Brave — a web browser co-created by ex-Mozilla CEO Brendan Eich —launched Brave Payments in beta yesterday.
The Brave browser blocks ads, but it also offers a novel solution that allows publishers to keep generating revenue. Brave Payments allows users to top up an account with bitcoin, select a monthly budget, and select sites that they would like to pay when they make a visit.
Brave automatically pays these publishers based on the amount of time users of the browser spend on the publishers’ web properties and how much the user is willing to give. BitGo is providing bitcoin wallets for Brave users and Coinbase is providing the marketplace for bitcoins to be purchased.
Brave faces three hurdles before it can be a successful micropayments browser:
- Gaining platform share: Chrome dominates platform share with nearly 50% share of global usage, followed by Safari with nearly 13%. Browser usage is habitual and Brave will need to provide a compelling case for why users should adopt it — the ability to pay publishers likely won’t be compelling for most people.
- Getting the support of publishers: Publishers that use ads as a revenue stream could do a lot to raise awareness about Brave, but they are unlikely to do so. Publishers in the industry has already labeled Brave’s ad-blocking technology as “blatantly illegal” and for publishers with a softer stance, supporting Brave would still be a big gamble. Publishers could take the view that ad-blocking is here to stay and Brave presents an opportunity to win back revenue, but even if Brave grows in popularity, there is no guarantee that its users’ will top up their accounts to pay publishers.
- Convincing people to pay: There is some evidence that people will pay for web content. Almost 15% of US adults say they would prefer an internet experience with no ads in which all content was paid for, according to survey data from Zogby Analytics. But that preference doesn’t necessarily indicate wat behavior will look like. The friction associated with downloading a new browser, learning about bitcoin, and buying it in order to pay for content that is otherwise free is significant.
Brave technology is a solution to one of the big hurdles to a fee model based on time spent on content. Even if people begin paying for website visits, they are unlikely to pay much and these online transactions are typically made with credit and debit cards. These small-value card payments are a big problem for publishers because they carry fixed per-transaction fee in a addition to a variable fee based on the amount spent.
That means that low value transactions tend to be less profitable and can even create losses. But fees for Bitcoin transactions are next to nothing, which makes low-value payments viable online. BitGo’s pricing for outgoing transactions is 0.1% of volume.
Blockchain technology, which is best known for powering Bitcoin and other cryptocurrencies, is gaining steam among finance firms because of its potential to streamline processes and increase efficiency. The technology could cut costs by up to $20 billion annually by 2022, according to Santander.
That’s because blockchain, which operates as a distributed ledger, has the ability to allow multiple parties to transfer and store sensitive information in a space that’s secure, permanent, anonymous, and easily accessible. That could simplify paper-heavy, expensive, or logistically complicated financial systems, like remittances and cross-border transfer, shareholder management and ownership exchange, and securities trading, to name a few. And outside of finance, governments and the music industry are investigating the technology’s potential to simplify record-keeping.
As a result, venture capital firms and financial institutions alike are pouring investment into finding, developing, and testing blockchain use cases. Over 50 major financial institutions are involved with collaborative blockchain startups, have begun researching the technology in-house, or have helped fund startups with products rooted in blockchain.
Jaime Toplin, research associate for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on blockchain technology that explains how blockchain works, why it has the potential to provide a watershed moment for the financial industry, and the different ways it could be put into practice in the coming years.
Here are some key takeaways from the report:
- Spending on capital markets applications of blockchain is expected to grow at a 52% compound annual growth rate (CAGR) through 2019, according to Aite Group, to reach $400 million that year.
- Banks and major financial institutions are working both collaboratively and independently to develop blockchain tech. Over 50 major financial institutions are involved with collaborative blockchain startups, like R3 CEV or Chain. And many are investing in the technology on their own as well.
- Putting blockchain to use for real-world transactions is likely not that far off. If working groups’ tests are successful, firms could be using it to transact real value as early as the end of this year and we could see widespread industry application within the next few years.
In full, the report:
- Examines the funding increases that are pouring into blockchain
- Assesses why blockchain is becoming so popular and what factors are driving up increased research and development
- Explains in full how blockchain technology work and what assets make it valuable and vulnerable
- Identifies pain points in the financial industry and profiles how various firms are using blockchain to solve them
- Demonstrates the challenges to mainstream adoption and their potential solutions
To get your copy of this invaluable guide, choose one of these options:
- Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. START A MEMBERSHIP
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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of blockchain technology.
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