The BAT Rises – Basic Attention Token

Basic Attention Token (BAT) is a new distributed token of utility being utilized in conjunction with the recently debuted Brave browser. The team behind BAT, which relies on the Ethereum network, was founded by Brendan Eich, the father of Javascript as well as co-founder of Mozilla and Firefox. The browser and token are, in conjunction, designed to mitigate systematic problems within the digital advertising space. These problems, as identified by Eich’s team, stem from overwhelming complexity that, ironically, arose despite earlier expectations that the unprecedented availability of information on the internet would amplify and accelerate advertiser access to relevant users. A dense ecosystem of 3rd party intermediate ad entities, malvertisements (malicious advertisements that lure users to sites bearing malware), botnets that fraudulently drive up ad revenue and ad data transfer steps and the irresultant induced latencies that, in concert, delay webpage load times and comprise a major fraction of mobile web user data fees.

All of these individual factors contribute to undercut ad revenues on the part of content publishers, impair cost effective targeting of audiences by advertisers, and cause slower and more expensive web surfing experiences for users. The BAT white paper’s assessment of the systematic issues in the advertisement space doesn’t hold back: advertisers suffer from poorly constrained returns that are obfuscated by the complexity of the whole system. Publishers face an array of costs associated with providing ad space, such as those for coordinating campaigns, and running analytics applications. Publishers can also lose money when users encounter malvertisements. Additionally, the BAT team cites loss of privacy on the part of users.

To drive home the point, the BAT white paper lists some sobering statistics. Based upon an Association of National Advertisers (ANA) and White Ops report they cite, at the time of writing, bot fraud losses projected for 2016 were 7.2 billion USD, A 900 million USD increase from the previous year. Between 2015 and 2016, malvertisement increased 132%, according to figures cited from RiskIQ, with entertainment and news websites comprising the majority of targets. The white paper also refers to a study reported in Business Intelligence that estimates that half of mobile data is ad related, costing a typical user as much as 23 USD monthly.

More creepily, at the time of the white paper’s writing, 73% of revenue from ads was made by Google and Facebook. This hurts publishers because users who arrive on their site via social media display one third the engagement of direct users, with respect to time. Ad-blocking software hurts publishers in the wallet as well.

BAT and Brave

BAT and the Brave Browser are designed to mitigate all of these problems. Firstly, Brave doesn’t accept trackers or ads from outside the BAT network. Ad revenue is generated in person. A certain number of BAT are associated with an individual ad and the decision whether to mete out tokens for engaging those ads is determined locally. A learning algorithm within the browser assesses what kind of ads are ideal for the user and then presents them to the user. Provided certain conditions are met, relating to how ads are viewed, the user will get credit for viewing the ad, all without any personal browsing data being broadcast to God knows whom.

To clarify, BAT is still a work in progress. While the team behind it have a working anonymous ledger, it’s set up for donations and providing attention driven payment to publishers right now. Within Brave, a secure vault is currently operating to enable user attention monitoring and donations. To secure user privacy, an algorithm known as ANONIZE maintains a gap between the user’s information and the internet. The browser is still at the pre-release stage at this time, but it is available for users to get to know. BAT 1.0, as the white paper calls it, will see the Brave browser include a BAT wallet. User privacy will be protected using a Zero Knowledge Proof algorithm, a ledger within Brave, for ad revenue.
Further down the road, BAT will fully distribute verification and transfer using the Ethereum network. To defend the privacy of users, a Zero Knowledge Proof protocol will again be utilized. The creators of BAT hope that it will emerge as a standard for future web development.

They see BAT as having potential use in high precision ad targeting by small businesses, a tool for purchasing premium articles for oneself or others without subscribing to a service—an empirically unpopular option—higher resolution media, the purchasing of digital goods, or to allow a user to reward commenters online, making those rewards more compelling. They also speculate pay to post schemes might serve to deter trolls. Perhaps, they continue, games requiring a small fee of BAT, and relating to other digital media will be a niche that developers will attempt to exploit.

ICO

BAT’s ICO was May 31, 2017. It raised 36 million USD before closing 30 seconds later. Its creators’ original intent was to raise 24 million USD worth of Ether (ETH). 1.5 billion BAT was offered and this was a one-time non-refundable sale. BAT was sold at 1/6400th of an ETH, and its price will remain fixed at this ratio. They are not intended for speculation or to function as a security.

According to Blockchain News, 184 investors are said to have bought the token in the brief offering. There are reports that a fraction of investors individually acquired more that 5% of the BAT offered, with 4 people alleged to have initially controlled 40% of BAT before reselling the tokens on exchanges at a 900% profit.

Vitalik Buterin, co-founder of Ethereum, views the concentration of purchasing activity as the predictable consequence of capped offerings, tweeting “This is a $2220 tx fee, used to cut in line in BAT ICO. “Ethereum avg txfee $1”. Statistics include stuff like this. No moral connotations intended with “cut in line”; it just so happens that capped sales degrade into highly wasteful all-pay auctions.” –On Twitter

Richard Kastelein, Blockchain News founder, strikes a more sardonic tone: “There’s some irony in crypto anarchists (who make up a fair size of the crypto community) complaining about lack of rules when it comes down to letting the free markets freely enriching the rich.”

To learn more or download the white paper, check out the BAT website at: http://basicattentiontoken.org

Download the Brave browser at: https://brave.com

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. Follow me on Twitter for more of my opinion.