865
http://lists.randombit.net/pipermail/cryptography/2013-December/005959.html
http://lists.randombit.net/pipermail/cryptography/2013-December/005960.html

I think this is one of the main things that is holding Namecoin back from 
widespread adoption, and therefore we must address this issue.

Herein I propose a very simple method to address this problem:

namecoind must be modified to give existing TLDs special treatment in a way 
that paves for a smooth transition from today's DNS, to a Namecoin-based DNS 
like DNSNMC.

New namespaces will be created for each of today's TLDs, and only the owners of 
those domains (in the deprecated, old DNS system) can register them. For 
example, only the owners of apple.com can register com/apple, etc. Proof of 
ownership is done by special NMC DNS records that contain the owner's 
cryptographic signature/fingerprint. When Namecoin clients receive a 
notification that someone wants to register a domain in the com namespace, they 
check the JSON request to verify that it was signed by the same signature that 
appears in the old DNS records. If they match, the registration request is 
accepted and added to their local blockchain. If it does not match, the request 
is discarded. Similarly, the namecoin client itself will perform this check 
locally before sending out the request to other peers (to provide instant 
feedback to users attempting to register something that doesn't belong to them).

Thoughts?

[1]: http://dot-bit.org/forum/viewtopic.php?f=5&t=1439

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