so what the hell are twitch bits and how is it in any way different from just...directly donating money to a twitch streamer?

it's funny money therefore people's brains short circuit trying to deal with it

same reason xbox and nintendo fucked with 'points' for so long

from what I understand it's like
a gift card
for donations

you then use an emote to deduct your bits to donate to a streamer

you type it in their chat and different emotes represent different amounts of bits, which get deducted from your account and 70% of what the dollar value of the bits goes to the streamer, the rest to twitch

each bit is worth 1 cent to the streamer btw

So.

apparently it's a way to 1. formalize Twitch's donation economy 2. promote the microest of microstransactions to donate 3. a low effort donation method 4. gift card economy

You buy the stuff from twitch, give it to a streamer, but twitch gets 30% of what you give to the streamer?

yes

idk how much twitch gets from just straight up donations btw

Apparently, they don't get a cut from direct donations, just paypal and the service.

two months ago they also handed out bits to people who watched ads who could then donate them but they removed that

ah I see I had confused donations with subscribers

and it seems that most streamers have moved away from Paypal in favor of streamtip

oh wait it still goes through Paypal it just avoids the messy tips vs donations issue