What is Basic Attention Token (BAT)?

TL;DR

The Basic Attention Token (BAT) is the token that powers the advertising economy of the Brave Browser. Instead of relying on third-party data aggregators like Google which track users’ browsing activity to effectively target them with ads, Brave utilizes the privacy capabilities of blockchain technology to anonymously collect ad preferences and reward people with BAT for their engagement. 

The Basic Attention Token (BAT) was designed to take advantage of the capabilities of blockchain technology to present a new economic model for the advertising industry. The idea is that instead of websites making all the money from running advertisements, users can also get paid simply by noticing and clicking the ads.

This unique feature is one of which is already available just by downloading the Brave browser and turning on the Brave Rewards feature. After that, the meter already starts ticking away and the browser’s built-in wallet starts computing the BAT rewards the user can get at the end of the month for all the ads that one chooses to view. 

Built on top of Chromium (the same open-source engine that runs Google Chrome) the Brave browser seeks to address what the BAT whitepaper terms as a “broken” digital advertising industry. While publishers and advertisers directly marketed to people in the past, the system nowadays is dominated by “middlemen”, like Google or Facebook.

Brave wants to turn the advertising industry completely on its head. More importantly, it wants to decentralize the attention economy by addressing major data privacy issues, as well as putting a premium on quality content and user experience.

The Basic Attention Token is an ERC-20 standard on the Ethereum blockchain and has the following utilities:

• BAT is used to compensate for the time a user spends viewing an advertisement on the Brave browser, which appears as notifications from time to time based on the user’s settings. Viewing the ads are opt-in, as users can choose to turn off the Braves Ad reward feature completely or to view the ads at a later time. According to the whitepaper, the amount of BAT earned is computed relative to the frequency and duration of the engagement, as well as with the overall revenue generated by the ad, divided among all the users who viewed it.  
• BAT is also used to reward publishers and content creators for the amount of user traffic they generate towards the ads, providing an incentive to create engaging content and improve overall browsing experience.
• BAT can also be used for tipping, allowing users to directly connect and support their favorite blog sites, channels and other media. 
• BAT can also be used to redeem digital goods and enter prize competitions on partner websites such as tapnetwork.io. 

Unlike websites that use cookies and data aggregators to track and collect your viewing behavior to sell to advertisers, the Brave ledger system runs on a zero-knowledge proof algorithm to come up with recommendations for the right ads to the right people without compromising user privacy. 

Zero-knowledge proof is basically a means for two or more parties “to arrive at an agreement” without revealing anything about each other and which is only made possible through blockchain technology. 

Simply put, the Brave browser “learns” your viewing behavior and ad preferences, but instead of sending your information to be stored in a data center, the browser keeps it to itself and uses its blockchain backend to anonymously request for relevant ads to be channeled back to you. That way, advertisers are assured of accurate audience targeting while users can rest easy that none of their data leaks to the outside world.

This mechanism is what allows for revenue to be directed to users. Instead of an advertisers’ budget being spent on fees for the middlemen, agencies, ad exchanges and networks fees—it's the users themselves who are entitled to earn for their participation. In fact, as much as 70% of the advertising fees goes to Brave users in the form of BAT, while the rest is kept by Brave for further development.

From the users’ perspective, the Brave browser also has another welcome benefit of being faster than other mainstream browsers since it blocks cookies, trackers and other background processes that use up bandwidth and processing power. Loading time is three times faster than Chrome (according to the official Brave website). This also translates to less data consumption and longer battery life on devices.

Web pages and even social media feeds also look much cleaner when viewed on Brave, leaving more room to focus on the actual content you were after.

As for the Brave wallet, the built-in feature is being touted as a secure alternative to other wallets that require downloading third-party browser extensions which are more prone to phishing attacks and fake versions. Being built-in, the wallet is already ready to use upon installing the browser.  Withdrawing your BAT balance however, requires verifying your wallet with a custodial partner such as Gemini or Uphold. 

BAT’s creator, Brendan Eich, certainly has an impressive resume.  Aside from co-founding Mozilla, he also wrote the code for JavaScript—one of the core languages for multimedia functions on the Internet. 

BAT was launched in 2017 and has since then grown to a healthy community of over 50 million users. Over 5000 advertising campaigns have been launched on Brave from over 200 countries, including many corporate giants such as Amazon, American Express, Ford, Intel, Mastercard, Paypal and Toyota to name a few. Among the mainstream cryptocurrency outfits, Binance, Coinbase, Crypto.com, eToro, Gemini, and Solana have also signed up to be advertising partners.

To address network congestion on the Ethereum mainnet, cross-chain support with the Binance Smart Chain (BSC) was established in 2021. Currently, BAT also supports wallets on Avalanche, Polygon, Gnosis Chain, and Solana. 

Brave has recently partnered with Splinterlands, Gala Games and Ether.Cards to bring gaming and NFT utility to BAT. 

All of the 1.5 billion maximum supply of BAT are already in circulation. No new tokens are expected to be created, making the supply deflationary. 

The Brave network’s novel take on advertising is for many BAT advocates and supporters, arguably the best model we have so far that is designed to benefit everyone involved—advertisers, content creators and even ordinary users.

It’s also a solid step towards defining user experience for the emerging Web 3.0 landscape, which is why BAT and the Brave browser have won the hearts of those who are aspiring for a more decentralized future. 

With a steady growing user base and more and more partners signing up globally, BAT seems securely on the path for future uptrends. 

[Note: As of January 2022, connecting a custodial wallet to Brave Rewards have currently been disabled in the Philippines and Vietnam due to fraudulent user activities. No announcement yet has been made on when this measure will be lifted.]

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DISCLAIMER: The statements in this article do not constitute financial advice. PDAX does not guarantee the technical and financial integrity of the digital asset and its ecosystem. Any and all trading involving the digital asset is subject to the user’s risk and discretion and must be done after adequate and in-depth research and analysis.