Why is Bittensor called the 'BTC' of the AI track?

Original title: Bittensor = AI Bitcoin?

Original author: S4mmyEth, Decentralized AI Research

Original translation: zhouzhou, BlockBeats

Editor’s note: This article discusses Bittensor, a decentralized AI platform that aims to break the monopoly of centralized AI companies and promote an open, collaborative AI ecosystem through blockchain technology. Bittensor adopts a subnet model, allowing for the emergence of different AI solutions and incentivizing innovation through the TAO token. Despite the maturity of the AI market, Bittensor faces competitive risks and may be affected by other open-source AI frameworks. Further research into subnets, analysis of their applications and development potential, and attention to how Bittensor is driving the future of decentralized AI are important.

The following is the original content (for ease of reading comprehension, the original content has been slightly reorganized):

As the first halving of Bittensor approaches in November 2025, more and more speculation suggests that this may resemble the historical price cycles of Bitcoin—except this time, artificial intelligence is at the core.

Introduction

The rise of artificial intelligence has been dominated by centralized entities such as OpenAI, Google, and Meta. While these companies have driven incredible technological advancements, they also maintain strict control over the development, data access, and monetization of AI.

At this time, Bittensor (TAO) came into being - a decentralized AI market aimed at disrupting traditional business models by creating a peer-to-peer economic model, in which contributors (whether providing computing resources, AI models, or data) can directly receive rewards.

Bittensor provides a transparent and incentivized AI innovation method, with characteristics similar to the incentive of the Bitcoin network.

Its goal is to democratize AI to ensure that no single entity has too much control over machine intelligence.

This analysis will explore how Bittensor operates, its unique subnet structure, token incentive mechanism, and why it may be one of the most attractive cases for decentralized AI development.

Table of Contents

What is Bittensor?

How does Bittensor work

Comparison with Bitcoin

Subnet Ecosystem

Network Incentives and Dynamic TAO

Key difference from centralized AI companies

Conclusion

What is Bittensor?

Bittensor is a decentralized blockchain-based network designed to facilitate the collaborative development, sharing, and improvement of AI models.

Why pay attention?

Unlike traditional centralized AI systems (such as OpenAI), Bittensor has created an open peer-to-peer ecosystem. Participants will be rewarded for their contributions, such as computing resources, data, or AI models.

Bittensor’s mission is to democratize AI, making it more accessible and reducing the dominance of a few large companies.

Comparison with Bitcoin

AI will not disappear, it is a macro trend that will integrate into various industries. There are opportunities hidden in this. If Bittensor becomes the key decentralized network for open source AI, and institutional investors are familiar with the halving mechanism of Bitcoin, then TAO may become a very attractive investment asset.

Bittensor adopts a halving mechanism similar to Bitcoin; TAO’s first halving is expected to occur in November this year.

The first halving of Bitcoin occurred on November 28, 2012, and since then, the market value has skyrocketed 13,125 times:

Do you think TAO will rise to 13,000 times from here?

Absolutely not, that would be too crazy. Its current market value has reached 29 billion US dollars (price: 342 US dollars), and our current market conditions are obviously more mature than in 2012. So it can be said that many speculative factors in the current network status have already been reflected in the price.

However, the collaborative open-source nature of the Bittensor network means that the development speed is very fast, showing a parabolic growth.

Any development, incentive, or innovation from a subnet can be replicated to other subnets, thus elevating the level of the entire ecosystem.

You may think that one of the Alpha tokens (subnet tokens) has a greater potential for multiple growth, but there is also a risk of choosing the wrong token. So, let’s delve into how it works.

How does Bittensor work?

As a machine intelligence marketplace, Bittensor is powered by TAO. The Tao Stats website created by mogmachine provides a great dashboard to view the current 70 subnets:

Indexing the TAO ecosystem is not an easy task, so user interfaces (UIs) like this one aggregate data in a meaningful way for analysis. Key participants in the TAO ecosystem can be classified into the following categories:

Ultimately, value accrues from application developers and end-users who create products utilizing the Bittensor subnet AI models. Cookiedotfun recently launched a dashboard that highlights some of the agents utilizing Bittensor:

Why is Bittensor called the ‘Bitcoin’ of the AI ​​track?

Currently only 12 are listed, but as more applications utilize Bittensor, this number is expected to grow:

Why is Bittensor referred to as the ‘Bitcoin’ of the AI track?

However, the dashboard only covers the use of Bittensor’s proxies, and as they enter the market, more content will be gradually added in the future. Many protocols also use Bittensor for AI integration.

( Subnet Ecosystem

Subnet 1 (root subnet) is dedicated to text prompts, owned by the opentensor Foundation; currently it holds the majority of the TAO staked, with a total market value of 20.9 billion US dollars. In October 2023, the network expanded with more subnets, and now there are a total of 69 subnets, owned by third parties outside the Foundation. This is an excellent division of these subnets by old samster at Crucible Labs:

Why is Bittensor called the “Bitcoin” of the AI track?)https://img.gateio.im/social/moments-7a8436eaee011a4970bd6a3e47c3ba8e(

Each subnet focuses on a specific AI-related task and acts as an independent market where participants collaborate and compete. If you are building an application, one of the subnets may enhance the solution you provide with AI. Some people liken TAO’s subnets to an ‘accelerated version of virtual machines,’ believing that by bidding on specific subnets, there may be opportunities for future high activity. hmalviya9 points out Subnet 5 (OpenKaito) as an opportunity, especially in the recent craze of KAITO airdrops.

)

But before you go all out to buy subnetwork tokens, make sure you understand the emission mechanism and core value proposition of each subnetwork. Currently, the total market value of all 70 subnetworks is $72.5 million, and registering a subnetwork currently requires 408 TAO (approximately $150,000), and it is non-refundable now:

Why is Bittensor called the “Bitcoin” of the AI track?

It’s a bit like locking Virtuals io tokens in LP to serve a single agent. But in this case, each subnet has a unique value proposition that can be leveraged by real-world applications to improve efficiency.

Therefore, the subnet must have a strong value proposition to maintain feasibility. If you hastily purchase a specific subnet token, it may lead to the gradual disappearance of the subnet, and the price will correspondingly decline.

Example Website

Some subnets you may be familiar with come from the following overall applications:

• Open Kaito ai (Subnet 5): Used to provide AI algorithm support for KAITO
• Sports Tensor (Subnet 41): Used to support agents like askBillyBets
• Synth (Subnet 50): Used for predictive analysis of cryptocurrency pricing and integrated into the DeFAI solution of Modenetwork

Network Incentives

The incentive of TAO token is distributed based on the ‘Yuma Consensus’ model. This model allocates rewards according to the activity of the subnets, further driving each subnet to create real value for the applications it builds.

Dynamic TAO (scheduled to launch on February 13, 2025) is a new layer that fine-tunes the economics of rewards, making emissions more flexible and linked to overall network activity, rather than relying solely on the previous ‘Bitcoin halving’ mechanism.

Subnet must create actual demand for its Alpha token (subnet token) in order to earn more TAO, thus creating a competitive environment where utility drives success.

For a more comprehensive understanding of this, you can read the article from 0xprismatic.

Why is Bittensor called the “Bitcoin” of the AI track?(https://img.gateio.im/social/moments-48349d73664c7d8feab98da6eec309dd)

( The key differentiating factor from centralized AI companies

Why do we need to develop a decentralized alternative to challenge companies like OpenAI?

At the end of the day, the centralized model relies on opaque black boxes, internal teams, and develops solutions in isolated environments. The decentralized model, on the other hand, offers greater transparency and allows more contributors to participate collaboratively. Here is a more comprehensive comparison:

![Why is Bittensor called the “Bitcoin” of the AI track?]?)https://img.gateio.im/social/moments-f47ff7b9f9f0174fd1bd9a0c7223e866(

) Conclusion

Bittensor represents a paradigm shift in the development of AI—from centralized control to a more open, peer-driven ecosystem. The network’s subnet model allows for specialized AI solutions to emerge, while TAO’s incentive structure ensures that only the most useful and innovative subnets can thrive.

With the introduction of the dynamic TAO, the protocol now has an adaptive economic model that rewards real-world utility and participation. However, investors and developers must carefully evaluate the subnet before entering, as only the strongest projects can sustain long-term value.

As the approach of Bittensor’s first halving in November 2025, more and more speculation suggests that this may be similar to Bitcoin’s historical price cycles - with the difference that AI is at the center this time. However, it is important to remember that the market has matured, we have just gone through a preliminary AI frenzy, and there is a risk that other open-source AI contributors may create equally valuable frameworks or networks, which could reduce the value accumulation of TAO tokens.

Whether Bittensor becomes the cornerstone of decentralized AI or just a pioneering experiment, it has sparked important discussions about AI governance, accessibility, and innovative future.

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