See this comment in an HN thread from about six months ago, where Brave developer Jonathan Sampson explains the system (as it worked at that time, at least):
> The user opts-in to Brave Rewards/Ads. This kicks off a machine-learning model that begins to study the user's habits and interests.
> On a daily basis, the user downloads a regional ad catalog (as to other Brave users in their region). This catalog contains numerous ad options, which your device studies for relevance.
> If/when your device identifies an ad within the catalog that might be of interest to you, it displays the ad as an OS notification. At this time, 70% of the ad revenue is deposited into your in-situ wallet.
> At this point, the user has made absolutely no contact with an advertiser. If the user chooses to click on the ad, it is opened in its own tab in the Brave Browser. This tab, like all others, is subject to Brave's default security/privacy settings. No third party trackers, etc.
> The advertiser will know that you are interested in their product/service, because you clicked the ad. But no other information about you is given to them; only what can be inferred from standard first-party browsing online.
https://news.ycombinator.com/item?id=20831014
For convenience, I'll also quote it here:
> The user opts-in to Brave Rewards/Ads. This kicks off a machine-learning model that begins to study the user's habits and interests.
> On a daily basis, the user downloads a regional ad catalog (as to other Brave users in their region). This catalog contains numerous ad options, which your device studies for relevance.
> If/when your device identifies an ad within the catalog that might be of interest to you, it displays the ad as an OS notification. At this time, 70% of the ad revenue is deposited into your in-situ wallet.
> At this point, the user has made absolutely no contact with an advertiser. If the user chooses to click on the ad, it is opened in its own tab in the Brave Browser. This tab, like all others, is subject to Brave's default security/privacy settings. No third party trackers, etc.
> The advertiser will know that you are interested in their product/service, because you clicked the ad. But no other information about you is given to them; only what can be inferred from standard first-party browsing online.