Thread by @antoniogm

The Basic Attention Token (BAT) is @brave's crypto solution for online ads.

I think it's mostly wrong, but wrong in interesting ways worth discussing (and which reflect common misconceptions about the ad tech world).

Anyone want to steelman it?

basicattentiontoken.org

@brave For starters, they diagnose 'inefficiency' as one of the problems of digital advertising: the 'wrong' players (GOOG, FB) are winning, and the 'good guys' (NYT, media) are losing.

That's the exact opposite of what happened.

Media becoming *more* efficient--i.e., not being forced to pay NYT's outrageous $10 CPM or whatever--is what killed many media companies. While indeed there's spend lost to middlemen, it's hard to claim inefficiency is what characterizes ad tech vs. the old world of 'rate cards'.

Their proposed solution is doing a bit of modeling around human attention, and just paying publishers as a function of some function of user watch time.

There's already a price discovery mechanism for human attention....it's the very auction-driven ad tech they're rejecting.

There is no way to efficiently value billions of users' individual attentions. It would be like the Soviets centrally pricing thousands of commodities in their planned economy, with results that would match that approach.

Attention value varies markedly. This is insanity.

Part of their issue (and this is a common belief, and why I'm critiquing them....not because I dislike Brave, I don't), is that they indulge in the 'data is the new oil' fallacy, one of the most pernicious pieces of unreason planted in the discourse by the commentariat.

Data, as regards advertising, *is nothing like oil*.

It is not fungible...in fact, it's the most non-fungible and individualistic thing on earth (there's only 3B+ different types..as many as there are users!).

Also, most is worthless from the ads POV.

wired.com/story/no-data-…

So all these proposals (which seem popular in web3) of 'paying' users for their data are fundamentally confused: most users won't get paid much at all. Sure the FB ARPU is high, but only a fraction of that comes from data. Your ARPU doesn't go to $0 when you hit the ads opt-out.

Also, whose data here? Users seem to think that all the data they generate is theirs. Hate to break it to you, but that's not how it works. Try to go to Amazon (or your dry cleaners) and demand that all your personal buying data be deleted. You don't have that right.

Never mind further complications around lots of different types of data going into ads targeting and optimization. Fun fact: most of the data used in 'hyper-targeting' on FB comes from...outside FB!

So who's paying you, the advertiser or FB? Someone else? How's this work again?

Lastly, there's fraud. Brave correctly cites fraud as a major problem in the current ads world, with things structured in such a way that almost nobody is incentivized with fixing it (except for advertisers, who have the least control over ad-serving or the user-facing side).

Now imagine going and paying rando users for supposedly paying attention to this or that web3 app. You've just increased your fraudster pool by 10x, as everyone builds a bot. Every app will have to have aggressive captchas on every UI. It'll bog things down into unusability.

Much of this thinking stems from a fundamental bias against ads, thinking them as evil at worst, or just obnoxious at best. An ideal world, in this thinking, is an ads-less world. If we just improved micro-payments, or modeled attention better, we could banish this evil.

In actual fact, ads pay for *a lot* of the Internet. Yes, many creatives will make bank avoiding middlemen and selling to their fans directly. We're already seeing that with (say) Substack.

But look at the long-tail of creatives who can make it there. It's a small set.

Much of the explosion of creativity from the Internet comes from small creatives (or just amateurs) who will never turn pro and make a living off what they create. You need to have apps and networks where the service is functionally free, both for consumers and producers.

All that said, I think Brave's pioneering on-device approach to privacy is absolutely correct (and the direction the industry is going). At this point BAT seems a bet on their success more than an ads model (and heck, it's still at $2B in market cap).