No!! Domain name registrars are not selling any domain names. It is a popular misconception in the web hosting field. I think, to understand it better, you need to know the difference between domain registry and domain registrar.
A registry is the system that provides you the top level domains (TLDs) like .com and .org. The registry maintains the record of all the registered domains. This is to make sure the availability of domains when someone tries to open a new registration.
Whereas, a registrar is a system by which the domains are distributed to the users. When a user approaches the registrars with a domain name registration request, the registrars check domain availability with the registry. Further, if the domain name is available it forwards the request to the registry.
Before knowing the working you need to familiarize with the following terms.
Registrant: An end user, either an individual or an organization, started with the process of registering a domain name.
Reseller: A business organization who sells domain registration as their service. A reseller will not have any authentication from the Domain management System or DNS.
Registrar: A service which takes requests from the registrants and communicates it with a registry. Many big names including Google itself are involved in domain name registrar services. Registrar services require authentication from DNS.
Registry: A system in which it stores and analyzes, when required, all the domain names registered in it. Registry operators deal with this authoritative master database.
ICANN: A non-profit american organization responsible for the coordination of day to day procedures and maintenance of a domain registry. It is also a DNS that issues authority.
WHOIS: A managed system within the DNS to keep all entries to the registry. This to have a track of who is using which domain.
Imagine you are a registrant looking for a particular domain for your business. You can register with the registrar in two ways. Either by contacting a registrar directly or through a reseller who provides managed services for domain registration. In both cases the domain registrar will contact the domain registry for further proceedings. Registries, after analyzing your request, can either accept or reject it. Managing the TLDs is also the responsibility of a registry.
Managing the TLDs is carried out by a DNS or Domain management System. If you are planning to avail a domain name, you need to know about Internet Corporation for Assigned Names and Numbers or ICANN. If you want to register a generic top level domain or GTLD, you need to register with a domain registrar. This will create an entry of yours in WHOIS. Even if you as a registrant seek the service of a reseller also, this is necessary. If a registrant, either individual or an organization, doesn’t want their details as an entry in WHOIS, they can opt for a proxy service provider while registering with the registrar.
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