So, how do you get Bits? How much do they cost? How do you use them? In the chat box you will find a Bit icon (on supported channels) and it will open a window where you can select an amount of bits you want to purchase. Choose one and you will be redirected to another page, where you can pay for Bits via Amazon Payments. The following Bit packages are available:

• 100 Bits – $1.40
• 500 Bits – $7.00
• 1,500 Bits – $19.95 (5% discount)
• 5,000 Bits – $64.40 (8% discount)
• 10,000 Bits – $126.00 (10% discount)
• 25,000 Bits – $308.00 (12% discount)

Once purchased you can use your Bits in chat to Cheer for your favourite streamer by typing “cheer” followed by the number of Bits, like “cheer100”, anywhere in your chat message. You can also have multiple Cheers in the same message.

Larger denominations of Bits offer larger and different animated emoticons. By Cheering you also unlock Cheer Chat Badges, specific to each channel.

Just like any other chat message, Cheer messages can be purged. A banned or timed out user is not able to send Cheers in that channel during the period they are banned. Streamers will also find that 3rd party overlay software and apps may offer the ability to display Cheer notifications on stream. TwitchAlerts has already released support for Bits.

The revenue made from Cheering is shared between Twitch and partnered streamers, although the % split has not been disclosed to the public. Streamers don’t need to stop using other 3rd party tip services either if they utilize the Bits system.

You can submit feedback to Twitch about Cheering and the Bits system. For any future updates regarding Twitch and it’s competitors, be sure to follow our Twitter. @StreamerSquare

Source: Twitch Blog

For more info: Twitch FAQ