Bittensor TAO Review: The Next Big AI Crypto?
Bittensor is a peer-to-peer intelligence market aiming to efficiently produce machine intelligence by employing neural networks to identify and reward the best projects.
The potential for collusion has been addressed with an incentive mechanism that rewards honestly weighted AI models making the system highly resilient to collusion.
The price action of Bittensor TAO tokens has seen a 2000% rise in the last 12 months and Bittensor has a strong and active community.
Bittensor’s overarching vision; directing the power of digital markets towards society’s most important digital commodity – Artificial Intelligence. Not only to build the most powerful intelligence network, but also to ensure that the benefits and the ownership of machine intelligence are in the hands of mere mortals. Bottom up, rather than top down. -Bittensor.
This article is provided for informational and entertainment purposes only. It is not intended to be, nor does it constitute, any form of financial advice or recommendations to buy, sell, or hold any investments or financial instruments, including cryptocurrencies.
What is Bittensor?
Bittensor is an AI cryptocurrency project that behaves like a marketplace or trading space on the internet where machine learning models can share what they’ve learned and judge each other’s value.
Imagine a bunch of smart robots sharing their knowledge online and saying, “Hey, that’s a smart idea, here are some points for you,” or “Hmm, that’s not so helpful,” and giving fewer points accordingly.
These points aren’t just for show; they come in the form of $TAO tokens that have real value and can be traded or converted into fiat currency.
Let’s break Bittensor down into bite sized chunks. 👇
1. Why Bittensor Exists
Currently, the way we analyze machine learning capabilities is by setting up specific challenges or tests and seeing how well they perform, usually benchmarked against human intelligence, or existing machine learning models.
But this method only rewards machines that are good at those specific tests, not necessarily the ones that are broadly intelligent or can come up with new ideas on their own.
It’s like rewarding students for memorizing facts instead of understanding concepts or being creative.
2. How Bittensor Works
Instead of these fixed tests which can lead to overfitting and narrowly focused AI models, Bittensor lets AI systems themselves decide what’s valuable.
They do this by talking to each other over the internet and exchanging their ideas (or what they’ve learned).
When one AI finds another AI’s ideas or knowledge useful, it gives it a good score.
These scores are then recorded on the Bittensor digital ledger.
3. The Reward System
AI models with higher scores get more rewards in the form of the TAO token, or influence within the network.
This encourages everyone to share useful and valuable information since they want to get higher scores and rewards!
4. Avoiding Cheating and Collusion
In any system where rewards are involved, there’s a chance that some might try to cheat to get ahead.
Bittensor has a clever way of dealing with this by making sure that AIs can’t just team up and unfairly boost each other’s scores without actually being helpful.
It does this through a special rule that makes sure rewards are only given out when the value is truly added to the network.
5. Why It’s Cool
The approach created with Bittensor has a lot of potential benefits.
It could make machine learning much more diverse and creative by rewarding systems that come up with unique and valuable insights rather than just those that are good at specific tasks.
It also improves accessibility (which is a huge issue currently) by opening the door for anyone to contribute and benefit from the development of AI, not just big billion/trillion dollar companies.
Learn how to create NFTs using AI!
Bittensor TAO Tokenomics
If you’re familiar with the Tokenomics of Bitcoin parts of Bittensor’s $TAO tokenomics may seem familiar:
Total Supply (Fixed): 21 Million $TAO
Circulating Supply: 6.27 Million $TAO (at the time of writing)
Block Time: 12 Seconds
Block Rewards: 1 $TAO
Consensus Mechanism: Proof of Stake (PoS)
Similar to Bitcoin, TAO’s issuance model involves halving events where the block reward for miners and validators is reduced by half. This happens every 4 years based on the total token issuance, not the block number.
The halvening schedule is detailed from the current date through to the twelfth halvening event, with the next halvening on September 28, 2025.
The block reward currently sits at 1 TAO and is halved every halvening.
The halvening process is designed to continue until all 21 million TAO tokens are in circulation, which adds a deflationary aspect to the token’s economics.
Bittensor Use Cases and Real-World Applications
Bittensor use cases and applications include but are not limited to the following:
Decentralized AI Model Training: Bittensor can facilitate the training of machine learning models in a decentralized manner, leveraging the distributed computational power of its network. This could drastically reduce the costs and increase the efficiency of training complex AI models, democratizing access to AI development.
Open Access to Machine Learning Models: Developers can use Bittensor to deploy their AI models on the network, making them accessible to anyone in need of AI services. This open marketplace for AI capabilities could spur innovation and lower the barriers to entry for leveraging advanced AI in various fields.
Decentralized Data Storage and Sharing: Bittensor’s infrastructure can be used to create subnets focused on data storage, offering a secure, decentralized alternative to centralized data storage providers. This could have significant implications for data privacy and security, particularly for sensitive information.
Decentralized Oracles for Blockchain Systems: Bittensor could provide the framework for creating decentralized oracles, critical components for connecting blockchain systems with real-world data. This would enhance the capability, security, and reliability of smart contracts by providing them with accurate and tamper-proof external data.
Distributed Computing for Research: The network could harness its distributed computational resources to tackle large-scale scientific challenges, such as protein folding, climate modeling, or searching for extraterrestrial intelligence. This would allow researchers to access vast amounts of computational power at a fraction of the current costs.
Cryptocurrency Market Analysis: AI models running on Bittensor could provide advanced analytics and insights for the cryptocurrency market, helping traders make informed decisions. The decentralized nature of the network ensures that these analytics are unbiased and not manipulated by centralized entities.
Crowdsourced AI: By allowing a multitude of contributors to participate in AI model training, Bittensor can facilitate a crowdsourced approach to machine learning, where models continuously evolve and improve based on contributions from diverse sources around the world.
The Team Behind Bittensor
The Bittensor LinkedIn page (Opentensor Foundation) cites Bittensor to have between 111 and 50 employees working on the project.
Unlike some of the more centralized AI companies, it isn’t obvious who the founders of Bittensor are.
James Woodman is the Chief Operating Officer of Bittensor with a history in Investment Banking and Business Development based in New York.
Bittensor employees look to made made up of some world class software, blockchain, and machine learning engineers, alongside data scientists, marketing experts, and
The Bittensor Community and Ecosystem
Bittensor has an active community across X, Telegram, and Discord with regular updates and discussion amongst the team and community members.
Unlike most organizations, @opentensor's mission is actually death, thereby birthing a truly decentralized @bittensor_ ecosystem.
— OpenĎ„ensor FoundaĎ„ion (@opentensor) February 13, 2024
However, while we still live, and in the interest of maximum transparency, this is what the delegations towards @opentensor's validator support 🧵 pic.twitter.com/dE05WMkTnc
Challenges and Risks with the Bittensor project
Bittensor’s ambitious objective to decentralize artificial intelligence through its open-source protocol, presents a novel approach in leveraging distributed computing power for AI development and deployment.
However, this endeavor is of course not without its challenges and risks, some of the notable challenges and risks associated with the Bittensor project include
Scalability: Like most blockchain-based projects, Bittensor faces the challenge of scaling efficiently while maintaining the integrity and security of its network.
Performance: Distributed networks inherently deal with latency issues. For Bittensor, ensuring high performance of ML models, especially those requiring real-time data processing and analysis, is critical.
Security: While being an open-source protocol fosters innovation and collaboration, it also exposes the network to potential security vulnerabilities. Ensuring that the codebase is secure against attacks is an ongoing challenge. The security of Bittensor’s native token (TAO) is paramount.
Resource Distribution: Bittensor aims to leverage resources from a wide array of participants, but ensuring that these resources are not overwhelmingly controlled by a few powerful entities is critical for maintaining a truly decentralized and democratized AI development platform.
Regulatory and Compliance Risks: As a project that intersects blockchain with AI, Bittensor might face regulatory challenges. These could range from the legal recognition of decentralized AI services to the regulation of tokens and cryptocurrencies.
Incentive Mechanisms: The success of Bittensor heavily relies on its ability to incentivize participants correctly. Ensuring that the rewards system fairly compensates contributors for their computing power, data, and ML models requires a carefully balanced approach.
Adoption and Network Effects: For Bittensor to realize its aims, widespread adoption is necessary. Convincing developers, businesses, and users to shift from traditional, centralized AI services to a decentralized model poses a significant challenge. The value proposition must be compelling enough to overcome the inertia of sticking with established players.
Overall, Bittensor faces many of the same challenges that have been faced and overcome by projects before it. If it can remain secure, useful, and fair all while attracting new talent it looks to have a promising future as a decentralized marketplace.
Where Can I Buy Bittensor TAO?
The easiest way to buy Bittensor is by using a centralized cryptocurrency exchange.
Currently the most popular exchanges to purchase and trade Bittensor are MEXC, KuCoin, and Gate.io.
If you prefer self-custody of your $TAO tokens you can learn how to create a wallet here.
Final Thoughts
Bittensor is a project that has so far, successfully merged AI and blockchain technology to create a decentralized marketplace for machine learning and AI models.
Its approach tackles the current limitations found in centralized AI development pipelines. By addressing concerns like scalability, security, and incentive mechanisms head-on, Bittensor sets the stage for a more decentralized and accessible future in AI.
The rise in the TAO token’s value, alongside its promising use cases, highlights the growing interest and potential within decentralized AI spaces.
Moving forward, the success of Bittensor will likely hinge on its ability to maintain an active and engaged community, overcome technical hurdles, and navigate the complex regulatory landscape that surrounds blockchain and AI technologies.
