Online advertising industry and its problems
The online advertising industry is booming. In just 15 years, it managed to grow from a niche type of promotion to a leading one. The businesses love digital advertising. According to the statistics, each dollar spent on Google Ads brings them on average twice as much in revenue.
However, there is also a major competition in this sector. In order to satisfy both publishers and advertisers, ad networks have to engage the audience. Higher engagement rate = higher profit. But what tactics exactly do ad networks use and are they always morally right?
Chasing bigger revenues
Google and Facebook both make the majority of their profit from advertising. These companies hold the largest share of total US digital ad spend, with 38.6% and 19.9%, respectively.
They dominate the market because they are the best options for both advertisers and publishers. Advertisers are able to reach a wider audience while spending less than on other platforms. Publishers are able to earn more for the same amount of views or clicks.
But how exactly can an ad network deliver such a stellar statistics?
The answer is simple: by increasing user engagement. If users are genuinely interested in the products and services of advertisers, they will click on a banner and are likely to buy a product.
However, every user is unique. This means that in order to increase engagement rate past a certain point, it is needed to serve personalized ads.
How can you know what a certain user is interested in?
The answer is simple, according to a certain companies: by collecting personal information.
In the not-so-distant past, a number of technology giants have been involved in scandals related to users’ personal information collection. The numbers of such scandals continues to grow.
The most notable one is Facebook and Cambridge Analytica scandal.
In 2016, Facebook provided the data of 87 million accounts to a company called Cambridge Analytica. The latter then used the data gathered to improve Trump’s presidential campaign. In the middle of March, 2018, the story was exposed.
The scandal had an effect of an information bomb.
Mark Zuckerberg had to testify in Congress. The Federal Trade Commission opened an investigation. A number of media sources urged users to delete Facebook. The reputation of the company was completely destroyed. Or so it seemed.
Fast forward one year, and Facebook has more users than ever. But can you really trust a company that leaked the data of 87 million of its users behind their backs?
Since then, several large companies have been accused of using the personal information of users without letting them know. For example, Google, Amazon and Apple have been accused of letting contractors listen to users’ personal conversation in order to improve their voice recognition algorithms.
The information is being collected in a similar fashion to personalize ads as well. Ever wondered why Facebook shows you ads of smartphones shortly after searching Google for a new device? Yeah, you’re right, that’s how targeted (personalized) ads work.
BAT addresses the issues
Few projects have team members with as good a track record as BAT’s developers. People developing Brave browser are talented specialists that have already changed the world in several ways. Here are the most prominent Brave team members:
- Brendan Eich – creator of Mozilla Firefox. If you have been using Internet for at least the last 5 years, chances are that you encountered Mozilla Firefox. At the end of 2009, the browser was the second most popular one worldwide, with a market share of over 30%.
- Brian Brondy – played important roles in the development of Mozilla Firefox and a number of different projects. Other his projects worth mentioning are Evernote and Khan Academy, which has become staggeringly popular in the last 5 years.
- Yan Zhu – a member of the World Wide Web Consortium’s Technical Architecture Group (TAG). She worked on security of Yahoo during 2014 and 2015. Impressively, Yan is part of Forbes 30 under 30.
What is Brave Browser and why is it special?
Brave is a privacy-focused browser with advanced built-in features. Currently, browser supports Linux, Windows, macOS, as well as Android and iOS. It was first launched in the beginning of the 2016. Initially, the browser ran on Muon engine, however, at the end of 2018 the developers moved it to Chromium.
The main difference between Brave and other Chromium-based browsers, such as Chrome or Opera comes from the advanced privacy protection features:
- Tracker blocking – by default, Brave blocks third party cookies, trackers and suspicious scripts. If a website user views appears to be broken, he/she can turn all or some of the blocks off.
- Advanced incognito mode – ordinary incognito mode does not protect your privacy; it just doesn’t save your search history. Brave developers recognized this issue and created one more browsing mode in addition to normal and private. It is called “Private mode with Tor” and utilizes Tor network to hide your identity from the websites you are visiting.
- Advanced adblock – Brave blocks the majority of ads by default.
Not only does Brave offer more privacy features than other browsers, it is also simply very fast. In many cases it will be faster than Chrome or Opera, for example, thanks to its in-built adblock.
Hype around BAT ICO
On May 31, 2017, Brave team conducted an ICO. The results were truly phenomenal. The whole supply of 1 000 000 000 BAT was bought in just under 30 seconds! The company managed to raise 156 250 ETH worth approximately 35 million USD at the time.
Some of the buyers managed to buy large sums of BAT. In total, only 130 investors purchased the tokens during the ICO. 5 of them bought more than half of the total supply. Just think about it: one buyer paid more than 4.5 millions USD worth of Ether to buy a large stake of BAT!
Of course, that means that BAT was extremely centralized at the beginning. Thankfully, the situation seems to have improved in the past 2 years. Note: we assume that more addresses = more BAT holders, which may or may not correctly reflect the situation. Take a look yourself:
Overall, such interest around ICO showed that there are a lot of investors that believe in the potential of Basic Attention Token and Brave browser.
Role of BAT in Brave ecosystem
What is Basic Attention Token?
Basic Attention Token is the key element of Brave Rewards program. The token is based on Ethereum’s ERC-20. Its total supply is 1 500 000 000 units.
BAT connects all the sides – publishers, advertisers and users – in Brave Rewards. It is demonstrated in the token’s logo:
Here is a great video by Coinbase that shortly explains how BAT works:
BAT for users
Normally, users do not get paid to watch ads on websites. Not the case with Brave Rewards. BAT allows users to monetize their attention, rewarding them for watching ads.
This is how the system works in practice.
When using Brave browser, users can choose whether they want to see ads or not. If they opt out, almost no ads at all will be shown (Brave adblock still works). If they choose to see ads, they will occasionally receive unobtrusive pop-up notifications for Brave. 70% of revenue made from every ad watched goes to the user.
It’s up to users what to do with their earned tokens. They can complete KYC procedure and sell their BAT or opt to reward their favourite creators with the tokens they earn automatically.
BAT for publishers
First things first. In order to use Brave Rewards and earn BAT, publishers do not have to give up traditional ad exchanges. Bloggers can still place ads on their websites, YouTube stars can still monetize their videos using YouTube affiliate program.
However, remember that Brave browser has in-built adblock. It is turned on by default and most users will leave it that way. It means that when you receive BAT from Brave user, you are likely missing out on traditional ad revenue from this user, and vice versa. In the future, if Brave gets very popular, traditional ads will bring little to no revenue.
This means that in future it could make sense to disable the now-useless ads on the websites altogether, speeding them up significantly and improving the user experience. As for now though, Brave Rewards only complements, not substitutes traditional ads.
In order to sign up for Brave Rewards, follow the steps described here.
Many publishers have joined Brave Rewards already. Take a look at these graphs:
BAT for advertisers
Users do not want to watch traditional ads. They’re usually useless for readers/watchers, sometimes even annoying. As a result, many Internet users choose to install adblock or even use a browser with an adblock built-in.
As a result, traditional ads are becoming less and less lucrative for companies to use.
Brave takes a different approach. Users themselves are interested in watching ads, because they get compensated for it. As a result, advertisers should get better ROI.
Frequently asked questions
Is Basic Attention Token a good investment?
BAT is one of the few crypto projects which actually delivered on their promises. It is a fully functional ecosystem that will grow over time. Tens of thousands of creators have already signed up for Brave Rewards program.
It is up to you to decide whether you believe Brave Rewards will succeed. However, even now, it is already one of the most widely used cryptocurrencies in existence.
Is Basic Attention Token ERC-20-based?
Yes, it is.
How to earn Basic Attention Token?
There are two options:
- If you are an ordinary user, just download Brave browser and activate Brave Rewards. In Brave Rewards settings, you can configure how often do you see ads (more ads = more BAT earned).
- If you are a publisher, you can sign up your website or a channel on one of supported platforms (YouTube, Twitch, etc.). You will then receive BAT accordingly to the number of users watching/reading your content.
And yes, of course you can use both simultaneously!
How to buy Basic Attention Token?
Use a cryptocurrency exchange (here is our list of 10+ best crypto exchanges in 2019). If you want to purchase BAT with fiat, you will need to first buy BTC using a platform like LocalBitcoins. Then, you will have to exchange BTC for BAT on one of the exchanges.
How to mine Basic Attention Token?
Unlike Bitcoin, BAT cannot be mined. Its supply is fixed at 1 500 000 000 units. The only ways to acquire BAT are to earn it or buy it.
BAT is one of the most innovative and forward-thinking cryptocurrency projects. It has set an ambitious goal – to revolutionize digital ad industry – and is taking active steps to achieve it.
The end product is a system that is simple and easy-to-understand for users. What’s more, it should theoretically be more efficient than traditional ads for publishers and advertisers as well!
However, just like any crypto project, BAT has some drawbacks. It is still extremely centralized and still needs even wider adoption to unleash its full potential.
All in all, Brave team shows what cryptocurrencies are truly capable of and tries to create a better, more private future for Internet users.
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