What is Bittensor? Subnets, TAO & More

What is Bittensor (TAO)?

Bittensor (TAO) is a decentralized, Layer 1 blockchain protocol that creates an open, permissionless network for AI services. Built on its own network, Bittensor enables developers to build, share, and monetize machine learning models directly on-chain, establishing a fair marketplace where AI contributions thrive without central control.

Since its 2021 launch, Bittensor has grown to over 139,000 users, aiming to democratize AI by making advanced machine learning accessible to all, not just large corporations. Central to Bittensor is its unique Yuma Consensus mechanism, which rewards nodes for valuable AI contributions, with validators ensuring data integrity across the network.

The TAO token powers transactions, governance, and rewards, serving as a measure of the network's collective intelligence and stimulating developers and miners alike. Initially focused solely on machine learning, Bittensor has since broadened into a market for other digital commodities, including computing power and storage.

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How Does Bittensor Work?

Bittensor operates as a decentralized AI network where developers and miners contribute computational power for AI services on a blockchain-based marketplace.

• Network Structure: Bittensor consists of interconnected subnets, specialized groups of nodes focused on distinct AI tasks that collaborate with each other.
• Registration: Nodes can register either as miners to contribute computational power by running AI models, or as validators to monitor the quality and integrity of these contributions.
• Rewards: Using the Yuma Consensus (Proof of Intelligence), Bittensor evaluates each contribution, with rewards allocated based on AI model impact.
• Staking: TAO token holders can stake their tokens to support specific nodes, securing the network and sharing in mining rewards, which promotes broad engagement.
• Governance: Bittensor is governed by its community, where proposals require approval from at least (50% + 1) vote of the Senate before being executed.

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What are Subnets?

Bittensor subnets are specialized node networks focused on distinct AI tasks, enhancing scalability and specialization. As of late 2024, Bittensor has 52 subnets with 280,624 recycled TAO tokens. Here are the best Bittensor subnets currently:

• Root: Manages TAO emissions to subnets, issuing 1 TAO per block, and functions as the senate with top validators holding veto power.
• Nineteen: Supports decentralized AI inference, providing access to open-source models like LLMs and image generation tools.
• Pretraining: Incentivizes miners to train Foundation-Models on the Falcon dataset, rewarding optimal pre-trained models.
• Targon: Validates AI models for OpenAI compliance through deterministic verification of queries.
• Text Prompting: Focuses on conversational AI tasks like Q&A, summarization, and programming, with validators scoring responses for accuracy.

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Bittensor (TAO) Tokenomics

Bittensor’s TAO tokenomics model fuels the decentralized AI marketplace by using a 21 million TAO total supply cap like Bitcoin. That way, Bittensor seeks to preserve token value by progressively reducing issuance over time, thus creating scarcity and demand.

With no pre-mined or insider allocations, Bittensor’s tokenomics remain fully decentralized, promoting a fair, community-driven approach to AI. Unlike Bitcoin, which centers on network security, Bittensor’s tokenomics incentivize real-world AI contributions in a competitive, market-driven system.

Currently, around 36.62% of TAO is in circulation, and each new TAO is created exclusively through mining and validating, rewarding participants based on the value of their machine intelligence contributions. TAO holders can delegate tokens to validators for rewards, while TAO itself can be recycled, burned, or locked.

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Bittensor Ecosystem and Tools

The Bittensor ecosystem provides a variety of tools, services, and applications that showcase the platform’s capabilities in its mission of decentralizing AI. We've divided them into four categories.

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Mining and Infrastructure

Anyone can easily support and profit from the Bittensor network through mining and infrastructure options.

• Subtensor: Organizes and manages the network’s subnets, coordinating various task-specific networks to optimize the performance and scalability of AI tasks.
• Bittensor TAO Rental: TAO rental services allow users to lease computational resources for mining on the Bittensor network, making it accessible to those without dedicated hardware.
• Cloud Bittensor Mining: This enables cloud-based mining, allowing users to join the network without physical infrastructure. It provides a cost-effective entry point for decentralized AI mining on Bittensor’s platform.

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Data, Development, and Interoperability

The Bittensor network's developers can integrate, manage, and scale AI functionalities with the help of development and interoperability tools.

• Bittensor API: Developers can seamlessly integrate with the network using API, enabling them to build and deploy decentralized AI applications like custom NLP or content-generation models.
• Ethereum Compatibility Layer: Recently, Bittensor added the Ethereum compatibility layer, enabling the execution of Ethereum smart contracts on the Subtensor blockchain, adding EVM-based functionality to the network.
• Bittensor Oracle: Brings real-world data to the network, providing AI models with external information that enhances the intelligence and relevance of decentralized models.
• Child Hotkeys: Allows hotkeys to delegate stake to “child” hotkeys, decentralizing responsibilities and enhancing security across multiple nodes within the network.

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Wallets and Exchanges

Users can safely store, trade, and manage TAO tokens with Bittensor wallets and exchanges, making it simple to participate in the ecosystem.

• Bittensor Wallet: The wallet provides a secure way to store, send, and receive TAO tokens, allowing users to manage assets and participate in staking or delegating TAO to validators.
• Bittensor Exchange: TAO tokens are available for trading on centralized exchanges like Binance, Bitget, Gate.io, Kucoin and MEXC.

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AI Use Cases

Real-world AI applications showcase Bittensor’s potential in conversational AI and social media automation.

• Chat with Hal: This personal AI assistant demonstrates Bittensor’s capabilities in natural language processing (NLP) by providing responsive, conversational experiences. Hal exemplifies how Bittensor enables interactive AI, enhancing user engagement.
• Reply Tensor: Focused on automating Twitter (X) responses and generating content, Reply Tensor showcases Bittensor’s role in AI-driven content creation, streamlining social media engagement through efficient, context-aware replies.

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Founders and Core Contributors

Bittensor was co-founded by Ala Shaabana, a former Assistant Professor at the University of Toronto, and Jacob Robert Steeves, a former Google software engineer. Supported by the Opentensor Foundation (@opentensor), the team includes contributors like Yuqian Hui and François Luus.

Interestingly, the Bittenson whitepaper was signed by “Yuma Rao,” a mysterious, pseudonymous figure akin to Bitcoin’s Satoshi Nakamoto, whose true identity remains unknown. To avoid scam, always refer to the official site of bittensor.com.

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Bottom Line

Bittensor (TAO) is an innovative project that encourages decentralized AI development, enabling users to contribute and monetize machine learning models on an open network. It introduces exciting concepts like subnets and Yuma Consensus to crypto.

The founders' vision has resonated globally, creating a strong, almost cult-like following. In terms of price action, TAO is the undisputed winner among AI projects in 2024, with a remarkable +92.91% gain so far.

Looking ahead in the upcoming months, we will be watching how the integration of EVM-style smart contracts impacts Bittensor's functionality and user adoption as the project moves forward with its roadmap.