The advantages and disadvantages of giving a valid name to a sequence of DNA detected from environmental specimens is presently a hot debate amongst the mycological community. The idea of using intracellular DNA (''mgDNA'') from environmental samples as holotypes seems at face value, to be a good idea, considering the expansion of knowledge among these 'dark taxa' or 'dark matter fungi' that it could provide (i.e. sequence based taxa without physical specimens and formal nomenclature). However, the limitations of using mgDNA as holotypes needs careful thought, i.e. can we use a short mgDNA fragment, which may contain a small amount of genetic information, to allow discrimination between species? What is the point and are the potential problems of giving valid scientific names to mgDNA? Numerous mycologists and taxonomists, who have many years of experience working on the taxonomy and phylogeny of different groups of fungi, are concerned about the consequences of providing valid names to mgDNA. There has been much debate, through several publications on the considerable problems of using mgDNA as holotypes. The proponents have tried to debate the virtues of using mgDNA as holotypes. Those against have shown that identification to species using mgDNA does not work in many fungal groups, while those for have shown cases where species can be identified with mgDNA. Different disciplines have different reasons and opinions for using mgDNA as holotypes, however even groups of the same disciplines have dissimilar ideas. In this paper we explore the use of mgDNA as holotypes. We provide evidences and opinions as to the use of mgDNA as holotypes from our own experiences. In no way do we attempt to degrade the study of DNA from environmental samples and the expansion of knowledge in to the dark taxa, but relate the issues to fungal taxonomy. In fact we show the value of using sequence data from these approaches, in dealing with the discovery of already named taxa, taxa numbers and ecological roles. We discuss the advantages and the pitfalls of using mgDNA from environmental samples as holotypes. The impacts of expanding the nomenclatural concept to allow using mgDNA from environmental samples as holotypes are also discussed. We provide evidence from case studies on Botryosphaeria, Colletotrichum, Penicillium and Xylaria. The case studies show that we cannot use mgDNA due to their short fragments and the fact that most ITS sequence data presently result from environmental sequencing. We conclude from the evidence that it is highly undesirable to use mgDNA as holotypes in naming fungal species. If this approach adopted, it would result in numerous problems where species identification cannot be confirmed due to limited sequence data available for the holotypes. We also propose an alternative DNA-based system for naming DNA based species which would provide considerably less problems and should be adopted.