What technical issues are solved by storing DNS data in the main block chain, as opposed to an alternate yet connected block chain, as Mike has proposed?
I find the idea of one block chain per application, but connected in such a way that they can all be mined against simultaneously, much more appealing than one monolithic block chain. Similar to those that want to change Bitcoin to have constant inflation, or distribute payouts more fairly, or anything else... rather than trying to impose a change on all Bitcoin users, why not start a new chain instead?
First, not every bitcoin miner is going to be a domain name block chain miner, or timestamping miner, etc. This means that to generate a block in that system that is also tied to a block in the bitcoin block chain could take significantly longer. If you have 1/1000th of the bitcoin network's hashing power also working on the domain name block chain, then approximately 1 out of every 1000 blocks will generate a block for the domain name block chain. Not a problem for bitcoin, but it is a problem for the alternative block chain. If that ratio were to ever reverse to where bitcoin has the minority in hashing power, then bitcoin will suffer from blocks being few and far between. I'm not sure that anyone has sufficiently solved this problem.
Another problem that comes from this asynchronous block generation rate is paying the miners fees for generating blocks in the alternative block chain. Currently with bitcoin, when you send a transaction with a fee, you know the miner does not get the fee unless the transaction is accept, and the miner knows your transaction will not be accept without him getting the fee. But with two block chains where blocks are generated at different rates, you don't know ahead of time who to send the fee to (say for registering a domain name)...the next person that generates a block may not be mining for the domain name block chain, so they shouldn't get the fee. Someone might just assume pay the domain name miner afterwards, but this is not enforceable, and due to this lack of enforceability it opens up the system to spam attacks where someone sends a bunch of domain name registrations because they don't have to pay for them, yet, and can't be forced to pay for them in the future, but the miner's won't be able to know this, and have know way to know whether or not to put them into a block. If they don't, they risk losing fees they could have gained...if they do, they risk filling up the block chain with useless data for nothing.
These issues do not exist when the currency and secondary application are both on the same block chain. If someone has solved this asynchronous block generation rate issue, please point me to the post. Perhaps I've overlooked it. Otherwise, I believe the solution that is most likely to work for alternative applications of a block chain is for both the alternative application and the currency to be on the same block chain, which leads me to either using bitcoin, due to it already existing and thriving, or to compete against it.