Silicon Valley-based blockchain startup BitClave is holding a presale of its tokens today in advance of its September initial coin offering (ICO). The company’s goal is to enable a “decentralized” form of online search. Instead of running a search via Google and letting Google intermediate (give your data to advertisers and pitch you appropriate ads), for example, you could search via BitClave and receive payment for the data you’re willing to share in exchange for targeted ads.
In other words, BitClave wants to make it so you, not Google or Facebook, can manage and sell your data.
Users would opt in to advertising through smart contracts offered directly by advertisers. Smart contracts are self-executing and run directly on the blockchain without involving an intermediary. So once the blockchain has confirmed that a user has viewed an ad, the contract would automatically release payment to the user’s account. (Advertisers could also set the contract to release funds even if a user chooses not to view an ad and use the viewed/not-viewed data to determine which users are worth targeting again in the future.)
The technology would not only be a reinvention of search but could also solve the ad-blocking problem that has been making it hard for publishers to profit from their content in recent years. With users able to profit from viewing ads, there is less incentive to block them.
It’s a very interesting experiment, although to successfully pit itself against search behemoth Google, BitClave will need substantial backing and some momentum. The volume and speed of its presale raise will provide a sense of how the blockchain community feels about the company’s chances of success.
BitClave isn’t yet announcing any numbers related to the current raise, but transaction volumes were “off the charts” when it opened its presale at 4 a.m. Pacific time, CEO Alex Bessonov told VentureBeat. “There’s a lot of excitement from the [blockchain] community about what we’re building,” he said.
He added that BitClave has been getting calls from traditional VCs interested in participating in some capacity. “The advertising industry has become monopolized. People are looking for new ways to create competition in the market.”
One commenter who works in ad tech sees little future for the technology, however. BitClave’s model of “incentivizing users to part with their data and move away from the traditional ad revenue model is nothing new and has been tried many times,” James Collier, chief revenue officer at Rainbow, told VentureBeat. “Ultimately, it’s very difficult because consumers just don’t really care about their data being used in the first place and the cash rewards tend to be very insignificant.” He said the real problem lies elsewhere: “Hyped-up trends like blockchain only get in the way of solving the real issues that publishers, brands, and the industry as a whole should focus on.”
But Bessonov argues that people do care about sharing their data — especially in Europe, where the new GDPR data privacy law goes into effect next year. “As people are more aware of what’s going on with their data, they’ll care more,” he said. “Blockchain does show a lot of very promising applications already. It is a technology that allows you to compete with big companies and build ideas on the power of math.”
“There’s a lot of interest around ad-based blockchain tech,” agrees Sid Kalla, of cryptocurrency research group Smith + Crown. He cites BAT (Basic Attention Token) and adToken as other examples. “But none has enough concrete details as yet to know if they can succeed. Search is a really hard problem to solve from scratch.”
BitClave’s token is called CAT, for “consumer activity token,” and the service will run on the Ethereum blockchain. The company has set a soft cap for the presale at $1.5 million. It expects to release an alpha version of the product by end of summer, Bessonov told VentureBeat.
Bessonov, who was previously chief security officer at LG Electronics, also mentors at Draper University, a Silicon Valley startup bootcamp founded by well-known VC Tim Draper. (Draper’s name has been coming up a lot lately in the blockchain world, with his investments in Credo, Bancor, and Tezos.)