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The Brave Browser and Basic Attention Tokens: Reinventing Online Advertising

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The Brave web browser has made its name as a privacy-focused alternative to Chrome. Based on the open-source Chromium project, Brave has taken an innovative approach to online advertising.

The browser blocks third-party ads by default, but the company has also integrated the Basic Attention Token (BAT) which promises to compensate sites with the BAT cryptocurrency in place of invasive, privacy-invading digital advertising.

How does it all work?

The Origins of the Brave Browser

Brave was initially conceived in early 2015 as a privacy-focused alternative to Google’s Chrome browser. However, Chrome is the most popular browser in the world, with many sites and extensions optimized for it.

Chrome is based on the open-source browser Chromium. As it is open-source, anyone can take the code and develop from it. Brave is an offshoot from Chromium, so it can support many of the same sites, extensions, and features of Chrome.

Where Brave differs is in how it manages ads. Online advertising has caused a lot of difficulties over the past decade. Publishers and content creators have come to rely on income from targeted advertising to operate. Internet users have been increasingly dismayed by the invasive nature of the third-party tracking required for targeted ads.

This conflict led many to install ad-blocking software and extensions. While this might improve the tracking situation, it deprives online creators of much-needed income. Brave’s solution is to block third-party advertising by default and replace it with their own curated ads.

The revenue generated from these ads is split between users (15 percent), publishers (70 percent), and the company themselves (15 percent). Unsurprisingly, this ad-replacement model based on Brave’s own ads was not well received by the wider industry.

This led Brave Software—the developer of the Brave browser—to create an alternative, more transparent solution.

A Decentralized Ad Platform

Around the time that Brave launched, so too did Ethereum. It has since grown into the second largest blockchain, processing more than 450 million transactions in just four years. If you aren’t familiar with Ethereum, you may want to check out our Ethereum Coin Study.

Where Bitcoin is a cryptocurrency and digital ledger, Ethereum is a decentralized smart contracts platform. This allows developers to create decentralized apps (DApps) based on Ethereum. DApps have become very popular, as evidenced by these DApp examples.

You can find Brave Software’s alternative to their original ad-replacement program on the Ethereum blockchain. This is the decentralized ad-exchange platform known as the Basic Attention Token (BAT).

BAT is currently exclusive to the Brave browser and only operates there too. However, BAT is a separate platform. The browser has a feature called Brave Rewards, which allows you to support the sites you visit. The rewards are distributed using the BAT utility token.

The Basic Attention Token

The Basic Attention Token is not your usual cryptocurrency. Instead, it is a utility token based on Ethereum, designed solely for use on the BAT blockchain-based advertising platform. In this case, the token and the platform are both referred to as BAT.

The Basic Attention Token whitepaper notes that the company sees BAT as a future component of web standards. BAT allows targeted ads to be displayed to users by locally analyzing their browsing history. None of this data is transferred from the device or stored elsewhere.

In the current market, you are not rewarded for your exposure to ads. The exchange takes the bulk of the income, while only a small percentage is paid to publishers and creators. Under the proposed BAT ad platform, you are rewarded with the BAT utility token based on the attention you pay to the adverts displayed.

The accrued BAT is stored in your Brave Rewards wallet. The BAT is distributed to participating publishers as you browse the web based on your attention. You can also choose to tip or regularly contribute BAT to specific publishers or creator. If you are worried that this leaves a trail of the sites you frequently visit, you needn’t be. The payments made through Brave Rewards are anonymous.

As suggested in the BAT whitepaper, Brave Software envisions BAT as a digital payment platform too. They propose that BAT may one day be used to purchase digital goods and even as a reward token for games.

The Adoption of BAT

Interestingly, the BAT platform is an open-source project. Although Brave Software’s current roadmap for BAT only includes integration with the Brave browser, in their FAQs, they note that they would like to see third-party developers taking the platform to other browsers, and even into messaging apps like Telegram and WeChat.

However, for the meantime, BAT is a platform integrated only with the Brave web browser. According to a Reddit post by the company, as of May 2018, Brave had just 1.4 million active users.

Given how few users Brave currently commands, it is hard to see how Brave Rewards and BAT will ever reach critical mass, or even high enough reward payouts to make the system sustainable.

Further complicating matters is that each installation of Brave you use, both on the desktop and mobile, can be synchronized, but your Brave Rewards wallet is unique to each installation. It is a fraught way of managing your Rewards.

This is especially true as you have to buy BAT with crypto or fiat currencies, tying up your financial assets in a specific instance of Brave Rewards. The Brave BAT wallet is also unidirectional; you can pay in, but you can’t take it out.

The Future of Digital Advertising?

There’s no doubt that the current state of online advertising is complicated. Google and Facebook dominate the space, claiming the majority of the income for themselves. The third-party tracking required for targeted ads is increasingly making internet users wary, especially in the wake of high-profile data breaches like the Facebook Cambridge Analytica scandal.

A long-term solution is needed to break the Google/Facebook oligopoly; one which protects user’s data, but also fairly compensates publishers and creators. Brave Rewards and the BAT platform and utility token are a potentially exciting solution.

However, the Brave browser has been around for a while now but has suffered from low adoption rates. The Ethereum-based BAT platform presents an option for privacy-friendly online advertising. That it is tied so heavily to Brave suggests that BAT will experience low adoption too.

The unidirectional wallet may deter users from depositing their financial assets into the platform, limiting the amount of BAT that publishers will receive. There are still a lot of hurdles to overcome before Brave Rewards and the Basic Attention Token can offer a fully realized alternative to the current systems of online advertising.

Looking for more ways to enhance your privacy with cryptocurrency? Here are the most private cryptocurrencies you can use right now.

James Frew
James Frew is a contributor to Blocks Decoded.

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