Interesting update on Twitch cheering, it seems Twitch takes their cut upfront as part of the purchase price. 1 bit = 1 cent to streamers. If you do the math on that it confirms a 71/29 split, however this split increases in favour of the streamer the more bits are bought at once. The best available split appears to be 81/19 in the streamers favour, when the largest pack of bits is bought (that pack is also $300 but... that aside). This is a fairly interesting situation. When we talked about the concerns streamers had that Twitch donations would be worth less than a regular donation on Paypal (at least if that donation was higher than about a dollar, Paypal fees make it worse if its smaller), that was assuming that every bit donation would THEN have Twitch take a cut of it. Now if one were to assume that every single dollar spent on bits would have otherwise gone in full to a streamer, then its still a worse deal for the streamer, but that's a big assumption and does not factor in the different spending behavior that a microdonation currency encourages. What I think it going to happen with this is that we will see the pool of donation money spread across a wider number of channels, rather than concentrated in a small number, due to the ease of giving a microdonation multiple times across multiple channels rather than a lump sum donation to one. In theory this would make the Twitch ecosystem healthier and more sustainable for smaller channels, while it may potentially dent larger ones. As a larger channel however, I can safely say, we're doing just fine, whereas many smaller channels are struggling to make it full time. If the system ends up benefiting those channels, I think it's a good thing overall. I also still maintain the opinion that we will not see anywhere close to a 100% cannibalisation rate with this system. Many people are going to stick to using regular paypal donations to support their favourite streamers. What we may see is an increase in the size of the market as people who were otherwise not willing to donate, decide to do so with bits instead, due to it's gamified nature and the ability to donate lots of times in small amounts. You can argue that this is manipulative of Twitch, which has some merit. That said, one can't handle consumers with kid-gloves, it's ultimately their decision as to whether or not to give money to a streamer. They're certainly being encouraged to by seeing others do so and earning these "prestige badges" for it, but it's still their decision to do it and we can't take that agency away from people, it's insulting to their intelligence.

It's also worth noting that an additional benefit of this system is that it appears much less vulnerable to fraud and chargebacks, which have been an increasing problem for streamers as of late. Twitch can take more direct action against such things as a result of having more direct control of the flow of donations, rather than relying on a third party that they have no influence over.

Just some food for thought. We've had a lot of people ask whether or not we'll use this. Our policy up to this point has been that we don't take donations. That policy hasn't changed. There is a strong argument when ti comes to leaving money on the table unnecessarily, especially with my medical expenses and such, but I still don't feel comfortable taking donations. We run a business and we try to act like it. This is all assuming that the system is opt-out. It may very well not be, in which case I'd strongly encourage you to give you money to someone that needs it, such as a great cause like Charity.Water