Materials are used for crafting, upgrading, & reforging and for fusing familiars.
Common Material is obtained through Daily Bounties, and Exchanging common equipment.
Rare Material is obtained through Daily Bounties, PvP Event Rewards, and Exchanging rare equipment.
Epic Material is obtained through Daily Bounties, PvP Event Rewards, Exchanging equipment that is epic or higher, or cosmetic items.
To exchange items you no longer want or need for material go to the craft menu, select the exchange tab, tap any items you would like to discard, and select the green exchange button.
Material can also be exchanged for better rarity material. To do so tab over to the trade option.
Additional materials can be gained through special events and exchanges. Join the Official Bit Heroes Discord Server to get advice from players or check out the player-managed Bit Heroes Wiki.