Analyzing the current situation of Bittensor: What opportunities are there in AI Bitcoin?

Original title: Bittensor = AI Bitcoin?

Original author: S 4 mmyEth, Decentralized AI Research
คำแปลต้นฉบับ: โจวโจว, BlockBeats

Editors note: This article discusses Bittensor, a decentralized AI platform that hopes to break the monopoly of centralized AI companies through blockchain technology and promote an open and collaborative AI ecosystem. Bittensor adopts a subnet model to allow the emergence of different AI solutions and incentivize innovation through TAO tokens. Although the AI market is mature, Bittensor faces competitive risks and may be affected by other open source AI frameworks. We will continue to study subnets in depth, analyze their applications and development potential, and pay attention to how Bittensor promotes the future of decentralized AI.

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As the first Bittensor halving approaches in November 2025, speculation is growing that it could mirror Bitcoin’s historical price cycles — only this time, with artificial intelligence at its core.

การแนะนำ

The rise of AI has been dominated by centralized entities like OpenAI, Google, and Meta. While these companies have driven incredible technological advances, they also maintain tight control over AI development, data access, and monetization.

This is where Bittensor (TAO) comes in – a decentralized AI ตลาด that aims to disrupt traditional business models by creating a peer-to-peer economic model in which contributors (whether providing computing resources, AI models or data) can be directly rewarded.

Bittensor provides a transparent and incentivized approach to AI innovation, with similar characteristics to the Bitcoin network incentives.

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

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

Table of contents

What is Bittensor?

How Bittensor works

Comparison with Bitcoin

Subnet Ecosystem

Network Incentives and Dynamic TAO

Key differences from centralized AI companies

สรุปแล้ว

What is Bittensor?

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

Why should you care?

Unlike traditional centralized AI systems such as OpenAI, Bittensor creates an open peer-to-peer ecosystem where participants are rewarded for their contributions such as computing resources, data, or AI models.
Bittensors mission is to democratize AI, making it more accessible and less controlled by a few large companies.

Comparison with Bitcoin

AI is not going away, it is a macro trend that will be integrated into various industries. Therein lies the opportunity. If Bittensor becomes a key decentralized network for open source AI, and institutional investors become familiar with Bitcoin’s halving mechanism, then TAO could become a very attractive investment asset.

Bittensor uses a halving mechanism similar to Bitcoin; TAO’s first halving is expected to occur in November this year.
Bitcoin’s first halving occurred on November 28, 2012, and since then its market value has skyrocketed 13,125 times:

Do I think TAO will go 13,000x from here?

Absolutely not, that would be crazy. It is now worth $2.9 billion (price: $342), and we are clearly in a more mature market than we were in 2012. So it can be said that a lot of speculation is already reflected in the price in the current state of the network.

However, the collaborative, open-source nature of the Bittensor Network means that development is happening very quickly, showing parabolic growth.

Any development, incentives, or innovations from a subnet can be replicated on other subnets, thereby improving the level of the entire ecosystem.

You could argue that one of the Alpha tokens (subnet tokens) has greater potential to grow multiple times, but there is also the risk of picking the wrong token. So, let’s take a deeper look at how it works.

How does Bittensor work?

Bittensor is run as a machine intelligence marketplace, powered by TAO. The Tao Stats website created by mogmachine provides a nice dashboard of the 70 subnets that exist today:

Indexing the TAO ecosystem is not an easy task, so user interfaces (UIs) like this one aggregate the data in a meaningful way so that it can be analyzed. The key players in the TAO ecosystem can be divided into the following categories:

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

There are currently only 12 listed, but this number is expected to grow as more applications take advantage of Bittensor:

However, the dashboard only covers brokers that utilize Bittensor, and more will be added gradually in the future as they enter the market. Many protocols also use Bittensor for AI integration.

Subnet Ecosystem

Subnet 1 (the root subnet) is dedicated to text prompts and is owned by the opentensor foundation; it currently holds the majority of staked TAO, with a total market cap of $2.09 billion. In October 2023, the network expanded with more subnets, and now has a total of 69 subnets, which are owned by third parties outside the foundation. Here is a wonderful breakdown of these subnets by old samster at Crucible Labs:

Each subnet focuses on a specific AI-related task and acts as an independent marketplace where participants collaborate and compete. If you are building an application, one of the subnets may enhance the solution you provide through AI. Some people compare TAOs subnets to speeded-up virtual machines, believing that by bidding on specific subnets, there may be opportunities for high activity in the future. hmalviya9 pointed out Subnet 5 (OpenKaito) as an opportunity, especially with the recent craze of KAITO airdrops:

But before you go all out and buy subnet tokens, make sure you understand the emission mechanism and core value proposition of each subnet. Currently, the total market value of all 70 subnets is $72.5 million, and registering a subnet currently requires 408 TAO (about $151,000) and is now non-refundable:

It’s a bit like locking Virtuals io’s tokens in LPs to provide services to 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, a subnet must have a strong value proposition to remain viable. If you rush to buy a particular subnet token, you may cause the subnet to gradually disappear and the price to fall accordingly.

Example Subnet

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

• Open Kaito ai (subnet 5): used to provide AI algorithm support for KAITO

• Sports Tensor (Subnet 41): used to power agents such as askBillyBets

• Synth (Subnet 50): For predictive analytics on การเข้ารหัสลับ asset pricing and integrated into Modenetwork’s DeFAI solution

Network Incentives

TAO token incentives are distributed based on the Yuma Consensus model. This model distributes rewards based on subnet activity, further driving each subnet to create real value for the applications it builds.

Dynamic TAO (coming February 13, 2025) is a new layer used to fine-tune the economics of rewards, making emissions more flexible and tied to overall network activity rather than relying solely on the previous Bitcoin halving mechanism.
Subnets must create real demand for their Alpha tokens (subnet tokens) in order to earn more TAO, thus creating a competitive environment where utility drives success.

If you want a more comprehensive understanding of this, you can read the 0x prismatic article.

Key differentiators from centralized AI companies

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

Ultimately, centralized models rely on opaque black boxes, internal teams, and developing solutions in isolated environments. Decentralized models provide greater transparency and allow more contributors to participate in a collaborative way. Here is a more comprehensive comparison:

สรุปแล้ว

Bittensor represents a paradigm shift in AI development – moving away from centralized control towards a more open, peer-driven ecosystem. The networks subnet model allows specialized AI solutions to emerge, while TAOs incentive structure ensures that only the most useful and innovative subnets can thrive.

With the introduction of dynamic TAOs, the protocol now has an adaptive economic model that rewards real-world utility and engagement. However, investors and developers must carefully evaluate subnets before jumping in, as only the strongest projects will sustain long-term value.

As the first Bittensor halving approaches in November 2025, there is growing speculation that this could resemble Bitcoins historical price cycles – except this time AI is at the center. However, it is important to remember that the market is mature, we have just experienced an initial AI boom, and there is a risk that other open source AI contributors may create equally valuable frameworks or networks, which could reduce the value accrued to TAO tokens.

Whether or not Bittensor ultimately becomes the backbone of decentralized AI, or simply serves as a pioneering experiment, it has already sparked important discussions about the future of AI governance, accessibility, and innovation.

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