Amazing, I waited a long time for this!
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What is your use case? Or is it only to cloak from your isp?
Would this be able to block ads in YouTube?
No (youtube ads are served in the video stream)
Ads are not built into the video stream yet. But ads came from the same domain as video so you can't block ads using DNS blocking.
How does Newpipe work then?
I guess they pull the video from some api YouTube has open?
But YouTube.com servers ads directly
Great news
Ok, now I'm considering getting AppleTV.