- Rare Bits is similar to eBay, but with cryptocurrency transactions
- Co-Founded by creators of games like Farmville, Rare Bits has a strong leadership team in place
- Eventually, Rare Bits could be a marketplace for things like tickets, licenses, even real world items
Times they are a changing, and the future looks mainly digital. Rare Bits, which launched in February of this year is hoping that digital collectibles will be the next big thing, and also that they won’t go the way of beanie babies.
Do Digital Goods Exist?
This isn’t the first time that digital goods have been bought and sold. Players of multi-player online games, think World of Warcraft, have been buying and selling digital goods for years. The problem with those platforms, however, says Rare Bits is that the digital goods don’t actually belong to the players who purchase them. That’s because those digital goods are dependent upon the game, and the game’s servers in order to exist. That means that when those games shut down, or when the company bans a player from the game, all of those purchased digital assets disappear, with no compensation to the consumer.
Cryptocurrencies, like Ethereum, change all that. Several months ago CryptoKitties hit the market and quickly drew interest. That’s because those digital cats or any digital goods purchased with Ethereum or other blockchain currencies actually belong to the user that purchases them. Even if the CryptoKitties site disappears, the digital cats purchased by consumers still exist.
Why Rare Bits is Different
With blockchain, those purchases aren’t reliant on a specific server, so if CryptoKitties disappears, another site can be built to replace it, and the digital items stored in the blockchain are still owned by the consumers who purchased them. That permanence is what Rare Bits says makes this technology so exciting, end users can actually own digital goods without being reliant on an outside network or company to maintain their ownership for them.
Rare Bits isn’t just going to be about digital trading cards, according to Mahajan, the company sees the technology eventually being used to sell licenses, tickets, intellectual or other rights, even tokenized physical goods. Right now though, the company will be trying to convince the average consumer to give cryptocurrency and digital goods a try.
“Our ultimate goal is to convince millions of new people to begin owning and transacting crypto-based property,” he told TechCrunch. That doesn’t mean the Rare Bits is going to focus on educating users about cryptocurrencies.
Follow the Money
Already interest is strong, with $100,000 in transactions the first month that Rare Bits launched. The $6 million funding round was led by Spark Capital, and First Round Capital, Craft Ventures, Twitch CEO Emmett Shear, and SV Angel along with others participated.
It’s no surprise that Rare Bits raised $6 million either. CryptoKitties recently raised $12 million. The company which is billing itself as the eBay of digital goods and cryptocurrency boasts four digital platform veterans. Founders Danny Lee, Payom Dousti, and Amitt Mahajan all met after they sold their gaming startups to Zynga. The Farmville veterans also have Dave Pekar on their team, who sold his sports analytic startup numberFire to FanDuel.
“In the final version of our product, we may not even mention the fact that we’re using Ethereum or using the blockchain," he told CNBC. "In an ideal world, you come to the site, you buy something you want, you exchange it, trade it [or] use it, but you don’t care or even need to know that the underlying technology is crypto-based."