What is Bittensor (TAO)?


An Introduction to Bittensor (TAO)

Since 2020, the artificial intelligence (AI) industry has made remarkable advancements, serving hundreds of millions of individuals and businesses globally as they integrate this technology into daily operations. Notably, ChatGPT, an AI chatbot developed by OpenAI, achieved a user base of 100 million within two days. However, the industry grapples with inherent challenges, primarily stemming from its significant centralization, where a handful of giants, such as Google, OpenAI, and Anthropic, dominate the market.

The Problem Bittensor is aiming to solve

The intense competition between these major companies results in little collaboration and maintains the privacy of their data, thereby creating barriers for new companies to enter the market. Starting an AI company requires a lot of money, data, and expertise. Even if a new company develops AI, competing with these big firms is tough due to their resources and data. This situation makes it difficult for new players to succeed and keeps the big companies in control.

Solution provided by Bittensor

Bittensor addresses this challenge by establishing a decentralized intelligence network, fostering machine learning and reshaping the landscape of AI development. Bittensor has created a decentralized peer-to-peer machine learning protocol for AI applications that can be compared to a neural network infrastructure. This is achieved by the unique design of the Bittensor network, enabling AI systems and the blockchain to integrate.

The Blockchain layer, built on Polkadot Substrate, serves as a foundational layer-0 blockchain beneath the AI layer. It is pivotal in enforcing the consensus mechanism, ensuring peer identity, and providing incentives for network peers. Communication between these layers is facilitated through inter-process communication.

The AI layer plays a key role in simplifying the Bittensor kernel and making sure that a node's neural network can smoothly communicate with other nodes in the network. In the Bittensor Protocol, every node contains just one neural network.

Blockchain meet AI systems in Bittensor

The Bittensor network ensures fairness through a staked weighted trust system where peers rank each other. Higher-ranked peers earn extra rewards. Collective rankings, trusted by the blockchain layer, replace individual rankings, enhancing security. Peers register wallets and cryptographic keys for identification, essential for rankings, transactions, and peer communication.

Moreover, the blockchain layer combats collusion by rewarding "trusted" peers achieving network consensus, reinforcing security and fairness in Bittensor's incentive structure.

Bittensor's Technology

One of Bittensor’s key technologies is its uniquely developed consensus algorithm called Yuma, a special system Bittensor uses to manage and secure its network. It helps spread AI processing tasks across many computers (nodes), making it possible to handle bigger and more complex tasks.

This system combines two methods, proof-of-work and proof-of-stake, to validate transactions and create new blocks in the blockchain. Nodes complete computational tasks and are rewarded with tokens for their work. Yuma is unique because it also involves machine-learning tasks. Nodes that contribute high-quality AI models get rewarded with TAO tokens, Bittensor's native cryptocurrency.

The system is designed to be fair, with validators ensuring that rewards are correctly given out. This encourages everyone to work together and keeps the network secure.

The implementation of Yuma within Bittensor yields three primary advantages: incentivizing valuable contributions, fostering collaboration, and enhancing blockchain security.

Other important aspects of Bittensor are the Decentralized Mixture of Experts and Subnets, we delve into these topics in the complete report.

Bittensor's Ecosystem

Given Bittensor's presence in a specialized market, building a robust ecosystem will naturally require some time. Currently, the network comprises 32 subnets designated for specific AI models such as the completions from text prompts. The team acknowledges that the ecosystem is not yet thriving, and this is by design. To ensure the network's proper functionality, a critical number of miners is essential.

Consequently, the team has prioritized attracting miners to support the network. With a sufficient number of miners validating the network, the next phase involves efforts to entice AI developers and models. While growth is anticipated, the niche nature of the sector suggests that this expansion may take some time. Although building a vast ecosystem may take time, the protocol is backed by industry giants such as Digital Currency Group and Foundry, illustrating the potential of the project.

Bittensor News

In November, the Bittensor ecosystem experienced an acceleration in innovation, marked by the registration of 26 new subnets. Among these, an intriguing example is BitAPAI Chat, which functions similarly to ChatGPT, allowing users to pose questions and receive AI-generated responses. However, some projects, such as Corcel, build on top of the Bittensor network, acting as an interface. For instance, when Corcel was prompted about, the project leveraged the Bittensor network to generate a response, as depicted in the illustration.

Response of Corcel while leveraging the Bittensor network

While these subnets perform admirably, the Bittensor team anticipates that we've merely scratched the surface of their potential. Their full scope of capabilities remains largely untapped. The prospect of witnessing their progress and development in the upcoming months is undeniably exciting.

Bittensor Price

TAO has undergone a bullish trend against Bitcoin following an accumulation phase of about 200 days, resulting in a remarkable 500% return, outpacing Bitcoin's performance. Recent substantial buying activity has triggered a sharp surge in its price. However, the Relative Strength Index indicates a potential overbought situation, hinting at a probable price consolidation or correction that might test previously established support levels. For long-term investors optimistic about TAO, this could present a potential buying opportunity

Technical Analysis Bittensor (TAO)

Amid burgeoning interest in AI-related cryptocurrencies and an upsurge in market demand, TAO has gained prominence, displaying robust technical performance despite market volatility.

Click the button below for the complete research report.

Download the TAO report

Do you want to gain access to all our research reports? Create an account in our portal.