The Basic Attention Token (BAT) is the native token that is used in the Brave ecosystem.

Brave offers a privacy-focused browser that shields users away from 3rd party ads and trackers. On this browser publishers, advertisers and users are all incentivized to help each party generate the most value.

The token and Brave project is quite an interesting one as it is trying to solve some fundamental problems that exist today with digital advertising.

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For example, consumers are growing ever more conscious of how their data is being misused by social media companies like Facebook. This is evidenced by the growing demand for ad-blocking software, which now operates on over 600 million mobile devices and desktops globally.

The industry seems no longer capable of aligning incentives between advertisers, publishers and users. The advertising ecosystem has become rife with data exploitation (users personal data being exploited, as well as the high costs of data from downloading irrelevant and impersonal ads) and inaccurate reporting of user engagement.

Demand for BAT, an ERC20 token, will be driven by the following factors:

  • Advertisers pay Publishers in BATs to have their ads viewed by users
  • Users earn BATs when they view ads. User attention is monitored on their devices and in the Brave browser using machine-learning technology (private data always remains contained within the devices being used).
  • Advertisers get better ROI as a result of a more accurate and incentive based system

How is Attention Measured?

Brave takes the unique approach of measuring attention at the browser level, meaning it keeps track of user engagement within an active tab in real time, showcasing relevant ads based on time spent scrolling over specific content in the tab.

The browser calculates an ‘attention score’ based on whether a page is viewed for a minimum of 25 seconds, and the total amount of time that is spent on that page. Other pieces of data (such as type of content being viewed) are included and sent to the Brave ledger system, which records and sends payments to the publisher and user based on the final attention score.

This process enables BAT to more effectively measure user attention and accurately reward publishers and users.

The company also boasts its use of Machine learning to provide a superior process for tracking user activity in order to share more relevant ads.

Today, digital ad services use Cookies and other 3rd party trackers, which often fail by serving ads for products that users have already bought.

Reducing Data Costs & Replacing Centralized Ad Networks

According to the New York Times, $23 of the average users monthly phone bill goes towards paying for the bandwidth spent on ads and trackers, resulting in 21% less battery life.

Data from the following publishers shows how the cost of downloading ads + tracking is a large portion of the cost of content:

Ad Costs Compared
Image Source: brave.com

As Brave Co-founder Brendan Eich describes it, “we’re paying to be bothered by ads”. The Brave browser significantly reduces bandwidth by blocking irrelevant ads while serving only those that fit the users interests based on attention monitoring within their device.

BAT also aims to displace advertising networks (or ‘ad exchanges’). These middlemen help broker deals between publishers seeking ads, and advertisers seeking publishing space.

How Advertising Networks Work
Image Source: liesdamnedlies.com

However through this process, what is gained in efficiency is lost in the quality of ads shown to relevant users.

The more advertising networks exist to broker deals between publishers and advertisers in the system, the further advertisers and publishers are separated from each other, which results in more impersonal ads being shown to the wrong people purely for the sake of these middlemen exchanges earning more money.

Daisy Chain Example of Advertisements
Image Source: liesdamnedlies.com

BAT completely decentralizes these ad networks, enabling publishers and advertisers to deal with each other directly through the BRAVE browsers attention monitoring technology, which increases the quality of ads shown while maintaining efficiency.

Daisy Chain Example of Advertisements
Image Source: BAT Whitepaper

BAT, like most other tokens, can be applied as a utility in the Brave browser platform, or traded for Bitcoin and other coins on public exchanges like Binance.

Brave has plans to provide multiple use cases for users holding BAT tokens. For example, Publishers will be able to offer premium content for those who pay using BAT. Users will also be rewarded with tokens for promoting the publishers content themselves.

History and Team

Brendan Eich founded Brave Software in 2017. As the creator of JavaScript and co-founder of Firefox, he’s certainly proven capable of developing large scale and disruptive software when it counts.

In the same year it was founded, the BAT token raised an impressive $35million in just under 30 seconds during their ICO.

They have since secured early partners and brought on top talent developers and executives. Other key members of the team include:

  • Brian Bondy – Lead Developer, co-founded Brave. Previously: Khan Academy, Mozilla, and Evernote.
  • Scott Locklin – Senior Engineer, Co-founded Kerf Software. Machine Learning, Forecasting & Quantitative Finance.

BAT is located in San Francisco and has a workforce of up to 30 employees.

Coin Performance and Value

As of April 24, 2018, BAT is priced at $0.46 per token. The token launched in June 2017 at a price of $0.17.

Unlike Bitcoin and other Alt-coins, which hit their peak during the December boom, BAT was a slightly late bloomer, peaking at $0.90 on January 9th, before dropping down to its launch price of $0.17 on March 19th. BAT has since made a climb up to its current price of $0.46.

BAT Token Pricing
Image Source: coinmarketcap.com

The chart indicates that BATs price (like most other coins) is moving in accordance with the general wave of market sentiment around crypto-currencies. I believe it will take some time before the technology is validated enough for the token to start defining its own price trends in the crypto-currency market.

Pros

  • In true Blockchain fashion, BAT aims to displace the middlemen ad exchanges responsible for polluting the ad experience by creating an incentive based decentralized network where publishers, advertisers and users can more effectively feed off of each other’s needs
  • The team is highly experienced and has proven to be successful in creating disruptive technologies
  • Braves browser provides much faster speeds as a result of its ad blocking features
Brave Browser Compared
Image Source: coinmarketcap.com
  • Braves privacy browser is already up and working with 2 million monthly users
  • The browser monitors user attention in real time, while maintaining anonymity and privacy for users
  • The public is increasingly becoming more aware of how ads are negatively impacting their experience. This is shown by the rise in ad blocking software globally (600m devices). At the same time, traditional publishers have lost approximately 66% of their ad revenue over the past decade

Cons

  • BAT is relying on people adopting the Brave browser, which could be trouble because of strong competition from Google Chrome, Safari and Brendan’s former company – Firefox. There have been discussions around of Brave developing a Chrome extension to expose their solution to more users, but no release date has been confirmed.
  • Advertisers may still face challenges with converting users into paying customers. It seems like the profile of a Brave browser user is someone who:
    1. Already uses or is interested in using an ad blocker
    2. Wants a faster browsing experience
    3. Wants to get paid for viewing ads
    4. Wants to see more relevant ads
    5. Wants to save money on mobile data

At this time it’s not so clear which of the 5 traits most accurately describe a Brave user. One would have to assume that having access to an ad blocker would be most important.

However in order for Brave to provide advertisers with a higher ROI, they need to attract users who are willing to pay for products they discover through ads, even though they may only be using the service to earn tokens by viewing these ads.

Generally, people who are interested in viewing ads for money usually aren’t in a position to pay for the products being advertised to them, and in the worst case, may seek to manipulate their views in order to earn more tokens.

This could be a concern for advertisers hoping to attract real customers and increase sales by using Brave.

Competition

Brave has a few competitors in the Blockchain space disrupting digital advertising.

Papyrus and Adshares both offer similar Blockchain based advertising ecosystems. The main difference is that they focus primarily on publishers and advertisers, leaving users out of the equation.

Braves toughest challenge however will come from the fierce competition it faces in the web and mobile browser space.

Browser Market Shares
Image Source: brave.com

As of March 2018, Google Chrome, Safari, Internet explorer and Firefox collectively made up about 90% of the browser market. Ad blocking capabilities and even an incentive based token ecosystem are features that any of these browsers could replicate if they choose to.

Brave will have to offer much more in order to be considered a viable alternative for everyday users.

Is BAT Worth Investing In?

Overall I believe BAT is a solid long-term investment to make. The team is incredibly talented and is proving to be amongst the first wave of post ICO companies that are actually delivering as promised.

Today, the Brave Browser is looking to further jumpstart its token economy by giving free tokens to anyone using the browser (which currently sees about 2million monthly users).

Despite BAT still needing significant scale, the company has already confirmed that more than 12,000 publishers have verified themselves for BAT payments. Furthermore, Dow Jones Media Group has offered free two-year subscriptions to new Brave users and said it plans to experiment with Brave-supplied ads.

Looking ahead to the rest of 2018 and 2019, I can definitely see BAT forging multiple institutional and publisher partnerships, especially because of the executive teams superior credentials in software innovation.

Conclusion

Brave browser faces stiff competition from the likes of Google Chrome, Safari, Firefox and others. Although they’re currently showing impressive growth with 2 million monthly users, the browser is going to need to form large strategic partnerships that allow for BAT to become integrated into the browsing experience of everyday users across the web.

At the same time, advertisers are going to need assurance that the incentive based model being proposed will actually help them convert their ad dollars into product sales, and not just guarantee more ad views.

Although Ad blockers and a token-based ecosystem are great value propositions, I believe what will ultimately bring Brave and its Basic attention token to mass adoption is the cost savings from reduced data spent on ad downloads and trackers.

The appeal of a browser that can help people cut down 20% of their monthly phone bill is widespread, and could be utilized to form partnerships with mobile data providers like Verizon and AT&T.

Ad downloads and trackers currently cost users $23 a month in mobile data. Braves browser cuts down on these costs significantly through its ad blocking technology.

Based on this knowledge, Brave could partner with AT&T, Verizon and other mobile data providers to reward customers with a discount on unlimited data plans when they adopt the Brave browser on their mobile phone.

From AT&T and Verizon’s perspective, if customers commit to using a low bandwidth browser, data providers can offer them unlimited data at a lower cost to their business.

AT&T and Verizon could benefit from people paying a slightly lower price for their unlimited data plan ($10 or $15 discount for example) because those same consumers might be saving mobile providers $20 or $30 per account by using the Brave browser to cut down their average monthly data usage by 0.5GB.

Ultimately, the value of Braves browser to AT&T and Verizon would be to help them reduce the cost of serving their customers with unlimited data. Such a partnership could allow Brave and BAT access to several million more users.

There’s currently no mention of a mobile data provider partnership occurring, but as a consumer I’d definitely be excited about the possibility of Verizon charging me $15 less to use their unlimited data plan by simply switching browsers and purchasing BAT.

It’s too early to tell, but I wouldn’t put it past Brendan and his team to explore discounted mobile data plans as the ideal incentive to encourage more mainstream adoption and increased voluntary ad views on the Brave Browser.

Featured Image via basicattentiontoken.org

Disclaimer: These are writer opinions and should not be considered investment advice. Readers should do their own research.

Posted by Toju Ometoruwa

Toju Ometoruwa is a Northeastern University alumni who is the co-founder of Pazima, a start-up that provides secure lending options for low-income workers. His passion is to empower communities across the African diaspora through the blockchain.