This article is part of our series “Blockchain beyond Bitcoin“. Bitcoin is the beginning, but it’s far from the end. To help you wrap your head around why, we’re taking a deep dive into the world of blockchain. In this series, we’ll go beyond cryptocurrency and hone in on blockchain applications that could reshape medical records, voting machines, video games, and more.
Online ads are a special kind of terrible. They’re invasive, they’re distracting, and worst of all — they’re necessary.
Despite the fact they’re almost universally hated, ads are what make the World Wide Web go round. They’re a vital part of the internet ecosystem, and without them, many of the blogs, websites, and Youtube channels that you enjoy wouldn’t generate enough revenue to stay afloat. In fact, if not for ads, you wouldn’t be reading this article right now.
But there’s a problem. Our current online advertising system — a pillar of the internet as we know it — is rotting from the inside out. It’s ruining the internet, and it desperately needs to be fixed.
The Problem(s) with Ads
In the internet’s early days, web users only had to deal with the occasional banner every now and then. Today, ads are everywhere, all the time. We have banner ads, wallpaper ads, search ads, interstitial ads, video ads, pop-up ads, email ads, newsfeed ads — and much, much more. To make matters worse, advertisements are no longer confined to our web browsers. They appear on most internet-connected mobile games and applications as well.
In addition to being inundated with ads everywhere we go, we’re also being tracked. Most websites use third-party trackers to monitor your activity in a wide variety of ways and use that data to build up a unique “fingerprint” that can be used to identify you regardless of where you go on the web, and regardless of what device you browse on. Right now, as you read this article, there’s likely around 40 different trackers watching what you do and harvesting data about your activity. This isn’t unusual, either. In fact, it’s the norm.
Worst of all? You’re paying for this to happen. Every targeted advertisement you see on your smartphone is likely bounced through a variety of ad exchange networks, buy- and sell-side servers, placement verification services, and data management platforms, before reaching your device. These data transfers do more than make pages load slower — they also eat into your data plan and drain your battery. It typically costs you just a fraction of a cent per ad, but those fractions add up.
A report from the New York Times found that 50 percent of mobile data transferred during visits to popular news websites was a result of ads. Depending on the cost of your mobile data plan, that means you could be paying up to $23 per month just to see ads you never asked for.
Blockchain to the rescue
If there’s anyone who can help fix this problem, it’s Brendan Eich, the founder of Mozilla and creator of JavaScript. Eich has spent the last three years developing an alternative to our fraud-ridden, inefficient, and user-hostile online ad system. He and his team describe it as a “decentralized, transparent digital ad exchange based on blockchain.”
Don’t worry — it’s not as nebulous or confusing as it sounds.
Broadly speaking, Eich’s solution is an attempt to wipe the slate clean and put a better system in place — one where you aren’t assaulted with ads, and where the lion’s share of the money spent by advertisers doesn’t fall into the hands of middlemen.
The system is made up of two main parts, the first of which is a new browser called Brave. In Eich’s own words, Brave is “a privacy focused browser that puts users first and blocks third-party ads and trackers by default.” That means you receive not just a clean, ad-free, and fast browsing experience, but also that your privacy isn’t compromised by an onslaught of tracking bugs and cookies.
It’s true that you could achieve a similar result in Chrome or Firefox by installing a handful of extensions, but Brave does both ad blocking and tracker blocking simultaneously — and at all times — from the moment you fire it up. It also keeps nifty stats on the number of ads you’ve blocked over time, and how much time you’ve saved because of faster, tracker-free page loads.
So how is anyone paid if ads are blocked by default? Glad you asked. That’s where the second component of Eich’s system comes in.
The Brave browser is powered by a blockchain-based unit of account called the Basic Attention Token (BAT). In the words of its creators, BAT is “a new token that can be exchanged between publishers, advertisers, and users. It all happens on the Ethereum blockchain. The token can be used to obtain a variety of advertising and attention-based services on the Brave platform. The utility of the token is based on user attention, which simply means a person’s focused mental engagement.”
BAT isn’t a currency. It can be exchanged between two parties just like currency, but it’s more than a store of value. BAT can be used as a unit of account between advertisers, publishers, and users on the BAT platform, and can be utilized to directly measure, exchange, and verify attention. As Eich explains “a cryptocurrency like Bitcoin would not enable this kind of distinct, in-platform problem solving.”
Put simply, BAT not only allows you to literally pay attention to websites, but also get paid for your attention. Or at least it will, in the not-so-distant future.
Growing pains
Eich’s blockchain-based ad exchange system is still under construction. He and his team are rolling it out in phases, and right now they’re in phase two of three. Phase one was the Brave browser, phase two was Basic Attention Token, and phase three involves reintroducing ads that users are paid to view — but we’ll get into that last part in a moment.
Right now, in its not-quite-completed state, Brave works like a weird version of Netflix that runs on the honor system. You don’t have to pay to use it. You can fire it up and watch all the movies you want completely for free, without ever being interrupted by a commercial. But if you do decide to pay for the service, your money doesn’t go to Netflix — at least not all of it. Instead, 70 percent of your donation is divvied up and passed out to the producers of the movies and shows you watch the most over the next 30 days.
That’s basically how Brave works right now. You aren’t required to pay anything to use the browser, but if you do, your money is converted to BAT and doled out to all the publisher websites you visit in the form of automatic micropayments.
Eich believes this an alternative to existing subscriptions, like those offered by the New York Times, NewScientist, and others. “Asking people to turn over their credit card to every site that you might read a few articles from is not reasonable,” he argues. “A lot of times, the paywalls want $250 a year or something. That’s not reasonable. […] This way, if you have funds in your Brave user wallet you will be monitoring (over 30 minutes of personal uptime, privately on your device, without sending information to anybody, not even Brave) what sites you go to, and then rewarding them automatically.”
BAT not only allows you to literally pay attention to websites, but also get paid for your attention.
Brave’s creators know that only a small percentage of users will opt in to this voluntary payment system. “We don’t expect most people to do this,” Eich admitted. To supplement the system, Brave also introduced a stimulus package in 2017 to incentivize early adoption and coax new users onto the platform. After Basic Attention Token’s explosive ICO (which raised over $35 million in 30 seconds), Brave set 300 million BAT aside for the “user growth pool.”
“We created 300 million BAT,” Eich continues, “that we can then use to give to users to put change in their pocket from the get-go, which they can use to reward creators who refer new users to us. If those new users browse for 30 days with us, then that automatically causes the U.S. equivalent of five dollars in Basic Attention Tokens to go to the creator who referred them.”
The plan seems to be working. Brave now boasts about 2 million active daily users, and it’s getting bigger every day. But to truly disrupt the current ad-based internet model and supplant it with a newer, fairer, blockchain-based ad exchange, Brave needs to roll out the rest of the platform.
Reintroducing ads: the last piece of the puzzle
The next piece of the puzzle is reintroducing ads in a more controlled, efficient, and private manner than what currently exists on the internet.
Brave will soon let you opt in to seeing a small number of advertisements, which will appear in either a private tab, or an in-browser notification. Brave plans to allow some ads on publisher pages, but the first rollout will be user-private ads. It’s important to note, though, that these ads will not be “targeted” in the same way that current online ads are.
“Instead of sending out tracking signals to allow advertisers to buy access to your attention, we bring an objective catalogue — one per region and natural language that you live in — to your machine,” Eich explains. “It doesn’t fingerprint you to download the catalogue. […] When you opt-in to this — it’s consent-based, and not on by default — you will get one private ad per day, in a tab, at the right time and place.”
Any ads that you choose to allow in Brave will still be relevant to you — they just won’t rely on fingerprinting and tracking services to stalk you and figure out what you might be interested in buying. It’s a completely different system. The best part? Thanks to Brave and BAT, you’ll get paid for the ads you pay attention to. In the case of user-private ads loaded in a separate browser tab, you’d get 70 percent of what the advertiser spent to serve that ad to you, while Brave takes the remaining 30.
BAT has the potential to fundamentally change how you use the internet.
Eventually, Brave plans to let publishers sell ad space as well. “If publishers want to do ads in their space that we block,” Eich explains, “with their consent, and with the user’s consent, we will give 15 percent to the user, we’ll take 15 percent, and we’ll give 70 percent to the publisher. We’ll always give 70 to the owner of the ad space — be that the user or the publisher — if they’re willing to do a deal with us.”
Later, when the platform is finished, Brave will let you “cash out” and convert BAT into dollars, bitcoins, or any other currency. By default, though, the Brave Payments system is built to take a user-specified amount from your wallet and redistribute it to the websites you visit most over the next 30 days — thus completing the cycle from advertiser to user to publisher, and helping the system go, as Eich puts it, “steady state.”
Once Brave is complete, it will provide an alternative path through which you can explore the internet. One where you can wander freely, without being tracked, without being bombarded with ads, and without screwing over publishers by blocking the ads that bring them revenue.
A Brave New World
Will this new system disrupt the current digital advertising model and replace it with a blockchain-based online utopia? Will Google Chrome become the new Internet Explorer and be banished to the sideline as everyone jumps headfirst onto the Brave bandwagon?
Probably not — at least not any time soon. In fact, that’s not even Eich’s main goal. As the co-creator of Firefox and a decorated veteran of the browser wars, he isn’t interested in unseating Google Chrome to become king of Browser Mountain.
“I don’t want to corner the browser market,” he explains. “I think Brave will have a good growth curve and lots of market share among elite users who are very economically valuable, but BAT is the big play. I want the Basic Attention Token to be used widely, which means we will bring it to other browsers and other attention apps — things like podcast players, or games that have ads in them.”
Eich’s grand plan is to eventually release an open-source SDK for Basic Attention Token, which will allow developers to not only build new applications that run on attention, but also integrate BAT into existing apps.
Think of it like an exotic new engine technology. If it runs, this engine could revolutionize more than just automobiles. It could power boats, motorcycles, and supersonic jets as well. No matter what your preferred mode of transportation may be, BAT has the potential to fundamentally change how you cruise down the information superhighway we call the internet. It just needs a bit of a kickstart first.
“Nobody knows what the future holds,” says Eich, “but if we prove this model, it should lead to future web standards. And I think that in the future you should be in charge of your data.”
