Twitch announced Monday that users would soon be able to “cheer” (it’s in quotes because it’s the official term) their favorite streamers — in the form of expendable emoji purchasable with real-world money. Interesting news, to be sure, but I was curious about the details of how these “bits” you could cheer with equated to real-world money for the streamers themselves.
I pressed them relentlessly with many hard questions until, many hours later and almost certainly unrelated to my curiosity, Twitch spontaneously (and at midnight) announced additional info on the whole bits situation. It’s taken me more than a hundred words to get there, but the conversion rate is one penny per bit — which, really, was obvious to begin with.
Notably, that’s well below the acknowledged rate for bits — one used to be able to get a shave and a haircut for two bits, or 25 cents.
Twitch’s “follow-up FAQ” hits a few questions that arose following the original announcement. No, Twitch is not planning on making bits the only way to support streamers, which some users feared – “We have no intention or plan to remove or block 3rd party services or tools.” Think PayPal-based donations or Patreon subscriptions.
The phrase “exchange rate” probably doesn’t apply exactly, but that’s the easiest way to put it regarding bits: streamers receive “a share of the revenue Twitch receives from Bits equal to 1 cent per Bit used to Cheer for them, subject to certain terms and conditions…” etc etc. One bit is equal to one one-hundredth of one U.S. dollar — regardless of whether it is a bit bought in a pack of a hundred or a hundred thousand, or acquired in some other way.
How does that look for bit-buyers? Well, $1.40 bought you 100 bits, which was how I came to my mind-blowing prediction that, at this cheap and high-margin level, a bit was probably equal to a penny for the streamer and Twitch pocketed 40 cents on the transaction. Expect similar but diminishing returns for the company for larger packs of bits, as with pretty much any other virtual currency exchange.
Will this, as some users fear, lead to a complex tipping economy whereby a Dark Souls run will have bit-accessed tiers for viewers? 1,000 bits, no shield — 10,000, no armor, and so on? Probably. Well, you can always opt out and just support a streamer or creator monthly — those animated gems are a bit gaudy anyway. But it’s also a nice, spontaneous way to support someone working hard at entertaining you and many others, so don’t hate.