Help me understand the basic economics of BAT

So I have skimmed through the white paper, maybe I missed a key paragraph but I still don’t fully grasp who is exchanging BAT and why.

This is my basic understanding of the trade cycle of BAT: an online advertiser spends money on advertising through Brave, which I assume is either forced by Brave to be in BAT or who just exchange from local currency to BAT on their behalf. These funds then go to display the in browser adverts we are familiar with, when a user views such an add, they get a fraction of the previously mentioned ad spend credited to them in BAT. The user, in an ideal world, then transfers their BAT to a publisher for stuff like tips, patronage rewards, micro-transactions, etc. The publisher then want to advertise and the cycle continues…

But this still leaves many questions:

#1 As a webmaster / content creator, why do I want to bother to set up brave rewards ? Any person would prefer real currency. Why would I want to be locked into receiving BAT which I can do nothing with besides buy more ads on Brave browser ?
#2 The TAP network currently allows a user to purchase things like giftcards and enter sweepstakes with BAT. Why ? What use does the TAP network have for BAT ?

Advertisers can pay in BAT or FIAT. But BAT is used as the unit of account on the platform.

Incorrect. BAT received by creators can be exchanged to FIAT or other crypto currency.

For 2, this one is the answer. :point_up:


For a creator who receives BAT who is doing the exchanging to fiat or other currency ? Brave itself ? If it’s third party why are they accepting BAT ? What use do they have for it ? From the BAT faq it says its not intended for trading on crypto exchanges:

" It is transferable. While we are aware that the token is currently being traded on the exchanges listed here and elsewhere, we have not encouraged or facilitated this exchange trading in any way."

So what was the initial vision for why BAT would be valued for receipt from creators ?

And no TAP network is not obtaining BAT so they pay themselves in BAT for gift cards they are selling themselves, BAT must have some other utility for them.

So I partially found an answer to my question.

Publishers / creators have an Uphold wallet just like a regular user. The only way they can cash out of BAT is to exchange it. (Uphold even has built in currency conversion, at a fee of course.) This still doesn’t explain why Uphold or TAP would want to hold BAT. I guess Brave has some behind the scenes agreements with them.

In the grand scheme of BAT the publisher / creator would have more options on what they could do with the BAT they receive but currently there isn’t any. I just find it interesting that BAT launched with this part of the triangle not fleshed out at all, in fact the only thing this part of the triangle can do is what they intended BAT not to be used for…

i have been a user of Brave for awhile now and have had no problems trading my bat for any currency i wish at the time.Being able to find quality creators and tip them for their hard work as well as receiving bat for my time reading and watching ads…It all seems to work just fine from what i can see…Ofcoarse,im sure there are some users who think this set up is for free bat,but it all works better when everyone shares.That is why some bat is for tipping only.

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I’ve never read the white paper. Maybe exchanging BAT into other currencies is not encouraged, but people exchange BAT with other currencies frequently regardless of what the white paper says.

I think your understanding is correct. Good to see you answering your own question.

Actually, I am one of those who can’t trade BAT for anything else. Because I am from Taiwan, I can’t get my Uphold account verified. Sending tip does not require an Uphold account, but selling BAT does.