The biggest threat to OpenAI
Bittensor Deep Dive
Powerful AI controlled by a few mega-corporations terrifies everyone.
But what if there's another way?
Bittensor is democratizing AI, putting power in the hands of many.
Don't miss my groundbreaking November 2023 research report on TAO.
Here's what we'll cover in today's edition:
Overview
Use Case
Adoption
Revenue
Tokenomics
Treasury
Governance
Team & Investors
Competitors
Risks & Audits
Summary
Bittensor is an open-source protocol that enables a decentralized, blockchain-based machine learning network.
The project's main objective is to address the problem of centralization in AI and the concentration of power within a small number of companies.
It's "a special network for teaching computers how to be smart"
Optimized development & distribution of AI tech using a distributed ledger.
Open access to a repository of machine intelligence for global innovation.
Reward distribution based on user contributions.
The Revolution upgrade in October introduced subnets, allowing anyone to create their own subnetworks with custom incentives and different use cases.
Fostering a wider range of services within the Bittensor ecosystem.
E.g. Subnet 5 creates AI images like Midjourney AI.
There are no TVL numbers that I can find. However, their dashboard indicates the following statistics:
756 days running
61.5k accounts
5m $TAO staked- 88% of supply
Over 30 subnets
Showing strong growth of network participants and stakers/ validators.
Bittensor is a hybrid blockchain that has elements of a POW (like BTC) and and POS (like ETH).
Miners host AI models and make them available to the network
Validators serve as evaluators within the network
Each block has a 1 $TAO reward that is equally distributed.
Bittensor “fair launched” (no tokens were pre-mined) in 2021.
The supply of TAO is 21m and there is a halving cycle such that for every 10.5 million blocks, rewards per block halve.
Currently, every 12 seconds (one blockstep), a single Tao emits into the network (7200 per day).
64 halving events will occur every 4 years, starting in August 2025.
Determined by total token issuance, not block number.
Current supply stats:
Circulating supply = 5.7m
Total supply = 21m
Market cap = $1.4b
FDV = $5.2b
Market cap/ FDV = 0.27
Bittensor has no treasury as such. It is similar to Bitcoin in that rewards are earned through mining.
Opentensor Foundation funds current infrastructure developments through delegation rewards.
Third-party validators fund their own developments through delegation.
The Route network distributes emissions across subnets based on consensus from key delegates.
Delegates in the 'root' network now have authority over incentive distribution, instead of Opentensor foundation.
Removing sole reliance on any single entity.
Bittensor was founded by Jacob Robert Steeves & Ala Shaabana in 2019.
The original mainnet (Kusangi) went live in Jan 2021 but was later halted and migrated to the current chain, Nakamoto (launched Nov 2021).
Investors include DCG, Polychain Capital, FirstMark Capital, and GSR.
Important note:
$TAO tokens are not allocated through ICOs, IDOs, private sales, or privileged allocations. Circulating tokens must be earned through active participation in the network.
The investors above commit capital and participate in the network as miners or validators.
Bittensors main competition is with centralised AI companies like:
OpenAI
Midjourney
Bard (Google)
They are trying to disrupt this siloed industry with decentralised AI.
It is a highly competitive environment, but Bittensor is providing an innovative solution.
Bittensor planned to be a parachain on Polkadot but decided to use its own standalone L1 blockchain built on Substrate instead, due to concerns about Polkadot's development speed.
Code is open source and mainnet has been running for over 1 year. No documented audits yet.
Bittensor is an intriguing project that brings together two rapidly expanding industries: AI and blockchain.
Upcoming catalysts:
Growing sub-nets
AI adoption
Risks include:
High operating expenses
Intense competition
Overall weighted score = 7.33
Note: I am NOT an ambassador or advisor of Bittensor. This is NFA.