I was searching Publish0x for something new to read. Quick update on BAT caught my eye. Can never read enough about BAT, Brave Rewards and the Brave Browser.
It was posted by AlexRypto under the Cryptocurrency trading tricks and tips blog. While I would normally shy away from reading anything to do with trading, market analysis or charts in general. Because it was about BAT I decided I would give it a read, sometimes there is a bit of information that will interest me.
BAT, Brave Browser and Brave Rewards are something we have invested in, with our time and money, done some trading in BTC-BAT and collected free BAT when ever we can. It was because of the Coinbase Earn BAT tutorial that my wife became less of a Crypto Skeptic and was the subject of my first tongue in cheek attempt at posting on Publish0x. Turning a Crypto Skeptic Wife into a Crypto Advocate .
I made my wife watch all the Coinbase Earn tutorial videos that were available at the time, so we could get two lots of everything.......my wife made the remark that she liked the BAT/Brave Browser the best....
The Quick update on BAT was exactly that, a quick update on a previous post. A lot of charts and trading jargon.
What spiked my interest was found in the Comments.
A brief comment by aramande04 and equally short reply by the author AlexRypto.
it will go up if btc went up that is all i think...
No doubt! But i think btc not going up just yet...
Both fair comments.
I was prompted to Comment, not because I disagreed with what aramande04 and AlexRypto said. But I had been mulling over a few things and their comments brought these thoughts to the fore. What blurted out was a jumble of thoughts posing as questions.
Q1. What is going to happen when all the free BAT is gone?
Q2. Is giving away free tokens going to create mass adoption?
Q3. When will BAT cut the BTC apron strings and the correlation between BAT and BTC prices?
In the interim it doesn’t help Brave giving away all this BAT. What happens when the free BAT is all gone? Does it skyrocket because we all got to pay for it now or do we stop tipping publishers cause there is no more free BAT. Hopefully Brave reaches the threshold where there are enough advertisers buying enough BAT to get some momentum going forward. And the users actually start using BAT for its intended purpose, Tipping, paying for subscriptions or an inbuilt VPN etc.
Note - I have made grammatical and spelling corrections in Bold.
#1 During the Basic Attention Token ICO there was 1.5 Billion cap on tokens.
Tokens for Sale - 1 Billion, raising $24 million in Ethereum which was 133,333 ETH @ $180.00 per ETH.
User Growth Pool - 300 Million (free ones).
BAT Development Pool - 200 Million (free ones).
With 1/3 of the total supply effectively being free (i.e. no one paid for them) and at some point being given to some one. Unless you are a DEV then the BAT Development Pool is off bounds. That leaves the User Growth Pool for us regular punters.
It would have been out of the User Growth Pool that Coinbase Earn was able to give away BAT for watching 3 short videos and downloading the Brave Browser.
The same place that the BAT tips on Publish0x come from, "Sponsorship" from the User Growth Pool.
Also when Brave was putting 20 BAT in your wallet to be used to give to your favourite publisher, that would have came from the User Growth Pool as well.
It could be argued that this is not really free BAT but was paid for by the $24 million in Ethereum. I think they call it cross subsidisation. but for the purposes of my Comment this is what I was referring to as the free BAT.
This is distinct from the BAT that is earned from viewing the targeted ads on the Brave Browser. These are bought by the advertiser with $$$ and used to buy advertising. Or they traded BTC which they would have paid with $$$.
Giving away free product has a depressing effect on market price. So what happens when all the free BAT has been given away? Does the supply side dry up and we have a upswing because the punters have to pay for it now. Or was the mass adoption we were witnessing really a mirage because we were tipping with free BAT.
Take Publish0x, they are "Sponsored" by Brave out of the User Growth Pool. https://www.publish0x.com/the-bcu-times/bat-brave-and-publish0x-xznerw Given any post about Brave or BAT is guaranteed to get views, it is safe to assume a good percentage are here for the BAT tips. Earning BAT on Publish0x is a big draw card. When the free BAT from the User Growth Pool runs out will we still want to tip Hydro or DAI. Will Publish0x buy BAT to use for tipping, maybe but they would need to generate revenue to do that and that would most likely be through intrusive ads through out the platform.
#2 As for creating mass adoption by giving away free tokens. Stellar Lumens were a case in point. We were lucky to be quick enough to get the Coinbase Earn XLM, Blockchain.com airdrop and a couple of monthly airdrops from the Keybase giveaway. There was also a Sth American exchange supposedly doing a Stellar Lumens airdrop but had already given away their supply by the time we found out about it.
How did that work out for them. The market price went from $AUD0.20 to $AUD0.085 as a lot of people dumped them. In the end they had to burn 55 Billion XLM which was half the total supply.
They are still a long way away from mass adoption.
We still HODL because they were free and the project was promising. I wrote an article about a company building their network on the Stellar blockchain. Future of Crypto in Sport So they might make it yet.
The hope with the Brave business model is that they achieve escape velocity on their way to the moon before the free BAT runs out. According to Coingecko.com there is a circulating supply of 1.4 Billion which would leave only 100 million of free BAT to give-away.
#3 When BAT finally reaches mass adoption it will break free from Grandad BTC mantle. And find its own way in the world.
Technology Adoption - S Curve
For me mass adoption is pretty much anything over 10% penetration of the target market. I leave that to someone else to determine where BAT and Brave are currently sitting on the S Curve.
Now that the Pandora Boxes been opened, today I came a cross a post by BitcoinGordon Which Coins Will Fail? Understanding the Correlation Between Project Value and Market Value It is a lengthy read at 18 minutes. After reading it I thought I wouldn't bother finishing the post and publishing. As BitcoinGordon pretty much sums up some of my thoughts and is a lot better at articulating his than I am. In the end I decided to publish anyway because this is not so much an authoritative opinion but more posing some questions to get people thinking.
Note - there were more comments made on AlexRypto post that I have not reproduced here. For not other reason than it would make this post a bit too long of a read.
This is intended as an open discussion and please use the Comments if you have answers to the questions or you don't or do agree with anything thing I have written.
Thanks for reading thus far.