At a recent interview, the Ammit Mahajan, the co-founder of Rare Bits, an Ethereum-based digital asset marketplace, revealed they had raised $6 million in a Series A Funding round. Twitch CEO Emmett Shear, founder Justin Kan, and Spark Capital had led the round.
Why Twitch Is Interested In An Ethereum Marketplace
Digital collectibles such as CryptoKitties are embedded into the Ethereum blockchain as smart contracts. These contracts can be transferred out of the CryptoKitties app to platforms such as Rare Bits, where they can be traded with investors.
Rare Bits first came to fame in the crypto world after CryptoKitties users, started to sell their digital kittens on the marketplace. CryptoKitties is quite similar to Tamagotchi, an old Japanese game. The only difference is that users of CryptoKitties can buy and trade the in-game items.
For years, the gaming industry has been in search of a way to trade in-game items. Platforms such as G2A, GameFlip, and PlayerAuctions have tried for years to help players buy and sell in-game items such as rare finds, gold, in-game currency, and skins.
Besides being a digital content distribution platform, Twitch is a company with a focus on the gaming industry. It mainly supports gamers and streamers. This is unlike platforms such as YouTube, whose focus is on a wide array of content creators.
It is likely that the possibility of trading the in-game items on the Ethereum blockchain is what has attracted the Twitch CEO and founders to investment in Rare Bits. They clearly think that Rare Bits has a chance at becoming a successful auction platform powered by the blockchain.
During an interview on CNBC, the founder of Rare Bits said that he had the goal of ensuring the platform would trade in non-crypto products in future. This trade would involve things such as backstage passes and second-hand items, just like eBay. In essence, he aims to attract people from outside crypto to the platform. For them to bring people from outside crypto, Mahajan said that they would need a special incentive.
How He Will Compete With E-Bay
Mahajan said that most people who have no interest in crypto would never go out of their way to buy Ethereum. However, if someone knew that a major celebrity such as Beyoncé was going to release backstage passes on the Ethereum blockchain, it might get more people interested.
Mahajan said that he had a goal to get the Ethereum and blockchain tags dissociated with Rare Bits and to end the barrier between crypto and the masses. In the end, he said that they might never even have to mention that they utilize the blockchain or Ethereum.
However, there is still a risk for a drop in the niche market in the crypto sector to take on the wider market. To ensure they can meet their goals, the platform will need to ensure the platform will operate as efficiently as possible and to match the speed of central platforms.