Market Mad House

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Basic Attention Token (BAT) is it the first successful Utility Token?

The Basic Attention Token (BAT) is the most successful, and highest profile, Ethereum utility token, but what gives BAT its value?

For instance, BAT is the only Ethereum utility token that America’s most popular cryptocurrency wallet Coinbase lists. In addition, CoinmarketCap gave the Basic Attention Token a Market Capitalization of $249.886 million and a 24-Hour Market Volume of $16.291 million on 25 March 2019.

However, the BAT had a Coin Price of just 20.1₵ on the same day. In addition, the BAT is CoinMarket Cap’s 25th most popular token. Interestingly, BAT’s Market Cap is less than such questionable coins as Ontology (ONT) and Monero (XMR) in CoinMarketCap’s rankings.

However, there is a lot of interest in the Basic Attention Token (BAT). For instance, there was a Circulating Supply of 1.244 million BAT and a Total Supply of 1.5 million BAT on 25 March 2019.

Plus the BAT is part of the popular liquidity networks run by Bancor and the Nuo.Network. To explain, liquidity networks make it easy to borrow against tokens enabling margin trading and fast conversion. Hence, BAT tokens are very popular with speculators and trade on many exchanges.

What is the Basic Attention Token (BAT)?

Despite its popularity, the Basic Attention Token is not a cryptocurrency. Instead, the BAT is an Ethereum Request for Comment (ERC20) utility token.

In detail, they design cryptocurrencies like Bitcoin (BTC) and Dash (DASH) as money. In contrast, creators intend ERC20 utility tokens as units of measurement for goods or services sold through blockchain platforms. For example, BATs represent digital advertising and digital advertising viewers.

Hence, they design the BAT to facilitate transactions on an Ethereum blockchain platform. Specifically, the designers hope the BAT will power a marketplace for blockchain-based digital advertising.

Thus, the BAT is really an accounting and bookkeeping tool designed to enhance transparency and ensure accountability on a blockchain platform. Therefore, any monetary value BAT acquires is an unintended side effect of the primary mission.

Unfortunately, the details of the BAT/Brave advertising market are not available. Instead, the team behind Brave is apparently still developing that marketplace. However, there is a need for a marketplace that can fix digital advertising.

How BAT could clean up Digital Advertising

BAT’s creators hope to clean up digital advertising by replacing the current corrupt system with a simple, and transparent marketplace.

That marketplace has three components, an Ethereum platform, the Brave browser, and the BAT. Simply put, Brave browser users will sell data to digital advertisers who will pay users in BAT.

The hope is that users will only see the advertisements they care about and advertisers will connect directly with consumers that care about their products. Specifically, the hope is Brave browser users will pay extra for internet searches without tracking.

To explain, normal search engines like Alphabet’s (NASDAQ: GOOG) Google make money selling search results to advertisers. However, this system is full of fraud and chicanery.

Can the Basic Attention Token Fix Digital Advertising?

The Brave creators plan to change that by giving users control of the searches. For instance, you will determine who sees your research results when you use Brave.

Moreover, they hope to encourage people to participate by paying them to look at advertising. Thus, Brave’s creators hope to change advertising from pay for crowds to pay for play.

The theory is that advertisers will pay extra for high-quality viewers more likely to look at their ads. In addition, advertisers will be less likely to get ripped off with fraudulent results in the Brave/BAT ecosystem.

Notably, some advertisers like Procter & Gamble (NYSE: PG) Chief Marketing Officer Marc Pritchard believe much of digital advertising is fraudulent. Significantly, Procter & Gamble cut its digital ad budget by $200 million in 2018 after Pritchard blasted 50% of digital advertising as a scam, Adweek reports.

Pritchard’s frustration is that most digital advertising is unverified. The Basic Attention Token is an attempt to fix that by making it possible to verify digital advertising views.

Is there a Market for the BAT?

Under these circumstances, there could be a big market for BAT because advertisers are looking for alternatives to a broken digital advertising system. Moreover, advertisers are seeking alternatives because heritage media like broadcast and cable television and newspapers are dying fast.

Surprisingly, there is a huge market for digital advertising despite its problems. In fact, digital advertising spending will overtake traditional advertising spending in 2019, Mogo Interactive claims.

Notably, Mogo projects US digital ad spending to grow by 19.1% to $129.34 billion in 2019. Hence, digital advertising spending will make 54.2% of all of advertising spending in the United States. Moreover, traditional advertising spending will fall to 45.8%.

Hence, the BAT could be the right product at the right time if it finds an audience. So, theoretically there is a market for the Basic Attention Token.

Will Brave and BAT make money?

Instead of advertisers paying for ads on the Brave browser. The advertisers will pay consumers BAT to look at the ads. The hope is that browsers will pay extra for a higher quality experience with less advertising.

On the other hand, I expect they will have a difficult time getting consumers to pay for advertising. In particular, you can use the Brave browser and avoid advertising for free.

Note: the Brave browser works great, I have been using it for a while and enjoy the experience. However, the quality and performance of Brave seem little better than Opera. Yet, the ad blocker works.

Can Big Social Media Monetize Brave and the BAT

Notably, the BAT is integrating with some potentially lucrative social media platforms.

For instance, Basic Attention Tokens could work with the WeChat Official account, the BAT Frequently Asked Questions reveals. Importantly, WeChat is the fifth most popular social network in the world with 1.083 billion users in January 2019, Statista calculates.

Plus, Chinese digital media giant Tencent Holdings (OTC: TCEHY) owns WeChat. Moreover, WeChat’s Payment solution WeChatPay is one of the most popular mobile wallets in the world with 800 million users in March 2018, Expanded Ramblings notes.

In addition to WeChat, BAT claims its ecosystem will integrate with the well-respected encrypted messaging system Telegram at some point. Telegram has only around 200 million users, Statista calculates but it is popular with serious techies and affluent and well-educated users. In addition, Telegram is exploring the possibility of launching its own cryptocurrency.

Is BAT the Future of Facebook?

Thus, the BAT platform has the potential to reach a mass audience through social media. Under these circumstances, Facebook (NASDAQ: FB) could be a huge opportunity for the BAT.

“The future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure and their messages and content won’t stick around forever,” Mark Zuckerberg says in a Facebook post. “This is the future I hope we will help bring about.”

In fact, Zuckerberg believes Facebook’s future is encryption, privacy and and messaging, VentureBeat reports. To clarify, Zuckerberg thinks encrypted messaging and data transmission will become Facebook’s main business in a few years.

In addition, BAT could help Facebook monetize its hugely popular encrypted messenger WhatsApp and Facebook Messenger. Something like BAT could monetize WhatsApp by creating an ecosystem for WhatsApp advertising. For instance, advertisers could pay to reach certain WhatsApp users.

Notably, WhatsApp had 1.5 billion users and Facebook had 1.3 billion users worldwide in January 2019, Statista estimates. In addition, another Facebook product, Instagram had one billion users in January 2019.

Thus, social media like Facebook and WeChat could help BAT reach a mass market. Specifically, they can add the Browser to WeChat, Facebook, Telegram, WhatsApp, or Instagram to create a combination search engine/instant messaging app. On the other hand, there is no evidence of any relationship between BAT and Facebook.

In the final analysis, the BAT has a lot of theoretical value. However, it could be years before the BAT ecosystem makes any money. Thus, the Basic Attention Token will remain an interesting speculative investment for the foreseeable future.

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