For many, tipping a favorite broadcaster comes down to two methods, bits and PayPal. 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…
Twitch Bits vs Donations
So, I’m not going to go into subscriptions and how they work. This is purely a comparison between 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.
Practicality 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 a month and show dedication to streaming.
For some people, this could take an incredibly long time.
Although lurking can 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.
The Waiting Period for Twitch Bits
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 after Fees||PayPal after Fees|
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. I’m not an affiliate yet, but I’m getting closer.
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 for 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 now.
Besides, any of these fees may be tax-deductible if you turn it into a career depending on your location.
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 hacking. I’m not saying it’s impossible, but you’re more than likely equally safe no matter which route you choose.
I’ve been using PayPal since 2003, and I have never had a problem with the system. In fact, PayPal’s customer support has always been a blessing. Unfortunately, a lot of people may say otherwise.
I can only tell you how the system has worked exceptionally well for myself for more than a decade.
And as for Streamlabs, the site uses pretty much the same security measures as most eCommerce sites. If you’re comfortable with online shopping, then you have nothing to worry about from this third-party interface.
Which is Better to Give?
What it all boils down to with Twitch bits vs donations is the actual exchange of cash. Twitch Bits are simply a way for Amazon to capitalize on what they see as a real money-maker for online streaming.
And I can say that it’s a brilliant strategy.
However, I prefer to go the direct route. It costs less for me and gives the broadcaster the cash almost immediately. And since I rarely have more than $10 to donate at any given time, the streamer gets more of the money.