For example, 100 bits currently costs $1.40. The 40 cents will go to Twitch and then the $1 is the bits. A streamer is required to pay taxes on all income, regardless of it coming from Subscriptions, Bits, or PayPal donations. Bits are a known quantity with no risk, whereas PayPal comes with a bit more risk.

Last Updated on June 30, 2020 by

Tipping a favorite broadcaster usually comes down to two methods: bits and PayPal donations. Either is a good system to use, but what’s better for the viewer and the streamer? Today, I’m going to give you a quick break down of Twitch Bits vs Donations.

There’s actually quite a bit involved when it comes to giving broadcasters tips. And personally, I tend to side with direct donations to the creator.

Let me explain why…

Inside money, markets, and Big Tech. As Twitch user iNexusNinja made a $250 donation, only to follow that up with several more, totaling $11,500. INexusNinja then went on to shower other.
Twitch Bit Donations - $316,354.92 Average Sponsorship/Product Placement - $600,000 Average Estimated YouTube Revenue - $36,000. In total it makes a total budget of $5,417,447. Pretty good, right? No doubt, Ninja is a top Twitch streamer and it is difficult to surpass this popular Twitch celebrity.

Twitch Bits vs Donations

Fees to You, the Viewer

Twitch Bits vs Donations

So, I’m not going to go into subscriptions and how they work. This is purely a comparison between the differences of Twitch Bits and donations. Subscriptions are a whole other animal that I’ll tackle in a future blog post.

When it comes to picking the best tipping method, I’m not saying that you should absolutely choose one over the other. However, it’s best to keep an open mind when deciding which route you want to take for showing financial support.

Let’s take a closer look at the difference between bits and donations as well as which is better for you and the broadcaster.

Which is Good for Beginner Streamers?

Many people will start a Twitch channel in the hopes of becoming popular. There are a lot of people who will donate to keep certain broadcasters online. And this brings me to my first point.

How beginner streamers do not have access to Twitch Bits.

Before you can give bits to a streamer, they need to have more than 50 followers, have more than three concurrent viewers throughout the month while showing dedication to streaming.

In other words, you need to be an Amazon Affiliate before you can benefit from bits. For some people, this could take an incredibly long time.

Although lurking may help streamers surpass this requirement, it’s still something that often results in frustration and a lack of dedication to keep streaming.

After all, most lurkers don’t donate or interact with the broadcaster. In essence, it’s like turning on the TV and walking out of the room for the sake of having it on.

Direct donations, on the other hand, puts the money in the hands of the broadcaster almost immediately. They don’t need a single follower for someone to leave a “tip.”

In reality, it only takes a person several minutes to connect a PayPal account to Streamlabs. This greatly helps guide the process of leaving a donation. And PayPal isn’t the only payment acceptance method supported by Streamlabs.

My point is that direct donations are far easier for the new streamer to collect than Twitch Bits.

Donations On Twitch Setup

The Waiting Period of Twitch Bits vs Donations

Like other systems on the Internet, there is a payment threshold for Twitch Bits to be paid out to broadcasters. At the time of this article, that threshold is about $100 in actual cash value.

This breaks down to around 10,000 Twitch Bits. That’s because bits are close to $0.01 each in value from Amazon – the owner of Twitch.

With a donate button through Streamlabs on a Broadcaster’s channel, the payment is almost instantaneous. This means the streamer isn’t faced with a “waiting period” to get the money you just donated.

For instance, if you tipped a streamer 100 bits to show support, he or she will have to wait until the $100 threshold is hit before the broadcaster sees that money.

Now take that same $1.00 donation through PayPal, the money is transferred almost immediately. This means the broadcaster has access to the funds when he or she wants.

It’s quite possible to have Twitch Bits sitting in limbo forever until it hits the $100 payout threshold. And even then, the payout is the next month. Which means the streamer also has to wait several weeks after the fact.

Fees Streamers Will See

Fees are probably one of the few elements that are comparable between donations and Twitch Bits. Depending on the total amount of the donation, either system is better than the other.

Let’s break down various cash amounts so you can see what I’m talking about. In this example, I’ll assume the streamer is using Streamlabs with PayPal in comparison to Twitch Bits.

Given Amount	Twitch Bits after Fees	PayPal after Fees
$10.00	$9.30	$9.41
$50.00	$48.50	$48.25
$100.00	$98.50	$96.80

This is based on the 2.9% + $0.30 per transaction of PayPal and the 2% up to $1.00 + $0.50 per transactions from Twitch. And that’s if you’re based in the United States. Outside the US, Twitch increased the fee of 2% until it reaches $20!

Unfortunately, I don’t know if PayPal charges its fees on top of Twitch during a payout simply because I’ve never had one from Amazon. Usually, I just get direct donations through PayPal.

In the grand scheme of things, I don’t see tips or bits reach more than a $10 value in any live stream. This means monetarily the streamer receives more value through direct donations.

In this instance, the case of Twitch bits vs donations sides with PayPal.

The fees the streamer pays is a bit better through Twitch Bits. However, many people like myself would gladly trade the fees if we got money instantly from Twitch.

Then consider how you have to hit $100 within Twitch for a payout anyway. I’m not sure if these fees count per user or per payout. In either case, I’d still rather sacrifice the $2 in extra fees if it meant getting money right away.

Fees to You, the Viewer

When you donate directly to a broadcaster with a PayPal donation button, you are not liable for fees. This means the $5 you want to give to a broadcaster will only run you $5.

Twitch Bits are a much different animal. Let’s say you wanted to donate $5 in Twitch Bits to a streamer – which is about 500 bits. To buy the bits from Twitch, you’ll pay $7 for 500.

Now instead of paying $5 to the streamer, you’re forking over an additional $2! However, you can get free bits, and I’ll explain a bit of that in a moment.

Then the broadcaster suffers the fees at the end during a payout, if he or she hits the $100 threshold, as stated above.

No matter how many bits you buy, you’re still giving more money to Amazon than you would otherwise through a direct tip.

And for what? Some “cheer” emotes that no one really sees in a very popular channel because chat is scrolling by so fast. It’s not really worth it, in my opinion. I’d rather give the money directly to the broadcaster.

So the monetary transaction between yourself and the streamer is far worse using Twitch Bits than direct donations.

That is, unless you accumulate some free bits for cheers.

Earning Bits for Free

Now, you can earn free bits for watching ads on the desktop platform of Twitch. Essentially, you click on the “bit” icon and click the “Watch Ad” button.

Unfortunately, this only applies to those in the United States and on a desktop or laptop computer system. So, for someone like me in the US, watching ads can help accumulate a few bits to cheer on my favorite streamers.

This is a viable method if you really don’t have the money to buy bits outright. It only costs a bit of your time.

Safety and Security

When it comes to safety and security, both systems are about equal. PayPal, Streamlabs and Twitch all use excellent methods to prevent fraud and hackin

Is Twitch Donations Real Money