Basic Attention Token (BAT)
The Basic Attention Token is a token for a decentralized ad exchange. It is the native currency of the Brave internet browser. The BAT team argues that its new decentralized ad marketplace will solve the inefficiencies of the current digital advertising ecosystem such as advertisers are paying too much for advertisements because of middle men, publishers do not get rewarded enough for letting advertisers broadcast on their site, and internet users do not get any monetary incentive for offering their internet presence while sacrificing their internet privacy.
What problem does it address?
The BAT website states that in regard to digital advertising, users are abused, publishers are hurting, and advertisers are losing. The information from the diagram below is pulled directly from the BAT website.
This is a diagram from the whitepaper:
What is BAT’s solution?
The solution suggests that it will offer more precisely targeted ads that require less data, are faster to load, exclude malware, while providing more revenue to the content publishers and even to the users who are watching ads. It will achieve this by integrated their token for a decentralized ad exchange with a new internet browser called the Brave browser.
The Brave browser already works. BAT’s whitepaper describes Brave as, “a fast, open source, privacy-focused browser that blocks invasive ads and trackers, and contains a ledger system that anonymously measures user attention to accurately reward publishers.” Because Brave natively blocks advertisements before the ads are loaded, it can load sites faster than competing browsers that use plugins to block ads after they already load the advertisement. Note that on Brave, a user has the option to block all ads, enable only BAT-supported ads, or to enable all ads.
BAT claims that “In-device machine learning will match truly relevant ads to content from a level that middlemen with cookies and third party tracking are unable to achieve, regardless of how much of the user data is extracted and monitored from external models.”
Who is the team?
What are the cons?
Brave ads have not been released yet so although the team released a working internet browser, the digital ad marketplace has not been implemented.
Because Brave ads have not been released, it is unclear how much users will have to trust the Brave team to connect publishers, marketers, and users. The monetization of the ecosystem uses a blockchain based currency but the platform itself is not a trustless-blockchain solution. This Reddit post provides some good discourse on this topic and Brave’s use of blockchain technology.
What is the point of the BAT token? Why can’t Brave just use the dollar?
The token will be the currency used for advertisers to pay publishers and users. Although it may not be limited to the Brave browser, it will be the internal currency for Brave’s digital ad marketplace. For advertisers to post ads in Brave, they will need to pay with the token. Brave will use BAT instead of the dollar because BAT’s blockchain can administer micropayments in a way that is easier and more secure than a processor that verifies payments with the dollar. If BAT were to rely on something like Paypal to administer payments, Paypal would collect user data as well as have the power to freeze certain payments from taking place.
- The CEO of Coinbase publicly approves of BAT and stated that its, “exactly the sort of token we’d like to support on Coinbase and GDAX over the coming year”. Coinbase has not added BAT to its exchange but the statement from Brian Armstrong adds a lot of credibility to BAT’s project.
- Popular YouTube host, Phillip DeFranco, openly supports BAT.
- The Dow Jones Media Group is testing Brave’s platform.
BAT is an exciting token because it is offering unique platform that addresses a big problem. They do not have any cryptocurrency competitors but they also do not have a working ecosystem yet. Brave strides to have every advertiser and internet publisher to use the token. If you want a speculative position, hold some tokens before Brave implements its ad marketplace. If you are interested in BAT but want to reduce risk, wait to buy it until they create their ad platform.