What makes Basic Attention Token (BAT) valuable?
Let’s look at gold, silver, and diamonds. Gold is “relatively” scarce, both silver and gold have actual utility, and diamond supplies are heavily restricted while being marketed as a premium gemstone. The general, overarching reason for their value is that there is limited supply with high demand.
And this is why crypto currencies and tokens are valuable as well:
There are a limited supply of tokens/coins (and in many cases, finite). The more people that acquire that coin, the more its value increases.
However, each crypto currency/token is different. The ones with more utility, more reputation, larger user base, becomes more expensive faster. This is why one Bitcoin was worth $0.25 in November 2010 (when it was relatively unknown), and is now over $7000 in November 2017.
So where does BAT derive its value?
Basic Attention Token’s main utility is to act as a transfer of value within 2 networks and economies:
- Online advertising (in association with Brave) and
- Payments to websites (donations and for content)
By acquiring BAT, you are investing in the online advertising industry that is being established by the BAT/Brave team. So if Geico decides to spend $10 million dollars in an ad campaign on the network, they have to buy BAT to transact through the ecosystem, which raises the dollar value of every BAT that you hold. This is the single most important difference between BAT and any other crypto currency:
The BAT ecosystem is not limited to just everyday users acquiring the token. There will possibly be incredibly large amounts of money flowing in from digital advertising, which is over $50 billion per year since 2015.
The amount of advertisers participating is yet to be determined, but we know that Brave already has millions of users. At the very least, this should make the Brave/BAT platform quite enticing for advertisers.
The secondary utility of BAT – which essentially acts as a tipping (donation) mechanism from users to publishers – will be another channel for websites to monetize. If you own a website, you’ll basically be getting free money whenever a participating user visits your site. The BAT team has also announced plans on working with major publishers to accept BAT as payment for goods and services.
Oh, and another cool thing about Brave/BAT:
Whenever advertisers show you an ad, you get paid in BAT from their ad campaign straight into your digital wallet in your Brave browser (without any signups or banking information required!) However, this functionality will not be available until 2018.
One last question to answer – how much will BAT be worth? Currently, as of Nov 7, 2017, the price is about 14 cents per BAT. We take this price and divide it into the number of tokens that is currently in circulation (1,000,000,000 – one billion), which comes out to a market cap of $140 million, which is the total estimated money put into the BAT ecosystem. If a number of large companies buy $500 million worth of ads, then the market cap will go up to $640 million, making BAT worth $0.64, and so on. There is a lot to talk about in terms of how successful BAT might become and who might jump in, but one warning I’ll give is do not take this as investment advice!
BAT, at the end of the day, is still a young blockchain token and an extremely risky investment should you decide to invest a little money into it. But if you want to know more and would like to get your hands on some BAT, check out 3 Ways to get BAT!