This AMA with Brendan Eich (CEO) took place on December 20th, 2017 through BAT’s official Rocket Chat channel. Jennie, BAT’s Community Manager, took questions from the audience and relayed them to Brendan. The full transcript is below.
bat-jennie Admin 12:58 PM Hello everyone! Welcome to our first AMA here on the Basic Attention Token (BAT) Rocket Chat! Rocket Chat is one of our verified publishers, so if you’re participating in this AMA through your Brave browser, you’ll be seeing BAT’s utility in action.
For those tuning in, please feel free to ask your questions in the #ama-questions channel on Rocket Chat, which will be active for the duration of the AMA today. Please remember: this is a friendly environment; please be kind and be respectful of our guest and of one another! 🙂
This purpose of these AMAs is to provide a platform for members of the community to ask relevant questions directly to featured guests, and to satisfy any curiosities one may have about our guest’s thoughts, projects, plans and endeavors!
With that, I turn the floor over to our guest. Welcome, Brendan! Maybe you can start by giving a quick update on progress with BAT and Brave!
bat-brendaneich Admin 12:59 PM Thanks @bat-jennie.
As people know we’re deep into Mercury phase, with a few people working on Gemini (user-private ads, anonymous revenue share to user). We did the first batch of UGP grants last month and will do more in January. We’re working on creator referral awards, to pay YouTubers and site owners who bring new users to the platform as measured by 30 days uptime in Brave.
We had a successful pair of bizdev trips to NYC and London over last two months’ time, getting close to announcing an ongoing partnership with a top-3 NYC media co.
The tide is turning fast with publishers. Three years ago when I was thinking a lot about brave and studying problems in ad tech, I met with publishers and ad tech people in NYC. Some fear of ad blocking but mostly business as usual, even as programmatic plays launched in previous few years were hitting what now look like peaks (and trying to exit via M&A).
Two years ago I met as Brave founder and pubs were mostly “you’re an ad blocker, we hate you” but a few got the larger play. At that point I was thinking about Bravecoin and met with Stephan Tual and co. at Ethereum’s London office; helpful but also clear it was too early to do “Bravecoin”.
Last year publishers started turning, because their revenue was going down y-o-y, partly from ad blocking but also from G and FB eating the best programmatic ads and owning the user. This year the worm has turned, so to speak — no one discounts ad blocking and everyone is talking about GDPR + ePrivacy in Europe next year requiring consent for tracking, so with this as background I think we are well-positioned to move into Gemini phase of the BAT roadmap in 1H2018.
bat-jennie Admin 1:06 PM Wow, what an update! This is all very exciting news! I’m sure people are just dying to ask you their questions now! Let’s move onto those 🙂.
Our first question comes from Modernity from Rocket Chat:
Why use a separate cryptocurrency (BAT) instead of just using ETH or a more established cryptocurrency?
bat-brendaneich Admin 1:08 PM Thanks, @modernity — the answer is twofold: 1, to raise funds for the project (no shame in that); 2, to precreate the User Growth Pool before the sale to stake users with tokens, gratis. With ETH or other existing cryptocurrencies we would need a rich benefactor to endow the UGP and none were forthcoming. UGP+reserves wallet present notional value is $122M. I don’t know of anyone who was willing to give us that much ETH.
When I met with Ethereum folks in July 2015 and talked Bravecoin, I was inspired by “Social Credit” money theory. Give people tokens just for being citizens.
That’s the UGP.
bat-jennie Admin 1:10 PM @Robert.clark from Rocket Chat asks:
How do you envision the ‘moat’ of your startup being built? Is it about digging deep into the BAT reward system and creating truly better and more profitable ad experiences for the consumer as well as the advertiser, or more about the privacy focused / decentralized internet browsing experience?
bat-brendaneich Admin 1:13 PM Thanks @robert.clark — we aim to standardize what we can and hope to work with Apple and Mozilla in W3C on anti-tracking specs in new year, so that’s not the moat. The moat is attacking Google’s main revenue source directly, while using as much chromium code as possible.
That is a durable strategy as Google cannot diversify fast enough, and faces anti-competitive scrutiny in Europe that limits its ability to use MS-like tactics against us. If other browsers want to join in the platform, we will bring them on — after we have built Gemini phase and specified endpoint as well as on-chain rules.
In this light it is crucial we neutralize Chrome in every area where we do not differentiate by blocking by default. Note: blocking invisible trackers as well as all third party ads (and some 1st party that place with Google DFP), this gives 3-7x speedup on Android vs. Chrome, and Android Chrome has no extensions which means no adblockers.
Google’s “ad filter” is cosmetic and doesn’t touch trackers or the ads its core business and public stock price depends upon (they’d be bad fiduciaries if they did hurt their revenue materially; I’d join the class action suit!).
My view is G (and FB) are both “stuck”; they have limited ability to disrupt themselves, even ignoring usual big-company and innovator’s dilemma problems. When thinking about moats and strategy, I find Mr. Spock’s remark that “Military secrets are the most fleeting of all” helpful.
Tech alone isn’t a moat. Remember when Steve Jobs was rumored to be considering buying Dropbox? Then a bit later he said “that’s just a feature” (meaning OS icloud integration)? The durable strategies go against deep conflicts of interest, in Google’s case between Chrome users and G’s ad business.
Btw the latest on G’s ad filter makes me think they’ll get in legal and possibly antitrust trouble, the way they require verification. But we shall see!
bat-jennie Admin 1:18 PM @Irak from Rocket Chat asks:
Brave is an obvious buyout target for the major browsers and ad revenue companies. What do you believe would happen to BAT if a buyout occurs?
I can’t speculate much more, but I think BAT is safe — etherscan shows lots of addresses, last I looked, and volume is up. The UGP would be the asset to protect and as we bring on other apps to the BAT ecosystem, we will put it under shared governance.
For Brave and BAT, GDPR looks like the perfect storm along with bad privacy and dopamine-piracy complaints against the big two.
bat-jennie Admin 1:22 PM @Coke from Rocket Chat asks:
What are the Brave team’s top three priorities at the moment?
bat-brendaneich Admin 1:24 PM @Coke, thanks. The BAT ones are 1/ more UGP grants, with sybil attack resistance; 2/ creator referral awards; 3/ publisher onboarding (the top-3 nyc media co. and others). For Brave we have 1/ bug fixes; 2/ performance and memory work; 3/ extension support on laptop/desktop.
bat-jennie Admin 1:26 PM @Steve-1 from Rocket Chat asks:
What’s the likelihood of BAT transitioning to its own independent blockchain at some point?
Will BAT switch to an alternative Blockchain due to ETH scaling issues?
bat-brendaneich Admin 1:26 PM @steve-1 We have thought about this enough to view it as an option — no token or coin of value should ever be marooned unless the human element goes wrong. For now we are confident in Ethereum scaling but we’re keeping an eye (and will help if we can, as we grow).
bat-jennie Admin 1:27 PM @Decisive from Rocket Chat asks:
Is the UGP script locked in any way to prevent a mass sell off, or developer/publisher payout via the smart contract, or is it to the discretion of the BAT team?
bat-brendaneich Admin 1:28 PM Hi @decisive: Currently locked in a wallet with keys held only by trusted/high-integrity founder-level people.
We don’t like fancy smart contracts; I’m skeptical of on-chain governance as right move for upgrading contracts; we’re keeping it simple and vetting keyholders who are known and deeply invested in Brave.
Only a few such people; I am one.
bat-jennie Admin 1:30 PM A user from Reddit asks:
How is the BAT browser extension planned or being developed?
You have mentioned in the past that he heard Mozilla might be interested in integrating Brave into Firefox. Have there been any updates on that front?
bat-brendaneich Admin 1:31 PM First question may be about the idea of a BAT extension for other browsers, but that is premature. The big problem with UGP grants and Gemini-phase ad revenue shares to users is fraud. Just user-funded contributions has a fraud problem too: as with buy widgets, stolen CC identity => $20 charge to buy BAT => contribution at scale via sybils/mturk-users/bots-with-enough-work => settlement to colluding but verified (small blog) publisher. That’s why I mentioned sybil-resistance above.
So we can’t just make a wish and try monitoring Basic Attention Metrics from an extension, and attributing BAT flows and creating user wallets, from extensions. There can be other problems, which I’ve noted elsewhere: lack of extension APIs to do all we do for the BAT platform to work (block ads/trackers, HTTPS Everywhere, Fingerprinting Protection, BAM and the ledger), extensions run in JS sandboxes with API limits.
So to put first things first, we will build in Brave while keeping our code as separable from chromium (or the mobile webview on iOS) as possible. After we have those endpoing and on-chain specs I mentioned in pretty good shape, we can assess extension feasibility.
On Mozilla, I can’t speak for them. The friend who contacted after the BAT sale signaled interest but said it would take time, to which I said “same here” (per roadmap). I hope that answers the two reddit questions.
bat-jennie Admin 1:35 PM @badgamer5000 from Rocket Chat asks:
I’ve worked in the industry on both the publisher and advertiser side. Conceptually the model is fantastic. Cut out the costly middlemen, better rewards the publisher and the user.
I’m struggling to see how online advertising moves into a permission-based model. Isn’t there great risk of a sharp drop in available inventory for both publishers and advertisers?
How do you see this transition period work? Maybe sites use a hybrid during this time?
TLDR – How do you avoid short-term pain for publishers – who are already struggling massively – as they transition to BAT? Especially if Brave market share as a browser increases faster than people think.
bat-brendaneich Admin 1:35 PM @badgamer5000 I thought about that for over a year before founding Brave, so good q.
Publishers already face ad blocking cohort of size. E.g. I’ve heard from CN that Wired and Pitchfork see 30% ad blocker cohort tempting to try to turn around, as Page Fair, Sourcepoint and others wanted to have a go at a couple years ago: 3/7 is ~43% lift if you can convert all those users, but you can’t.
Any on tech sites use a strong ad/tracking blocker such as uBO (which we admire and collab with where we can). They don’t react well to hostile dialogs to “whitelist, subscribe, or get lost”. Every site that tries that loses Alexa share, lol.
So the pitch from us to pubishers is: you lost a large and valuable fraction of your readers — we can win some back to a paying relationship, pure upside. Make it a positive sum game.
On the ad side, we see such garbage, race to bottom, spray-and-pray deals that we don’t worry about getting top brands and agencies doing trials next year; we are warming them up rn. The idea of user-private, low frequency (one a day), long-form/high-CPX video+landing page, personalized ads is strong.
The local machine learning users get when they consent to the BAT ads can see everything: search queries, Amazon queries and consummations, click logs/tab constellations, absolute above the fold and Z-order visibility and viewability. All together we hope this can notice great opportunities for advertiser and user.
E.g. you are shopping for a car, have not quite decided, have tabs open on BMW and Mercedes. You’ve even set a BMW dealer visit up for 1pm Saturday. Mercedes will pay ~$70 gross for a lead that will take a test drive at their home two hours ahead; 11am Sat we will give the user 70% = $49 in BAT.
This is kind of a best-case and we haven’t locked this deal down, so take it as a for-instance. But I’m not worried about getting ad trials, and moving to paying deals as we tune the local machine learning agent.
bat-jennie Admin 1:42 PM A user from Reddit asks:
We know that earning BAT isn’t supposed to constitute a full income, but how much money can a user realistically expect to earn per month watching ads?
bat-brendaneich Admin 1:45 PM I don’t know. If you assumed every user could get a fixed piece of the ~$80B ad spend on digital in US this year, you might see $80B / 250M (people of age to act on ads) x .2 (programmatic share outside G/FB) x .15 = $9.60 per person year. But that is way low for our users, and take it as a lower bound.
Brave’s principles are: 1/ consent-based always (user, and publisher if they want to participate); 2/ no tracking data in clear off device to any servers; 3/ revenue share to inventory owner (ad slot owner; “inventory” on “supply side” means ad space) should be 70% (industry standard); 4/ as much or more rev share to user as to Brave, to align interests.
So for user private ads, we will give 70% to user via BAT. If we do programmatic ad slots with pub as partner (recovering some of that revenue lost to ad blocking; positive sum game) we will give pub 70% and 15% to user, 15 to us.
So suppose our users are more valuable than average (early adopters, web and tech and even crypto savvy); take that $320/person-year figure from above ($80B/250Mppl). 70% of 320 is $224. That is a notional upper bound.
My BMW vs. Mercedes lead gen example suggests higher outliers but you don’t by a new car every month, lol. Still, attention has not been fairly priced by deep/transparent markets. Let’s find out how much users could make. I hope this helps.
bat-jennie Admin 1:49 PM @Tyler from Rocket Chat asks:
What was your reaction to the UGP being claimed so quickly?
bat-brendaneich Admin 1:49 PM Thanks, @tyler. I expected it to go fast and it suggests both high interest, and growth opportunity — esp. as we add creator rewards for referring users who stick around 30 days.
bat-jennie Admin 1:50 PM A user from Reddit asks:
How does the BAT system differ from Patreon?
bat-brendaneich Admin 1:53 PM Great q, anonymous Reddit person! 1/ we are a user agent so work with any verified creator, whether they sign up with another site or not; 2/ we don’t censor first parties (whether sites, accounts on YouTube, Twitch, etc.,) as a browser, beyond things like antiphishing/antimalware protection that all browsers use — if you can verify you own the payable resource (domain name, account) by challenge/response and/or OAuth APIs, you get verified and your fans can support you.
There are still censor risks in (2) at the moment, of course. DNS registrars, account systems, even Brave so we will move toward decentralized and anonymous operation over time — that is the Apollo phase of the roadmap.
bat-jennie Admin 1:54 PM @Jscrypto89 from Rocket Chat asks:
Will there be function to donate/tip creator on the spot instead of waiting for the monthly payment?
bat-brendaneich Admin 1:55 PM @jscrypto89 That is timely, as our team thinks the ANONIZE2 protocol we use may support such spot contributions without loss of anonymity.
The other challenge there is blockchain scaling, of course. With Bitcoin in the beta test, and with BAT on Ethereum now, the fees can add up. We’re looking at this but the best anonymity and fee amortization is via the 30-days-of-uptime, private-on-device ledger reconciliation => settlement process.
bat-jennie Admin 1:56 PM @Frosty from Rocket Chat asks:
What is the most interesting thing you’ve encountered so far, and how has it affected your direction?
bat-brendaneich Admin 1:58 PM @frosty i have to say that learning about tokens (from GNT on, as ERC20 was standardized) and realizing I could do “Bravecoin” without having to set up a new blockchain, that was huge (obv. in terms of the token sale but also the UGP).
Another interesting win was ANONIZE, created by CS profs who wanted to anonymize their class surveys. We were looking at randomized response and other techniques in 2015, but ZKP won. We look forward to the evolution of blockchains (zCash already has them; Ethereum hot topic) to absorb this area of research and put it into practice for everyone (ZKP = Zero Knowledge Proof).
bat-jennie Admin 2:00 PM @apertus from Rochet Chat asks:
When will BAT be implemented on mobile browsers specifically Android /iOS?
bat-brendaneich Admin 2:02 PM Thanks @apertus, and yes: Android ledger/BAT support is hot 1Q2018 initiative and we shall see about iOS. We have good relations with Apple and do not want to have a bad rejected-app day, so stay tuned.
bat-jennie Admin 2:02 PM @badger from Rocket Chat asks:
How does the BAT team plan to engage with and foster ease of use for non-technical user audiences?
bat-brendaneich Admin 2:04 PM @badger Great question, and we have been a bit short-staffed before 2nd half of this year to answer it well. All new browsers start from what E. von Hippel calls lead users, those who switch browsers fastest and even innovate on web stuff (as web devs, back end pros, power users, etc.). Even for a small-share browser appealing to lead users, we need to smooth out more UX and support more chromium extensions, and we will move fast to do so in 1H2018.
For the non-tech users we aim to keep the defaults right and relieve them from having to learn about crypto. Rn funding the user wallet requires crypto — but we want to make it easy to use a debit or credit card to do small monthly budget out of goodwill (people do $5-20/month).
With UGP grants and then BAT ads, we really want the more average-at-scale/non-lead user, every user really, to have the option to let their wallet self-fund via UGP up front and then recurring BAT ad revenue and let it drain to their pinned and automatically-designated-by-BAM creators and sites.
That’s the steady state we think has simplest user model, no crypto in most users faces unless they want it, etc.
bat-jennie Admin 2:07 PM Thank you so much for all of the thoughtful answers, Brendan! To our dear viewers, we are just about to wrap up today’s AMA! But before we do… Brendan, we have one last question for you:
Burnerman from Rocket Chat would like to know:
What color should my lambo be black like Batman or purple like a rapper? 😉 🚘
bat-brendaneich Admin 2:08 PM Black like Batman, of course 👍.
Thanks @bat-jennie and everyone! :dancing-penguin:
bat-jennie Admin 2:09 PM Thank you so much to everybody that tuned in for today’s AMA! Brendan, it has been an honor having you on! 🙂
We apologize if we didn’t get around to your question today, but stay tuned for more AMAS in 2018! You can find more information about the BAT project here:
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