Brave, with the Basic Attention Token (BAT), is building exactly the client-side anonymous contribution + ad-matching system you describe. We will take BAT to other apps after proving the model in Brave.
BAT in Brave is opt-in -- each user consents before anything local happens with data or zero-knowledge/blind-token attestations -- and users can get _gratis_ BAT grants right now using the stable desktop browser (this is coming to mobile in about a month). The anonymous contribution system is the basis for the also-opt-in Brave Ads system, which uses local data only, local machine learning agent, and no cookies or user tracking by any server (even ours). Ads match against a catalog fixed daily or less frequently for a large set of users in a region who speak the same language. Attribution and confirmation use Chaumian blind tokens.
Users get 70% of revenue for opt-in, user-private (in tab), high quality ads at user-configurable frequency. We are working with publishers to provide user-opt-in ads for sites too, 70% revenue to the publisher, 15% to the user. User ad trial is under way right now, ping me if you want to be included. System should be available in Brave 1.0 in a couple of months.
Imho the beauty of your BAT system (the way it is envisioned) is it's independency from the current model of monetizing the web, which is ads, gradually evolving towards direct transmission between publisher and consumer.
Ads in the way they work on the web are just a very inefficient system of transferring this value, and they don't serve the original function of marketing anymore. It turned into a big game of psychological warfare.
The system is so inefficient that it finances almost the complete operation of Alphabet/Google.
As a user I don't know how the system works in the background, and when I read the recent news about Brave attacking Google for GDPR violation it was the first time I read about RTB and the technical aspects in the media. People need to know, so they can decide if they want to feed such a system!
Funding Choices seems to be a part of Google's answer to the growing problem of ad-blockers, but it can also bee seen as Google's answer to competition like Brave/BAT.
I read somewhere that under the umbrella of Funding Choices Google is also experimenting with subscriptions like BAT, but without the token.
I don't know how successful Google is with this, but this might be a tough competition for Brave, they will fight tooth and nails, and they control the Android ecosystem.
BAT is attractive for power users as you ride on the wave of privacy-friendliness which Google can't, but I think the real challenge will be the average user that wants a standardized, seamless cross-platform solution that can be used as the main payment gateway for accessing content, which is increasingly via gated Apps.
With Google controlling so much of the market with Android and Chrome, I wonder how they will react to BAT if it ever becomes successful, as they could theoretically quickly scale any competitive project.
I think the biggest advantage of BAT would be if big players could acknowledge it as a de-facto standard for decentralized transfer of micro-payments and privacy friendly ad networks. For this to happen it would be necessary to be somewhat "Open-Source", i.e. not strictly tied to a singly company controlling much of the tokens. I am thinking in line of an open consortium with different players holding a significant part of the BAT tokens each.
On your last paragraph, we can't standardize the BAT ecosystem until it is proven, and as it consists of more than the ERC20 token -- specifically it includes endpoint software currently developing in Brave, plus an anonymous accounting service alongside the Ethereum blockchain -- it won't be proven via the existence of the token alone.
On a future blockchain with anonymity, high throughput, and low fees (a trilemma?), the BAT ecosystem could be fully decentralized. That blockchain does not exist yet.
So our roadmap divides and conquers (the Mercury, Gemini, and Apollo phases), and we will expand beyond one browser when the system is ready, some time next year in my best guess. In particular (as noted in my other comments here), we need a high-integrity and fraud-resistant open source SDK.
Note that the BAT has diffused since inception to over 69,100 holding Ethereum accounts (https://etherscan.io/token/tokenholderchart/0x0d8775f6484306... -- you can see our User Growth Pool and Bittrex's liquidity pool as the top two accounts). The remaining roadmap work items are about token mechanics not token ownership.
> The system is so inefficient that it finances almost the complete operation of Alphabet/Google.
Since Youtube is wildly unprofitable, Alphabet/Google has to be funneling in money generated from other sources. Thus, Youtube is funded by ads, just mostly not from the ads on Youtube.
It was mentioned in a private email that the only reason YouTube exists is that Google's servers happens to have a lot of free disk space in the days before SSDs.
How will you prevent the user from "opting in" but then not displaying the tabs? E.g. an extension could render white boxes in another (mostly transparent) window above the browser, thus acting like an ad-blocker.
Brave's agent is C++ built into the browser, it prevails over extensions (which we will also guard against at the point of installation).
It is a mistake to think of the BAT ecosystem fraud threat (which exists, for sure) as the same as the threat with remote scripts for ad view or click attribution and confirmation as practiced by ad-tech today. Third party scripts run without any integrity guarantees, so get fooled by fraudbots and cheated by other scripts (see "cookie stacking").
The "plane of adequation" defining truth as correspondence between an ad and its observed effect is browser native code, not Nth party scripts loaded into a DOM stew on page, or extensions and their JS scripts, which have privileges above page scripts but below browser native code.
Therefore the fraud threat to the BAT platform is a botted Brave instance including the BAT SDK. This is why we are planning to use secure remote attestation enclave/zone tech to ensure SDK integrity, and sensor M/L to check all the sensors for proof of humanity.
So for fraudbot users to get money out requires a costly simulation (see AML/KYC/etc. point I made in another reply today). Just hiding ad tabs (without faking identity for KYC/etc.) to waste ad spend would require faking the payable ad actions attested by the SDK, including human-like event streams.
Fraud risk never goes to zero with humans in the loop, but with BAT's native agent code, we keep the cost of fraud way above the low cost of fooling today's ad-tech scripts on page.
Do my ip-address, sites-i-visited, date/time of visit, geo-location ever gets stored in on a server outside (eg outside my phone or my computer I am browsing on)?
None of those get stored or even sent, except of course for IP address.
IP address is not yet masked for update pings (same as for all self-updating browsers, required for security patching) and for similar pings to check for updated ad/tracker blocklists. If you do not opt into any BAT ecosystem features (contributions or ads, which enables contributions), then your IP address is not otherwise used, but it does show up in our logs. See https://brave.com/privacy/ under "Technical Infrastructure".
(We'd like to do the update ping via Tor since we have Tor tabs already, but this is in the future.)
If you opt into BAT features and take free BAT grants from us, then IP address and a wallet identifier are used for antifraud purposes, but not otherwise. This is covered in the privacy policy at https://brave.com/privacy/ under "Payments".
Given that the individual take from this would be miniscule, what’s the advantage over an ad blocker? This sounds like a lot of faux-currency nonsense for little reward (client side at least) to fix a problem that already has a working solution. Plus, the existing solution blocks all ads, and tracking scripts, which is a huge win.
The individual take has yet to be demonstrated, but do some math. $80B gross USD (at least; the IAB said $88B) spent on digital in US last year, say across 250M people (with Dr. Augustine Fou of NYU estimating fraud took $16.2B, lots of bots too). That is $320 gross ARPU if spread evenly -- which it is not. (Note we are worldwide and build for Europe and Asia too, not just at the US.)
Many of Brave's users at this early stage are "lead users" (Eric Von Hippel, MIT) and represent off-the-grid prospects because they block assiduously, either in Brave alone or with Brave + uBO or another solid blocker. Lead users are worth much more due to their high usage of search, ecommerce, and paid services. I would not be surprised if our users can make $70/year as we bring the system up in 2019 -- when ad deals will be harder to come by and we'll subsidize revenue from BAT's User Growth Pool -- and climb by 2020 to above .7 * 320 or $224 net user revenue per year.
Let's find out! We aim to find the fair price for human attention after blocking all the fraud, arbitrage, and abuse in the current system, using the BAT ecosystem.
Note that by default, user revenue share flows back monthly and anonymously to each user's top/pinned sites and creators on YouTube, Twitch (and more UGC platforms to come). We expect most users to avoid the bank-like AML/KYC/anti-sanction/anti-fraud checks required to take out their revenue, but legit users are welcome to cash out (our partner Uphold, and more to come, can exchange BAT <=> many fiats and cryptocurrencies/tokens).
If we are right, then most Brave users, with their individual data sets and Brave instances/agents, will in effect replace the corrupt, crowded intermediary space using and abusing remote scripts to target and confirm ads today. After we have the model performing, it's on to other browsers, games, podcast apps, and so on.
To support your numbers somewhat: iirc at one point about 5 years ago Bing was giving out ~$120 a year in Amazon gift cards if you were a heavy searcher on Bing
People already pay more than that to avoid ads on things like YouTube, Hulu, and other services. Given that people often spend quite a bit of time online, I wouldn’t be shocked if they’d be willing to not pay, but just “miss out” on a fraction of what they’d actively pay to avoid ads... to avoid ads. That of course is all before they consider that the system is designed to avoid them ever cashing out.
I’m guessing the population aware of and interested in ad blocking and the population willing to half ass it in Brave is very slim indeed. I suspect that a majority who have become motivated to use an ad blocker and especially a script blocker have no patience left for any incarnation of advertising, regardless of fractional “rewards” on offer.
We full ass, never half ass :-P. Also, nice try suggesting we get only a subset of users who care about ad blocking -- our main win vs. Chrome is speed, 2-8x faster on top news/media sites on mobile, and correlated lower data and battery costs.
Your negativity aside, the test has not been run to completion where it matters, in the market. I keep noping out of YouTube Red or TV or whatever it's called, because Brave blocks all ads there and (with forthcoming work to enable playback controls in various settings including cars) easily beats the pretty-terrible YouTube mobile app.
The idea of charging for Brave that you lead with occurred to us, but browsers and even non-corrupt ad blockers are free, so it looks like a high hill to climb. Perhaps with the slicker video controls and integration work, but anyway, glad we got past the assertion about "miniscule" revenue to users. In my experience, paying users beats charging them :-D.
BAT in Brave is opt-in -- each user consents before anything local happens with data or zero-knowledge/blind-token attestations -- and users can get _gratis_ BAT grants right now using the stable desktop browser (this is coming to mobile in about a month). The anonymous contribution system is the basis for the also-opt-in Brave Ads system, which uses local data only, local machine learning agent, and no cookies or user tracking by any server (even ours). Ads match against a catalog fixed daily or less frequently for a large set of users in a region who speak the same language. Attribution and confirmation use Chaumian blind tokens.
Users get 70% of revenue for opt-in, user-private (in tab), high quality ads at user-configurable frequency. We are working with publishers to provide user-opt-in ads for sites too, 70% revenue to the publisher, 15% to the user. User ad trial is under way right now, ping me if you want to be included. System should be available in Brave 1.0 in a couple of months.