In the tradition of baseball cards, Pogs, and Beanie Babies, we created a new generation of toys that let children trade bits instead of atoms. Imagine a child teaching her robotic toy a new dance step. Then, when she is playing with a friend, her toy can "teach" this new dance to her friend's toy. Later, her friend can modify this dance a little, and pass it on to another friend. The creator of the dance can check the Internet to see how far her dance has spread ("150 toys know my dance" or "It spread all the way to Japan!"). Trading digital (rather than physical) objects has distinct advantages: kids can more easily author, copy, modify, and trace them. We studied how such toys can give children a richer understanding of their social network, and help them play a more active role in constructing "kid culture." We explored a wide range of Tradable Bits, including pieces of music, animations, stories, and digital creatures.