Brendan Eich: Brave – Reinventing the Monetization of Content and Attention (Episode 185)

Transcript

[Music] this episode of epicenter is brought to you by The Ledger Nano s the hardware wallet which sets the new standard in security and usability get it today at Ledger wallet.com and use the offer code epicenter to get 10% off your order hi welcome to epicenter the show which talks about the technology projects and startups driving decentralization and the global blockchain Revolution my name is seban guo and I'm her Roy today we have an amazing distinguished guest on our show

uh Brendan a who is the inventor of JavaScript uh founder of uh the Mozilla project the Mozilla Foundation Mozilla Corporation he now working on Brave which is a browser that is seeking to remake the digital advertising industry Brendan it's an honor to have you on the show it's my pleasure good to be here so I thought to get started maybe just just tell us a bit about your work history as an as an early internet internet Pioneer like tell us about your journey of in the past 20 years where to start so I I worked on the internet in the 80s for silicon Graphics I worked as a Unix Colonel hacker on sgi's version

of Unix called Iris I did file system and networking uh kernel code um and I I knew all about the IP protocol stack then I wrote a network uh sniffer sort of like a packet filter and some prodct some code on top of that to analyze capture and analyze packets let you sort of Express filters over uh the header fields of those packets so you can capture only some of the packets um that was a lot of fun and that was one of the many little language projects I did that paved way uh ever since I got into computer science as a physics major Ur while as an undergrad so I I was doing you know computer science from the

formal languages and automa theory side and I loved that because it was very clean right you you can generate parsers from grammars things like that uh studying regular languages so I had experience that when I got to Netscape I'll skip the company between silicon graphics and Netscape when I got to Netscape in the second year the the Temptation for my friends who were there and had been at silicon Graphics before that was come and do scheme in the browser and they loved the scheme programming language the guy steel and Jerry susman's uh sort of version of lisp with uh lexical scope um very very clean lisp variant and it was uh just a pipe dream to put it in

Netscape Because by the time I hired there was a deal brewing with sun Microsystems to put Java in Netscape and you know take on Windows like Mark andrion would say Netscape plus Java kills windows so I had suddenly uh first of all the concern that maybe we don't need another language maybe Java is enough but Mark believed in the idea of a scripting language a simple language right in the HTML and so he and I collaborated on some of the ideas and constraints on that language one of them was it had to look like Java another was I had to do a prototype in 10 days to prove to everybody else that was worth having this this novel idea because Java was not easy to use in particular it was

a typed language and you had to run a compiler and package up the you know the bike code and and so uh I I did the demo and it it got out of the lab and it spread all over the web that was uh 1995 May um 22 years ago uh the web was you know quite different then but Netscape had made it commercially viable with um secure sockets layer the htps uh URL scheme what we now call TLS um which is you know quite different um and uh URLs were on billboards suddenly uh everybody was moving on to the web and the do com era JavaScript was sort of a source of annoyances at first because it

was directly integrated with the page so you could do things like um popup windows and status bar you know scrolling uh messages and things like that but it was also even in '95 used to build what we now call single page applications for doing sort of uh instead of a series of pages you load it was like a a set of frames or windows that kind of update themselves constantly Based on data from the server so uh that that Vision was there from the beginning and it really came to fruition 10 years later in 2005 you remember when Twitter was founded and Ruby on Rails was big and the Ajax uh term was coined uh by Jesse James Garrett and that was just a more

efficient way of doing this single page application idea where the data comes from the server continuously um and JavaScript was the key uh language for making that possible flash was also in the mix uh but flash is is you know all but dead thanks to Steve Jobs Banning it from IOS and and Android following suit um so I I in doing JavaScript I I realized it was going to be a kind of a long shot but if got it done fast it would prevent Microsoft who was coming after Netscape from foisting Visual Basic script on us so I like to say JavaScript saved us from Visual Basic script um and it got better JavaScript had a a good first standard Microsoft

actually contributed one of the people at Microsoft in particular Sean katzenberger contributed to that standard and it evolved a little bit uh through the Third Edition in 1999 and then Microsoft you know felt oh the web is too hard we we got convicted of of using our Monopoly in an antitrust case the US versus Microsoft case uh where they crushed Netscape um poor us let's let's go back to good old windows lock in and they took Internet Explorer um down to a skeleton crew and meanwhile after standardizing JavaScript I had founded with others uh Jamie winsky and many others uh a lot of whom departed quickly the Mula project and we were trying to make a sort of Escape pod like

in Star Wars uh that that carried the droids to the planet so you could have a fourth episode um this was uh to get moa's uh netes code out as an open source browser engine and browser front end and when we finally did that it took years um we were also running out of rope at AOL which had acquired Netscape so in 2003 we spun moua out as a nonprofit it had not been a separate legal entity before then it would just been a virtual group with most most of the people working for Netscape AOL and uh in some ways fighting against Netscape AOL because we were trying to have a open- source code culture that was high quality and and not corporate and not badged with AOL and icq and aim

and all these things you might remember from that era um and and so moua got better over the years but Netscape wasn't in the good graces of Al and finally everyone got laid off in 2003 except some of us who then were set up with a foundation uh so AOL had a sort of a a clean ending to the story they gave us $2 million over two years I picked a handful of people to do the technical work we um we set up a 10-person shop and we did Firefox we knew we had to do Firefox we knew it had to be a browser if you remember Netscape in the 90s was a suite of communication tools a browser an email program uh a news reader and a dress book and an editor we we said

let's just make the browser great and we have also had Thunderbird as the mail program but we separated concerns we made each app do one thing well we had an extension model which has now become common among all the browsers uh though the apis differ there's some now convergence around Chrome's extension model but at the time we were the first and we did a very rich extension model for Firefox for add-ons so-called and Firefox retook market share from Microsoft this was unheard of right people said the browser dead the browser Wars are over no one will ever get any market share away from an Internet Explorer because it's bundled with Windows um and yet because Microsoft had taken it down to a skeleton crew and sort of foresworn it and tried to go

back to Windows only Technologies net and so on Windows Vista stuff uh there was an opportunity and we knew there was an opportunity because users were suffering they had Internet Explorer with ActiveX based malware popups were not blocked by default there were lots of problems it was considered a slow because it would get congested with with malware and it it wasn't being maintained so it definitely was slow with the newer kinds of web content that were still um emerging even even in the 20034 era so Firefox really did restart the browser market and that allowed us to restart this web standards process because that also shut down when Microsoft monopolized the web and and sort of stopped working on the browser

on IE uh there was a sort of conflict in the w3c because people who were enthusiastic about XML and the semantic web thought well this is our chance to clean up that messy 90s HTML nonsense we're going to just rewrite the web as XML and everyone will run a a syntax Checker and make sure it's perfect before they deploy their code never happened it wasn't going to happen so we knew that and with friends at Opera and apple we set up the whatw working group to do HTML 5 we said let's let's do HTML 5 it's been a while since HTML 4 which was 997 I think uh m moft really invested in HTML 4 and and did well it's part of their kill Netscape plan but they you know they did some good stuff

let's do HTML 5 and that finally happened even got back into the w3c in 2008 or so we also at Firefox had a search deal with Google so we were partnered nicely and making good money off that deal at first um but I think it over time it became clear um that Google could do its own browser and they did and that was Chrome Safari was out uh I think 2003 based on um an open source engine called ktml they eventually forked that as webkit in some ways they wanted to make a mini Mozilla that was an open source project for it webkit became uh popular and and the Google um folks used that for Chrome's engine eventually forked it in 2013 so you can see there sort of

once we restarted the browser Market Innovation came back and there were successive waves of forking and building new browsers and that never stops people now kind of say oh Chrome's you know the new um King browser and how can you ever do anything about that just but Chrome is not going to reach the 95% share that iie did it's also um you know it's it's not blocking ads by default because I think that goes against Google's business interests uh directly so with brave I I wanted to take on a problem that bothers me personally and I know a lot of people agree it's not just the ads it's the trackers which we Block it's the fingerprinting methods which are very subtle but the common ones can be blocked too we're trying to defend

your data on your device because it belongs to you first and if you're not getting paid for it then you're you're the chump right in the poker game you look around the table if you can't spot the chump it's you if you're you're getting a free service you're giving out a lot of data and someone's making a lot of money off it um this this led pretty directly to bitcoin and to cryptocurrencies because if you're you know money isn't everything it's not the measure of all things but if you're not valued enough to get a share of the revenue for instance for ads that you see um then something's wrong and if you are to get a share of that it has to be frictionless it has to be uh as as uh low cost as possible and there are nice

things about cryptocurrencies like multi signature wallets um there are things coming to cryp cryptocurrency blockchains like anonymity uh and lower transaction costs and so it's attractive if you're going to solve this user data problem where users are not paid for their attention properly and you you have a new browser that can clear the deck of ads to use cryptocurrencies you just took me back throughout my entire teenage years there from you know like the because I started coding I started doing web development you know when I was about 12 which would have been around like 97 and you know going back and like I mean we we we kind of web

standards for granted now um although there are still a lot of things that can be done to improve web standards but when you look back just that you know the things you mentioned like flash that were comp competing with Java and and like this little period there with xhtml or whatever that was um yes yeah it's it's incredible the you know this this progression that has taken us here where um you know even I remember what like seven or eight years ago you know back in the I6 days um you know web standard we were just praying for web standards and and now you know now they're pretty much here with regards to how brows browsers interpret um HTML and CSS of course like the stacks got more complex

now you know with um with with SAS and this these sort of layers on top these precompilers but uh it feels now like web standards are are pretty pretty pretty solid right across the board at least from from where I'm standing now I'm not doing as much development as I was Prior but it does feel like we've gotten to a point now where you know browser manufacturers at least on that side are agreeing on you know what standards should be what standards they should adhere to Etc it's it's better I mean web standards take too long I'm used to this because I still work on them I was just at a JavaScript standards meeting hosted by Google in New York this week but the web is slower to evolve and it it's going to you know not have all the shiniest

features that the latest iOS releas has necessarily on the other hand the web has the greatest reach there's just no way to get around that this is a trade-off and so I think it's incumbent on browser vendors to keep rolling up all the great new Innovations from the device makers or the OS vendors into the web standards and you know there have been pauses there for sure due to monopolies and U sort of conflicts of interest business interest between the browser and the other business that pays the browser vendor you know bills so so my my goal still with with web standards is to just keep keep people working together in a harmonious way so that we roll up these Innovations the web will

never be you know like the better than iOS or better than the latest Android in one particular Dimension or other but it'll have the widest reach and if you can roll up all the common Innovations it'll be good enough that's the web what you're saying there is so telling because when you say that the web has more reach and it takes longer to to get to standards you if you look at the last what when the iPhone came out in 2007 there was I remember at that time there it was believe that any any user interface would be an app basically you know that you would build an app uh rather than a mobile website and that I mean it hasn't totally shifted but you know we're seeing the web now on mobile

become uh sort of regain its place as one of the dominant Ways by which people access information that's greatly to web standards I I think yeah it's funny when the iPhone first launched jobs fin held up the iPhone one and said the web finally works on a phone and they didn't have the App Store model uh they did that like eight or nine months later and I think they did it because of games games wanted to have a native SDK they wanted to use C++ and you know run it down to the metal and so uh they made the the App Store uh possible and they made the app model possible and then the next year I think it was 2008 there there's an app for that right um and certainly you could do well by jumping

in on that you know New Frontier I remember Evernote which had been a PC app suddenly became uh an IOS app and that was really good for them um they they lowercased the n in their name um but but you're right the pendulum sort of swings if the web is competent enough people don't want to install yet another app all the kids these days are uninstalling apps um there's sort of an equilibrium depending on screen size and the competence of the web standards between getting another app and just using the mobile website and if that equilibrium you know is is stable I think the web endures we're seeing a lot of native apps now being developed with web standards right I mean yes if you look

at what is it called um not electrum but um this this platform with which you can build rap native is an example um you use JavaScript for the business logic of the app but you you compile to Native uh widgets there there's still a sort of interplay co-evolution between native and web as there should be because that that's what drives I think standards Innovation the standards bodies if they go off and try to innovate on their own it's usually a disaster right it's like that xhtml that never happened I think electron was what I was referring to and I ionic and all these platforms um and we could spend two hours talking about this but I think we'll uh because I'm I'm super excited about all this stuff uh but I think

we'll move on to the the you know the core of the discussion today which is which is brave and and sort of monetization on the internet um and How brave is planning to improve that uh so let's let's take a few minutes before we get into into Brave and and the further topics uh explain how you feel today you as it stands in 2017 when when you look at the state of monetization on the internet uh the way that companies monetize content the the options available for companies to monetize content I mean we we monetize our content uh in in one in one way which is to embed ads directly into the content that we negotiate with advertisers um but uh you know there's all kinds of other models explain in your view know sort of what what's

broken what might work or what what is the sort of the the core problem with monetization on the internet today so there's been a lot of talk about um the cost of fraud in adte or online digital advertising and I I don't think it's a surprise that it there because the system evolved pretty haphazardly opportunistically the the cross-site image actually came in 1993 from Mark Andreas and Eric beina when uh before Netscape they were at NCSA at University of Illinois orbana champagne and Mark just does his typical post saying hey we should probably add images to HTML here's how we want to do it and I think at that point Eric Bean had already written the code so it was a done deal

and with an image in HTML in 93 you could hot link right you could make the image source be a different domain from the page the image was embedded in you know your your friend has cat pictures you want to link to them from your site it's all good um it was called hot linking because if 10,000 people did it could melt your friend's server not so good um and some sites discourage this but that's just part of the web now you can you can load images across sites one of the reasons when I did JavaScript and in 96 I made the script Source equal attribute work I made crossy scripting possible on the same principle you should be able to share scripts have them on a Edge cach they could be like Library code there's security implications I'm not going to get into

them but you know we sort of evolved our way to a understanding of how to deal with that securely crossy scripting is still a problem um in in between images and and cross-side scripts was the cookie blumont Tuli at Netscape in 1994 Netscape 1 and the cookie was there so when you logged into a website over the stateless HTTP protocol if you went back or If you restarted your browser or closed your window and reopened it and it remembered the page you on you didn't have to log in again because after all the protocol stateless the site wouldn't remember anything about you without a cookie so Lou came up with this idea of a little bit of storage local storage to the browser indexed by the name of the domain sent

on every request and the server can respond with an update to that cookie in the response in header and so you can keep login information like authentication credentials that are fresh cash that way great idea don't want to log in every time I go back unfortunately Just Between the crossy image and the cookie third- party cookies were accidentally invented and became a tracking mechanism because if you think about the cookie it's sent on every request well what's a third party request it's that embedded cat picture that's on your friend server goes to a different domain if that cat picture is embedded on two sites the cat server can now see through the cookie that you went

to both sides it can give you an identifier just a madeup number when it sees you on the first site you go to the second site because it's in the cookie is indexed by the cat servers domain it sees the first value in the cookie and it says hey I I I I know that that user already I have a database that says they they loaded my cat picture embedded within uh a larger page you can tell what you're embedded in generally there's ways to do it like the way the the cat picture is spelled so in the second page that embeds the cat picture now they know you've been there too they can surveil you they can build a dossier on you this is used for Behavioral targeted advertising online behavioral advertising um it's it's pretty out of hand frankly and this is one of the reasons why there's fraud in

the system uh there's also a lot of sort of conflicts and Arbitrage games played that have to do with the data that's tracked this way so when people go to make money with ads they have this model as Publishers that's sort of like the old days of newspapers the ink on paper ads I'm going to give up some space maybe I can even have some editorial control so the ad is nicely matched to the first-party content but what inevitably happens even with big Publishers is they can't do direct deals with the brands the Best Brands they have to go through ad exchanges they have to go through what's called programmatic advertising which really just means automated advertising it it's a matchmaking process because there are too many websites and frankly too many

advertisers to have direct deals all the time negotiated between every pair of Advertiser and publisher so the ad exchang has evolved programmatic evolved since 2009 in particular and we've got a world now with Incredible indirection and sort of accidental delegation there's no strictly binding contract between the publisher and the actual ad provider who gets a match wins a bid in a real-time bidding process and that's why you can have malware placed on top sites like happened last March in the New York Times BBC online AOL all had the angler exploit kit ransomware sneak into their their programmatic ad uh

Supply uh and and it wasn't something where the New York Times could say I'm you know those are my ads I'm responsible for they didn't want the liability of course it was accidental and it was through an ad exchange the ad Exchange took a fee when that that malware placed so what is it now it's it's happy got a fee uh it wasn't its fault you know the the malor vendors are tricky they set up fake ad agencies they set up fake LinkedIn profiles for the the CMO of their Ad Agency they really try to pull one over so you know no one knew any better it's not our fault too bad some users got their PCS pwned by ransomware that's just one of the like worst case effects here but the other side of it is you get real ads that are placed in fake sites in order to and

these fake sites are very convincing and the ads are clicked on by fake users to steal ad Revenue so the the legitimate marketers say hey my ad my video ads really popular on these sites and it looks like real users are clicking on them my anti frod pixels that I ship my scripts that I ship to make sure those are real users are satisfied they have the right IP address it looks like it belongs to uh a Verizon South ISP in the US well it turns out the the bad guys here went to um some internet service provider and said I need a block of residential IP addresses I'm with Verizon South and they spell v r i s o n and nobody noticed it wasn't Verizon with a z and they assigned the IP numbers and they were used by a

fraudulent robot browser against a fraudulent publisher page that embedded a real ad and they Advertiser actually paid like 30 days later they said I like those Impressions it looks good to me I'm going to pay you 3 to 5 million a day according to a white paper uh that white Ops uh security did on this particular attack called meth bot so you get fraud and you get malware you get incredible um like nobody's to blame it's seven degrees of Kevin Bacon you know who knew not our fault and and that is wasting billions of dollars a year they estimate this year 16 billion in fraud um meanwhile not to mention the the bang withd costs the I can tell you

yeah there's just to put a point on that there's a study from The New York Times that um our friend Rob leather now at Facebook picked up on you spend half your data plan cost loading trackers and ads not just the ads you see but the tracking scripts and the programmatic scripts that load before them you're not you're not getting free internet the ads are not part of the value exchange you're actually getting it coming and going your data plan half of it wasted on tracking and scripts and ads and then because they take your data out they make money on you on the backside too let's take a break to talk about The Ledger Nano s the new flagship Hardware wallet by Ledger I'll let Ledger CEO Eric lar tell you all about how simple the Nan s makes it to securely store all

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you think could have been I mean you've been around the internet for a while uh needless to say what do you think could have been done differently maybe in the beginning apart from like not inventing cookies and cross-side scripting um what happen differently for us to have sort of a more you know privacy respecting internet today can you point at like specific things that say oh this was kind of a thing like bad idea I could you know the 2020 hindsight and there are people I know who have a very um strong security philosophy like I'm friends with people who are object capability security uh pioneers and their system is attractive and if people use it with discipline and

care and with some tools to verify it it can be very very powerful I like it I'm technically on board with object capability security and JavaScript has some of that in its bones has a few loopholes that are notoriously not object capability security but the plain fact is I don't want to play Monday Morning Quarterback the web would not have evolved without this rush to commercialize it without these unintended consequences like nobody thought hey images plus first- party cookies equals third party cookies equals tracking nobody figured that out in time it was unintended consequence it was accidental Evolution very much like sort of biological life and if you had a doover and you tried to control the change and make it slow and careful it wouldn't have taken off like Dorothy

Denning a famous security uh researcher I forgiven her for her Clipper chip support uh invented information flow Security in the 70s she gave a speech in 99 or 2000 where she said you know Security will never be done for one thing it's an economic scarcity problem bad guys attack where you aren't defending you go there to defend and they attack the other place you left behind you didn't have the money to defend but she said also people rush to commercialize things and they never will Design you know some platonic ideal of security by construction they will they will dive in and commercialize and that's what happened with Netscape and the web so so to me the the job again is sort of this diligent standards process of iteratively improving the standards based on what we learn and that stopped

for advertising in particular that stopped the cookie and and image and script were the low-level building blocks no one ever made an ad element in HTML like a tag for advertising no one made a first class tracker tag you know there's lots of ways to track you so maybe this wouldn't have been bulletproof but it would have formalized it in a way that would have allowed more explicit user control of these things and and you know ads are recognizable we block them others others block them but it's kind of a heuristic process based on domain names and sort of uh syntax patterns yeah so you You' really sketched out what what the problem with today's uh exchange like today's ad market and it seems that it's a it's

it's a problem that affects everyone from the person who's reading malware the person who's publishing not being able to get accurate value for their money and um it seems that all of the parties have have this problem so like just sketch out of vision for how you think the future could be different and how like Brave would want the future to be sure so one of the consequences of this accidental evolved system is too many middle middlemen this is what you see in the the way ads are delegated through exchanges you get a alphabet soup of acronyms the demand side platform the DS P the supply side platform the SSP the data management platform the DMP there's

a lot of PS um you get private marketplaces pmps you get you know um optimization Specialists who claim to add a little bit of yield a little bit of more Revenue per per unit of area that the publisher gives up and and at the end of the day they may not deliver but the Publishers are not technically the smartest always they're they're often beholden to their vendors and they're always chasing yield has better Revenue per per you know area and they they get hornswaggled they get stuck they marry last year's vendor then if they get out of that marriage they leave the integration behind and it all piles up into a big slow mess like we see like media sites with 70 calls out when you

try to load the page some of these never finish loading on mobile I mentioned um Rob lean's piece based on New York Time study of half your data plan $23 a month is covering the cost of all these signalings scripts and tracking scripts and and the ads finally when they come if they come uh it's actually worse than that because um when when you get into this um programmatic world now you're you're seeing people having multiple uh what are called header biders different sort of in tags early in the page racing to measure the user and find the best ads of the best winning bid and this is just clogging your network it's costing you data plan um it's it's meaning Pages

never finish loading on mobile and people abandon pages on mobile so uh what we think is a better World cuts out the middle players when you have this system it's already happening a lot of these middle players are going out of business or they're rushing to be acquired by it companies like Oracle CRM companies like Salesforce you're seeing consolidation in the industry and m&a action as you know Venture funded startups in attech which is out of favor with Venture for sure are now trying to to find a buyer um and there's too many of them so it has to shake out a more efficient system just as an engineer looking at it could be done and in fact Brave proposes a more efficient approach where instead of all the middle players that take 55% of the revenue and that's

on a on a good day sometimes they take 60% sometimes they put back fraud costs on the Publishers the Publishers making you know 25 cents on the on the dollar gross ad spend uh take out all those middle players and replace them with the the browser the user agent putting the users data where already has to be on your device not taking it out and surveiling it doing the ad matching in kind of an inverted sense take a catalog or manifest of AD URLs and tags or keywords segment identifiers for each ad think of it as a table with an ad URL and a bunch of keywords for each ad that's a table that can be loaded it can be compressed it can be differentially updated efficiently it's it's different for each region and language in the

world anyway ad deals don't roll out every every millisecond the brave model is to use that downloaded ad catalog to match your intent measured locally using machine learning that only runs on your device using your data that's kept in the clear only on your device we don't see it in our servers find the best ad at the right time and don't jam it into a publisher slot put it in a user private slot this is how quality advertising works on other media this is how you know time shifted television can still do good ads um Joe maresi at uh true X now at Fox talks about this a lot uh ads shotgunning your attention trying to hit you at a website um the ads for the

thing you just bought on Amazon that now retarget you after you have checked out when you don't want to buy it again for a week or a month or a year that's nonsense right find the right time and the right place for the right beautiful ad maybe even a long form ad put it in a user private slot share Revenue with the user that's a key point with brave so that the user is getting the Lion Share if it's in a user private slot and we'll partner with Publishers who want us as a alternative uh to their indirect ads because we're by Baseline Behavior Brave is just a blocker that's the default we're not going to ever insert ads by surprise so if users opt in we'd be happy to partner with Publishers who want a better thirdparty ad vendor because we can do it all on device and

privately I mentioned how the private matching works but the other side of it is when ads viewed or there's if there's an action based model cost per action model you have to attribute the AC you have to have a confirmation signal this too is done with nasty tracking scripts and tracking pixels and anti frud pixels and analytics pixels and today's world we propose using zero knowledge proof protocol we already have this prototype in Brave so that there's no user identifier but there's an authentic attestation of an impression and the only value of the impression is in the aggregate millions of Impressions across an ad campaign where the user identifier doesn't matter unless somebody's running a data rating business on the side so we think we can build a better world with

private matching zero knowledge proof for confirmation ultimately move it on to the blockchain as the blockchain and there are several blockchains working on this innovates to absorb anonymity through Zer knowledge proof protocols and you know find transaction scale so there's not a big fee so the brave appear like the brave Vision appears to be like build a default browser that doesn't have ads right and then uh and then give an opin option to the user that they could op in and actually see ads when they see these ads these users uh get monetarily compensated for opting into this option so that incentivizes them to switch from the non-ad version to the ad version if they so want and in

this particular ad version Brave is uh developing the tool sets to monitor user attention anonymously and also serve as an ad Exchange in some ways yes it's such a unusual model because ad exchanges today The Advertiser puts in the size of the ad and some keywords around the ad and some restrictions and then the the supply side that's the publisher who's supplying the ad slot puts in its dimensions for the ad slot and its constraints on keywords or segment identifiers and the matchmaking process also tries to optimize you know the price the bid for versus the ass because the the marketer is buying the ad slot and the publisher is making

money after all the middle ERS have taken their slices out of the pie sometimes there's not much left in the pie tin um we we want to have a much more efficient system but we still see the money coming in from the so-called demand side the advertising side 72 billion last year on digital ads in the US that's not going away it crossed over television ad spending this year we we we don't think ads can be counted out now we do offer in Brave and we continue to plan to offer the ability to anonymously donate to your top sites even pin a donation irrespective of your browsing so you can always give 10% of your monthly budget which is a voluntary budget you set anonymously to your top sites we don't see the list of sites we again use zero knowledge protocols so we

think donations could matter we just can't count on them replacing ad Revenue suppose Brave got to 100 million users would all enough of those users donate to make up for our Baseline blocking probably not I'd like that world to be true I just can't count on it given the Dynamics of the web how people have been conditioned to expect free content but with when you have a micro pay wall in the browser which is what we built and it's Anonymous now you don't have to sign up at New York Times and ft and I support ft.com I'm a subscriber and wsj.com and you don't have to give your credit card out and actually pay a large annual subscription you can start doing it by the art so you have this model where um the user is is somehow being paid right in

when they um opt into the add like ad enabled version of Brave right and uh some of this money is being is actually coming in from the ad Revenue itself right so the ad Revenue comes in so you can think of it as as like one one stream of uh money going in two directions one is towards the user and one is towards the publisher that uh whose website was served right so and you are basically creating this structure where uh this money can be partitioned into these two two kind of constituencies fairly money from The Advertiser gets partitioned here if the publisher wants to work with us and provide the ad slot again we can do user

private ad slots the WeChat messaging app from uh tensent has a sort of private chatbot based ad model and so we're we're we're not going to wait for Publishers to partner we'd love to and there are some that will work with us we're already working with coindesk uh that's well known we have a bunch of Publishers already taking donations from us they fully verified at publishers. brave.com with our donation system that's in beta but uh if we can do ads and user private slots we can stand those up very quickly and give the user The Lion Share of the revenue like 85% and we don't have to worry about Publishers because we're not taking up their space we're just an ad blocker and the ad slot is a a private pinned tab in your browser could be a full screen full

screen video channel could be a push notifications Channel That's HTML content now it could be a chatbot maybe even some people want one email a day some people still like email we're going to explore all of these we have some user research to do on this but I feel the user private ads slot model is very attractive and can kind of rescue advertising even give long form ads they due whereas jamming in these you know one second of a quarter of the video was visible and that's that's considered an impression uh by Facebook among others that that just doesn't seem like a viable thing to me and it certainly is is not paying Publishers enough to make ends meet that's that's the super interesting so my question is has this ever been attempted before there are

some precedents they are lost in the midst of time you can read about all advantage in Wikipedia all Advantage was a PC app from the PC app era um kind of like native apps before smartphones because it did things like used your email contacts with your consent to promote itself to your friends and family and that that got it in sort of spam trouble but it wasn't technically spam I think its Founders even helped reform Federal anti-spam law so that they they weren't wrongly accused of that but all Advantage went up like a rocket during the Doom era and crashed with the do crash but it did pay users a share of the revenue it put ads in a strip I think was along the bottom of this PC app and it had publisher content like news content to read independently

of those ads so we we seek inspiration from all Advantage it it's controversial and because of this um Amway like friends and family mail promotion that was mislabeled spam but I think it didn't get a fair epit I think all Advantage was doing some things right and it just suffered the Doom crash and the uh the sort of anti I don't like being mail by my relatives too often either so I understand even if it's not spam it might be annoying um there are you know ad inserting toolbars that are generally considered scum wear or actually worse they're trying to put malare on your system those are a bad precedent that's why Brave has steered a course to be a baseline blocker and anything we do with ads will not only be opted it will involve a separate open- source code module download a component

module so we're not trying to bundle any of this ad stuff with Baseline Brave we want to keep a very clean uh bright line between you know opt-in ads uh open source auditability zero knowledge proof ad matching in private on your device all that aside we understand people are nervous about ads so we're going to keep that as a separate opt-in bundle so the fundamental problem is you have to invent a new ecosystem for digital advertising and the tool by which you have chosen to attack this problem is a browser right if you're coming it from from the browser side was there any other option available like not to come from the Brower side comes from some other side what else was is possible

people think oh he's just doing browsers again because I do browsers I'd like to do something that was easier to deploy it could be a network proxy like Opera Mini is a proxy that actually can do some of the things we talk about doing um doesn't use open source or blockchain but um the problem with doing something in the middle of the network is TLS the secure connections we take for granted with our banks uh the so-called secure socket layer of the 90s is now called transport layer security TLS and that's the htps URL scheme it's the lock icon or whatever the browsers do that the banks copied into their own pages to mislead people um but it's important and it's rising with let's encrypt the free

certificate Authority the number of uh of connections that are not secure is just dropping and will continue to drop to under 10% and as this happens in order to do anything interesting with the data that's in Flight you have to do something pretty evil called man INE middle the connection you have to decrypt the connection in the cloud or in a proxy in on the path to between the client and the server the browser and the the the the TLs using server and you have to put it back together encrypt it again and Forge a certificate on behalf of that server that you you could then fool the browser into thinking is the real server this is a nightmare even if the person doing it is trying to do it

for good reason like anti virus companies try to do this they try to do this even locally on your machine and they botch it all the time Tavis ormandy at Google's Project zero found I think kasperski was doing something where they were matching only the first 32 bits of a public key when they were doing a hash qualification and so they they would a different certificates and he actually found a site in Rochester New York that aliased the same public key prefix as Hacker News and he showed this a live demo of this certificate confusion caused by this man in the middle bug and that's that's like the best case it's kind of comical it's not it's not good but there are worse things that can happen you can be totally open to attack the man in the middle can see all your

data can leak um it could be a bad actor it could be that by forging the certificate on the leg that goes between the men the middle brow proxy and the browser you're actually um opening the browser up to more attacks because other certificates can be forged uh this was an issue with Lenovo superfish and Dell Dell's superfish too yeah it seems pretty clear that the the browser is the right way to to address this problem because you just otherwise you just introduce uh uh other other layers that can be compromised browser where TLS terminates and TLS gives you message integrity and confidentiality these are important endend properties if you break that you're opening up security holes and so yeah I ended up back in the

browser I do you know acknowledge that the trade-off the equilibrium we talked about on mobile between apps and browsers doesn't exclude web views that are in apps but the web views are always embedded by each app on its own so we haven't got a brave web view on offer yet but if we get our Revenue model going we can probably fund and maybe even share Revenue with the apps to start getting them to say instead of using the native web view which we use too we'll wrap it with brave uh behavior and we'll share with you so it's possible it would take years to conquer the long tale of apps that embed web views and have a a better story I don't know if you use web using apps I do and it's always annoying because it's a kind of a mini browser it's not good it

doesn't have the same cookies as my main browser it doesn't remember me it doesn't have all the affordances I want so I think there there's an ongoing problem on mobile but we can conquer it because the the browser still matters especially for lead users so you know people also say while you're doing a browser good luck against Chrome but actually because you're spending $23 a month on trackers and signaling and ads people have figured this out and they're kind of annoyed and if they use Chrome they have to get an ad blocker and then there are ad blockers that actually let ads through they say they do it you know just playing Robin Hood just to take a fee from the the rich and help you sustain themselves but it's never clear that they aren't doing it just to get the money and and the ads themselves are

unacceptable to you so getting a good app blocker like U block origin which we admire on Chrome Chrome is challenging not every user is going to do it um ok's done well in the last year but you know it it will it go mainstream and it's it's always kind of captive by its host browser is ublock getting all the apis it needs on Chrome to block everything efficiently is ublock actually unable to do things because it's a JavaScript extension running in a sort of sandbox that web extensions run in on Chrome uh Chrome extensions running um we do Native code we we go full stack on the client side so we can do very detailed blocking very efficiently we can avoid the memory head of JavaScript which is a garbage collected

language so we've talked about the brave browser and and so the the the key problem that it's addressing so we you mentioned uh that the ideal way to to to solve this problem would be to have exchanges and so where Publishers uh can have ads be displayed on browsers directly uh in the user's browser and there there are no middlemen in this in this operation so you know moving on to the next topic before we wrap up because we know we have we know that you have to be uh get going because you're in New York and heading to the Token Summit pretty soon um talk about the the basic attention token what is the model there and how do you how does how do you plan to break this this toxic model as you've

described it uh with this new exchange platform we're doing a token launch on ethereum uh and we're trying to reboot the sort of AD exchange onto the blockchain it'll take multiple iterations where we use some combination of of our own zero knowledge proofs and uh sort of accounting servers eventually put it on the Chain when the zero knowledge Tech is ready and the transaction cost is low um so I I like to use the space program metaphor we're going to do the the Mercury Redstone that goes suborbital we're going to do the Mercury Atlas that orbits the earth we're going to do Gemini where you learn to dock spacecrafts then we'll go to the Moon if you try to build the Saturn 5 rocket in 1959 it's going to blow up

you're not going to make it to the moon or even to lower Earth orbit so in our first iteration with this new token we will be working on those user private ads to share Revenue with the user and we will be staking users who opt into this program with some tokens this is hard to do with existing cryptocurrencies because somebody has to out of the grace of their charity give away those tokens to the user and I haven't found my rich Bitcoin friends eager to give away millions of dollars of tokens to fund our user growth pool so by doing a token launch we can just you know by Fiat stake a user growth pool with in this case 300 million tokens we're selling a billion tokens and there's 200 million more in six-month lockup for development team

and Reserve so that's a novel thing uh that's sort of a social credit currency idea or little bit like a basic income Grant we think users should have some tokens out of the gate if they opt into the system they've been abused for years by advertising we want them to have some change jingling in their pocket we want them to feel like they could donate it they could keep it if they want um and then if they've opted into this ad program the token flow will allow us to share Revenue with them and that also uh will be transacted uh initially through Brave in a way that's Anonymous and efficient and as we iterate on it we'll try to get it to the moon which is the ideal of decentralized onchain real-time flows with Revenue sharing

what's the basic utility of token to to the user so the utility is for the advertiser to buy an ad slot let's say it's this user private ad slot so we don't have to partner with Publishers we can do that too and share Revenue with the Publishers and that will be a better share because we cut out the middle players we're only going to take 15% we're not trying to take we're trying to make a viable business here not not take too much money out but but with the um and with the donations by the way Braves prototype that we take 5% we'd like to take less we just don't know what it's going to cost us because we've been developing the servers we have to do some kyc on the Publishers because that's where the money flows out of the system um you know there's some costs

there to cover but we're not taking a huge amount of money out and so whether it's a user private ad slot or a publisher adlot we're going to share most of the revenue with somebody else user or user and publisher um so the utility of the token is to buy ad slots and that the only way to do that in this system is to have tokens so that's that's you know I'm I'm happy to hear from one of my friends in adtec that his friends at a big agency actually are are looking to purchase tokens in the crowd sale so I'm hopeful that that will help us get to trial with that agency sooner and they will do trials even though we're we're upand cominging browser we have enough of an interesting audience that's ad blocking audience is cut off from normal adtech is a generally a

Smart Set who does do a lot of e-commerce online does spend money on things but just doesn't like ads if if some of them opted into these Anonymous ads and get a revenue share we think that'll be a productive uh use of marketing dollars and that's what we want to build into a an advertising business at scale I'll say one more thing that should be tantalizing about this business if we're studying with machine learning you opt into your behavior in your browser and that that data and the results of the studies stay on your on your browser we can study things like your search queries super hot intense signal something that search engines take for granted those queries belong to you we're not going to scrape the result page from Google that's their business we're not going to do anything

with their ads we leave those alone because they're first-party ads and actually the Google search ads are still pretty good it's the Google links the organic links that actually track you off the search page so we have a pretty bright line between first party ads and third party ads but your search query log belongs to you and that goes into the machine learning for this new ad system so uh I'll try I'll try to sort of describe describe it in in in in in my way so so what I'm trying to describe is sort of uh Brave attention token when you're buying a brave attention token what what are you really buying right I'm trying to put put that thought into into words right so disclaimer first of all all tokens in my opinion are

speculative but I'm trying to explain what the way I think of Brave attention token sure in in some respect like Brave is a is a very could be a very unique browser play because because unlike normal browsers there seem to be some kind of network effects around a brave browser right so when you have a normal browser it's like when I download the browser and I use it to browse the internet my usage of that normal browser does not improve does not impact Sebastian's usage of that browser so so there isn't a natural network network here but what you're doing with brave is because you have this this ad exchange right so the more the number of users that use

Brave the more valuable it is for Publishers and for advertisers to be part of that brave browser Plus ad exchange Network right right so it's like Brave is a brave is a browser system in the beginning but it's it's like it's like an ecosystem of browsers that has a network effect I'm glad you mentioned that because by the way we call it the basic attention token we would like other apps to use it too if the crowd goes well enough if it goes to the max we will fund and try to get IRS approval for a nonprofit trade Association we will try to bring in other browsers games which games have a lot of inapp uh ads attention-based ads uh and messaging also involves add

opportunities so we think attention economics has been badly done through this parasitic system that evolved and we'd love to bring in other apps and share the token with them so we think the token could be become quite valuable and of course it can be divided into micr tokens over time you know down down to the the Precision that ethereum allows so um we think it could go the distance it's not just about Brave if it is attractive to Firefox I'd love to get them using it they'd have to block if people opt into it they have to block things to avoid Arbitrage and gresham's law problems uh if Microsoft Edge which is also not really get growing in the market even though they're forcing it on people in Windows 10 if that is of interest to Microsoft I'd love to have

them join this trade Association and and games uh we're already talking to some of the the big game advertisers I won't mention whom so there there's just a lot to do here if the crowd sale goes well it's it's going to be bigger than Brave we'll get scale with the advertisers faster that way but we can we can start with brave and brave will be the the way we prototype and start the engineering and as the trade Association comes up I hope we'll then be able to sort of build standards that become go from de facto to dour they can go into the w3c we can get those standards I mentioned we lost when the web stagnated after IE monopolized it where you have standards for things like not just ads or payments or uh Anonymous payments you can have

Anonymous intent signals you can have uh third party cookie blocks that are not gainable uh you can have a higher level of discourse on the web standards about user attention so given the the monolith that is the online advertising agency I don't know I don't know how to put numbers on it but it it's a massive industry with a lot of layers a lot of players uh a lot of incumbents uh you know immed I think of companies like Google that have a massive footprint on just about any web page that you visit in terms of AD space what do you think makes Brave and the basic attention token a viable solution

and what you think can help take Brave and the basic attention token to massive adoption and basically just turning the model on its head great question so one of the things we're trying to do we've only prototyped the donation to Publishers who can use a challenge response protocol to prove they own their domain but we designed a system to go into the path part of the URL so we can actually help twitch.tv and YouTube account holders get donations or get Brave Anonymous ad re Revenue shares and that's that's a powerful idea because you may have seen a lot of YouTube YouTubers are unhappy that they're not getting the ad Revenue they used to some of them are being censored or cut out completely you you

may have noticed the advertisers I think this was a pure negotiating tactic made a a big stink about their ads being placed next to objectionable videos on YouTube um definitely part of negotiating tactic could be a brand problem too but you know it wasn't just brand safety they were also trying to get some leverage with Google so we can go to those Brands and give them interesting audience growing from hundreds of thousands of users to millions of users especially if we band together in this trade Association and I guarantee you these brands that advertise will be interested they're always looking for a new way to reach interesting audience it isn't just about they only do Facebook or they only do Google and that's it they they try multiple ways they're always flexible I

think they're the most um flexible part of the system the Publishers unfortunately in my experience are slower to change are less technically Savvy and are going to be late to the party but we will we will get the buy side the demand side so-called the advertisers the brands uh going and we will try to do it with things where the the other side the supply side like the Publishers who are really YouTube account holders just individuals living in the the domain of YouTube but doing their own thing can be reached and try to make a match there so there was a there was a crowd sale starting I think in a couple days after this AIS uh 530 1 May 31st May 31st okay so anybody um interested in that of course uh we're

not giving investment advice you should always do your own due diligence before investing in any Ico or crowd sale um so Brandon I think I think you have to go uh we don't want we don't want to uh over impose here so uh appreciate it again thank you very much for coming on it's been a pleasure uh we could probably go on for another couple hours I mean I wish I could have picked your brain on all the work stuff at the beginning uh but hopefully we can have on again at some point and uh and maybe with a bit more time so thank you so much and uh have a good time at uh at token Summit thanks thanks appreciate it thank you both and to our listeners thank you for once again for tuning in we are part of the let's talk Bitcoin

Network you can find this show and lots of other great shows at let's talk bitcoin.com if you want to support the show there's multiple ways you can do that uh I mean of course you can watch our ads uh and maybe buy the products of our advertisers but you know uh that's totally up to you uh you can also leave us tip uh that's a more direct way of of supporting the show The Tipping address will be in the show description and also you you can leave some iTunes review uh or leave your review wherever you get the podcast so thanks so much and we look forward to being back next week [Music]