Blockchain startup Rare Bits wants to be the cryptocurrency-fuelled Amazon for digital goods

Rare Bits/BI GraphicsA sampling of digitised goods available for purchase on Rare Bits.
  • Rare Bits is a marketplace where you can buy and sell digital goods using cryptocurrencies.
  • On Rare Bits, you can buy collectibles that you actually own through blockchain technology.

For the team behind virtual goods marketplace Rare Bits, dealing in digitised assets is second nature.

Three of Rare Bits’ four co-founders are former Zynga employees who worked on FarmVille, the Facebook farming game. On FarmVille, users spent hours cultivating digital crops and tilling virtual soil. At its peak, FarmVille had more than 80 million active monthly users and its own payment system, called Farm Cash, where users could trade in real-world money for virtual farm animals and farmhouse decor.

The idea that people will spend real money on intangible items is the thesis of Rare Bits, an online emporium that deals exclusively in digitised collectibles. On Rare Bits, you can use cryptocurrencies to purchase virtual items like googly-eyed cats, cartoon “CryptoBots,” and pixelated “CryptoPunks.”

While digitised assets have been available for purchase in the past, Rare Bits co-founder Daniel Lee says that with the advent of blockchain technology, there’s been a fundamental shift in the way people consider virtual ownership.

“All digital goods that have been sold in the history of digital goods were locked within the server of one specific individual,” Lee told Business Insider. “It was a one-way street: You could buy something, but the developer could take it away, and you couldn’t resell or trade it.”

With the blockchain providing a digital ledger indicating virtual ownership, there’s an influx of interest surrounding the buying and selling of digital goods.

It was the blockchain, said Lee, that inspired both him and his co-founders to create an entire marketplace centered on virtual ownership.

“Given all of our experiences based on building businesses that sell digital goods, we knew that there’s a lot on the horizon for building a digital goods platform,” Lee said.

So far, the San Francisco-based company has received $US6 million in funding from investors including First Round Capital and Craft Ventures. On Tuesday, Rare Bits announced the addition of Fan Bits to its platform, an interface that lets creators put digital artwork up for sale on the blockchain, all without having any prior knowledge of blockchain technology.

“The area of entertainment drives adoption, but there’s going to be a progression,” said Lee. “There’s going to be a shift in the way people think of ownership, and we want to be the company at the center of that shift. Now, when you own something online, it actually means something.”

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