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The challenge with any new competitive market is determining how to differentiate oneself from peers. Nowadays, it seems like blockchain-based crypto coins are a dime a dozen—no pun intended. Type any three letters into Google and follow it up with the word 'coin', and more likely than not, a crypto coin will be in the search results.
This isn't necessarily a bad thing—blockchain technology has a legitimate shot at being the way of the future. Even staunch critics like the executives at J.P. Morgan have noted that the technology itself is promising.
Many coins are just that—crypto coins that function like currencies. The only difference is that they cannot be physically exchanged, unlike dollars, pounds, or Euros. Some coins, however, serve an additional purpose—they are tokens to be used on a blockchain based platform that offers some type of product or service.
One digital coin, Basic Attention Token (BAT), launched at the beginning of June, 2017. BAT coins serve a dual purpose. First, they are coins that can be used like other cryptocurrencies. Second, they are tokens that unlock incredible features on BAT's new digital advertising platform.
Similar to its peers, Basic Attention Token is a blockchain. Blockchains can be defined as verifiable ledgers that maintain records of all transactions that take place on said ledger. With a given blockchain, hundreds, even thousands of users can view and audit the blockchain, meaning all users can verify all transactions on the platform. As a result, the blockchain is secure and transparent.
BAT coins have shared qualities with other cryptocurrencies. BAT is fully transparent, auditable, and most importantly, decentralized. However, it differs from other crypto coins in one key respect. Unlike its peers, BAT coins are the tokens for BAT's digital advertising blockchain platform and are used to conduct operations therein.
As a relatively new coin, BAT hasn't enjoyed the press that its larger peers like Bitcoin and Ethereum have. However, meaningful explanations and further definitions of Basic Attention Token can be found online via sites like Reddit. Here, users can find further discussions that define the coin and some of its key features.
As a younger, less popular crypto coin, BAT coins must be bought by exchanging other coins. To buy BAT, a user must first set up their crypto wallet—a digital bank account that stores cryptocurrencies—and link it to an exchange.
After funding the exchange account with cash or with a credit card, users then purchase a popular cryptocurrency like Bitcoin. Then they must find an exchange where BAT is sold and trade in their Bitcoins for BAT coins.
To withdraw BAT from an account, users must convert their BAT coins into Bitcoins. After the BAT coins are turned into Bitcoins and moved to the wallet, Bitcoins can be exchanged for the fiat currency of the user's choice—typically the currency they first funded their account with.
The money is transferred to the bank account, where a cash out can be completed at an ATM. Though there is not a direct way to sell BAT and receive USD, GDP, or Euros, the process is easy and straightforward.
Basic Attention Tokens serve two purposes. First, like other cryptocurrencies, they can be used as an investment vehicle. A fair amount of cryptocurrencies have seen a dramatic rise in value this year alone.
To invest in Basic Attention Tokens, users must first download a crypto wallet that will allow them to exchange for BAT coins. This process has been further explained above. After purchasing BAT coins, users can buy and hold the coin in hopes of being met with price appreciation, or they can trade the coin more actively, aiming to buy low and sell high.
An advantage of cryptocurrencies like BAT is their independence. They are generally free from government interference and central bank policy, resulting in freedom from price manipulation and the exchange rate risk that comes with overactive central bank policy makers.
Second, BAT coins are used tokens on Basic Attention Token's proprietary digital advertising platform. BAT's blockchain technology creates a decentralized blockchain ad exchange where content creators, publishers, and users can interact directly. Their interactions, whether creating, publishing, or hiring, are conducted with Basic Attention Tokens. But BAT can also be used as cryptocurrencies to purchase any number of item, and even be used to play BAT poker.
Users who view ads are rewarded with BAT coins. The coins can be used to purchase content or services on the blockchain platform. Publishers, as a vital part of this service, will receive part of the total ad revenue, allowing them to create and publish more content. And so the cycle will continue.
Basic Attention Token mining is the process of verifying all transactions that occur on the platform. In this process, miners validate groups of transactions—called blocks—which are subsequently added to the blockchain. Blockchain mining smooths out the ledger while simultaneously providing accountability and transparency.
Miners are compensated with BAT or other coins like Bitcoins or Ethereum. They can utilize mining calculators to judge whether or not a set of tasks will result in a meaningful reward. Different tasks require different skillsets and yield varying returns; it is up to the miner to choose one that best suits his or her capabilities.
Because Basic Attention Token's platform is based upon the Ethereum blockchain, it follows the Proof of Work consensus method. A Proof of Work (PoW) is a block of tasks that is hard to produce but easy to verify. PoW mining essentially makes it difficult for miners to fake or cheat a solution to the task. It is based upon a set of requirements which must be met before the miner is rewarded. The first miner (or group of miners, called a pool) to solve the task(s) will be compensated.
Mining is a straightforward process. In order to discover blocks and mine them, miners must download a compatible wallet and mining software. These can be easily found online. Miners must also verify that their GPU or CPU has adequate processing power.
Miners have the option to mine solo or in a pool. Mining alone results in higher profitability, but mining in a pool oftentimes comes with greater computing power and faster mining times. When a block is verified and added to the blockchain, the miner or pool is rewarded with crypto coins. BAT's market cap will increase as more blocks are added to the blockchain.
Much ink has been spilled online about blockchain's greatest nemesis—scalability. The blockchain platforms that have sprung up over the years are incredible. But many, if not all of them, struggle to scale well. As values rise and price charts expand, blockchain platforms are still left unable to process large amounts of transactions at a time. In this case, Basic Attention Token is no different. The company's leadership hasn't released any details about their plans, but they are confident they can build and scale this system to have complete user control and much better economics.
Basic Attention Token has enjoyed success as a cryptocurrency. Not only can it be used to make digital coin investments, but it can also be used on BAT’s novel digital advertising platform. To be sure, the coin is young, and some are worried about its viability. But this doesn't stop it from brimming with potential.