Why BAT price would go up if more people use Brave Browser

Reddit user USINGPUTTY asked:

I’m a firm believer in $BAT and Brave, especially after seeing what Brendan Eich can accomplish. I’ve been a long time holder of $BAT. I do have a general question though that may have been answered before. From an investors standpoint, why are you bullish on the PRICE of $BAT?

Not the success of the coin or the browser but the PRICE of the token itself. As the system of the Brave browser should work regardless if the price is .001 cent or $10 per token. What (if there is) the incentive of a $10 token versus a penny token if the browser will work the same way regardless.

This is not a bearish post nor am I trying to slander the project in anyway. As I’ve stated.. long time bag holder with curiosity. Thank you guys.

My response: I am also a long time bat holder. I brought bat when it was 12 cents, 19 cents and 33 cents.

As I understand, you question is about the utility value of bat. Why would bat price go up if the brave browser can function without it?

Yes, Brave can function without bat but to advertise on the brave decentralized ad market, you need to buy bat. Advertisers will have to buy bat to advertise on publishers monetized in the brave ecosystem. This decentralized advertising market hasn't been implemented yet. It will be implemented soon and most likely before December 2018.

When that market is fully functional, brave will have real natural demand not speculative value (which is how bat is being valued right now). When bat ad market is launched, it will be similar to the main network launch of other projects like Golem cause when main networks of a project with utility value is launched, it then becomes a token with natural demand.

The more advertisers buy ads, the higher bat price will go. Currently, the internet advertising market is valued at 100s of billions of dollars. If brave got a small percentage of that cake, it would still be valued in several billions in market cap.

To further clarify things, let me give you an example: Lets assume that tomorrow brave ad market become functional and I wanted to advertise on brave about my online game that I own. So, I go to uphold and buy a few hundred bat tokens for that. I will then select the place and demographics I am targeting for my ads and will place a bid for that. My ads will be vetted if they contain any virus or harmful code/link and then will be placed in the market.

If my bid is the highest, I will win and then ads of my game will be shown to users who have opted to show brave ads. If I am not wrong, brave will by default, show brave ads instead of blocking ads or allowing ads (it is their main product after all). Majority of the application users generally do not tweak the default settings. So, when the ad market is functional, most of the devices currently using brave will have brave ads enabled xD.My ads will be shown to thousands of devices and as users pay attention to my ads, my balance will keep on decreasing until it reaches my target.

This way, thousands of advertisers and businesses will be able to advertise on the platform and the more money used to advertise on the platform, the higher the bat price will go. Why would advertisers pay more? They would, if brave users (with brave ads enabled) increase cause that will increase the audience.

But bat's natural demand will decrease if brave users choose to allow ads or block ads instead of choosing the "show brave ads" option. But based on stats, generally most common users leave the default settings just the way they are. So, it is reasonable to assume that more than 50% of the brave users will have brave ads enabled in their device.

This question was recently raised by David Hey in his bat review. Brave users have significantly increased recently but the price of bat isn't growing proportionally. That is most likely the reason why many investors including you are raising such questions.

Also, let me inform you that brave currently doesn't have much of a natural demand for bat. Bat token holders like you and me are taking risk by investing in this project and proving liquidity for bat token. Once advertisers jump in the market (which will happen when the ad market is launched), I think the price of bat will increase significantly. That phenomenon is generally expressed with the phrase, "TO THE MOON".

Link to original reddit thread.