What is Bittensor (TAO)?

Bittensor (TAO) is an innovative blockchain project focused on decentralized artificial intelligence. In short, it can be defined as an open-source AI network created for training and sharing artificial intelligence models on the Web3 infrastructure. “TAO” is the native cryptocurrency of the Bittensor network. In response to the question, “What is the TAO coin?”, we can say that this token is at the center of the network's reward and governance mechanisms. Bittensor's vision is to remove artificial intelligence from the monopoly of large centralized companies and open it up to the contributions of the global community, creating a fair digital marketplace through artificial intelligence blockchain integration. In this guide, we will discuss the emergence of Bittensor, its history, how it works, and the details of the Bittensor project with an explanation of the TAO token.

Definition and Origins of Bittensor

Bittensor was launched in 2021 by the Opentensor Foundation team as a decentralized artificial intelligence network. The project's primary goal is to combine Web3 technology with artificial intelligence to enable participants worldwide to develop and share machine learning models. In this network, each participant contributes their artificial intelligence model or knowledge to the network and gains the opportunity to earn TAO tokens in return. Bittensor's emergence stemmed from the need for decentralization in the training and use of artificial intelligence models.

How does Bittensor work? In summary, there are two types of nodes within the network: miners and validators. Miner nodes run AI models that perform specific artificial intelligence tasks (such as text generation, image recognition, or data processing). Validator nodes evaluate the results produced by miners and perform quality control. Through this interactive system, the Bittensor network creates a continuously learning and evolving artificial intelligence ecosystem while establishing a mechanism that fairly rewards everyone who contributes.

One of Bittensor's visionary approaches is the goal of bringing Web3 and artificial intelligence together. The project enables the sharing of artificial intelligence models in an open market through smart contracts and cryptographic security on the blockchain. This approach provides an infrastructure that encourages information sharing and collective learning. This vision was detailed in the Bittensor white paper (technical document) published in 2021, laying the foundations for the concept of a decentralized AI network. In the same year, TAO, the native token of the Bittensor network, was introduced with a fair distribution model. TAO emerged as a token produced entirely through machine learning studies conducted on the network, without any pre-mining or private sales.

To briefly answer the question of what is TAO coin, TAO is a cryptocurrency that serves as both a reward token and an access key on the Bittensor network. Thus, miners and validators earn TAO in exchange for their contributions, while users who hold TAO gain the right to use the network and access its services. The TAO token forms the economic foundation of the Bittensor ecosystem and is designed to increase in value over time as the “intelligence accumulation” of artificial intelligence within the network grows.

History of Bittensor: Important Milestones

Despite its short history, the Bittensor project has shown rapid growth. The Bittensor project officially began in 2021. The project's technical document (white paper) was published, and the first network prototype was released. The Opentensor Foundation team introduced the TAO token as the local cryptocurrency to be integrated into the artificial intelligence network. In January 2021, the first Bittensor network was launched under the code name “Kusanagi,” and miners and validators began working on this network. However, due to consensus issues that arose in the early stages, this first version was discontinued shortly thereafter. Then, in November 2021, the network was relaunched with various improvements under the code name “Nakamoto,” officially marking the launch of Bittensor's main network.

The year 2022 stood out as a period of maturation for the Bittensor network. As the network's development process continued, the idea of decentralized artificial intelligence began to attract more attention within the crypto community. Throughout the year, significant increases were observed in both the number of users joining the network and community engagement. TAO token production continued solely through in-network rewards and was still traded in limited quantities on external markets.

2023 was a major turning point for Bittensor. In January, the “Finney” test network was launched, where subnet structures and delegation (staking) mechanisms were tested. In March 2023, the main network was upgraded to the Finney version, enabling performance improvements and higher scalability. In October, subnets were officially integrated into the main network, allowing users to create their own subnets with incentive structures focused on specific AI tasks. In the same year, the TAO token began listing on centralized exchanges. In March, MEXC became one of the first exchanges to list TAO, and later platforms like KuCoin also opened TAO trading. These developments enabled TAO to reach a broader investor base.

In 2024, the Bittensor network showed significant growth and began to gain more mainstream adoption. Over 50 active subnetworks were formed on the network, focusing on different AI tasks such as text generation, image creation, data mining, and music production. As of December 2024, there were 250 validators managed by 173 different users and a total of 11,856 miner nodes belonging to over 2,700 users active on the network. The TAO token began trading on larger exchanges this year and gained significant liquidity and visibility thanks to its listing on Binance in April 2024. With all these developments, Bittensor has emerged as a leading AI-focused crypto project both technologically and economically.

Why is Bittensor Valuable?

The Bittensor project is attracting interest from both tech enthusiasts and crypto investors. So why is Bittensor valuable? Here are the key factors that make the project unique:

Decentralized and fair reward mechanism

The Bittensor network offers a decentralized reward system to incentivize AI model training and services. Unlike traditional centralized AI platforms, every node contributing to Bittensor earns rewards proportional to its contribution. In other words, the more valuable work you do on the network, the more TAO tokens you are rewarded with. This mechanism creates a fair competitive and collaborative environment among participants. The answer to the question “How does Bittensor work?” lies in this reward system: Miners focus on producing useful responses, while validators select the best contributions; ultimately, the entire network benefits.

TAO token incentives, halving, and economic model

Bittensor's native cryptocurrency, TAO, is both the network's reward and governance token. Miners and validators earn TAO for their work, while subnetwork founders are also rewarded with TAO at certain rates if they successfully operate a network. The TAO token is designed to have a maximum supply of 21 million and is continuously issued at a rate of 1 TAO per block every 12 seconds; approximately every 4 years, this issuance amount is halved (similar to Bitcoin’s “halving”). This allows for high rewards to be distributed in the early stages to grow the network, while gradually slowing down the supply increase over time to preserve the token's scarcity and value. TAO's economic model is entirely transparent and community-focused: there is no pre-mining, private sales, or team-allocated tokens; all tokens are earned by those contributing to the network. This simple and fair tokenomics structure is a key factor in building investor confidence.

An open network based on information sharing

Another aspect that makes Bittensor valuable is that it creates an ecosystem where artificial intelligence models and knowledge are openly shared. Each participating node contributes its own model or data to the network, thereby expanding the collective intelligence pool. As a result, the network becomes a collective artificial intelligence marketplace that is not controlled by a single central authority. For example, when a user asks a question or submits a task to the Bittensor network, miners capable of generating the best response are activated; validators evaluate these responses, and high-quality answers are rewarded with TAO. This cycle creates an environment where everyone can contribute to knowledge and receive compensation in return. As a result, Bittensor truly embodies the concept of an “open-source AI network.” The code is open, data and models (within certain limits) can be shared, and everyone can contribute to improving the network.

The convergence of Web3 and AI

Bittensor uniquely combines Web3 and artificial intelligence in the crypto world. It applies the blockchain innovations we see in decentralized finance (DeFi) or NFT areas to the field of artificial intelligence. In this regard, Bittensor is considered one of the pioneers of the growing AI-crypto intersection. By integrating AI models into the blockchain, it lays the groundwork for the emerging trend of “tokenizing AI productivity” in the future.

Currently, Bittensor has become one of the largest AI-focused crypto projects in terms of market cap, and the “Bittensor coin future” is seen as bright by many investors. Of course, this expectation will depend on the project successfully achieving its technological goals. However, considering the potential at the intersection of AI and blockchain, Bittensor is considered to appeal to a large market in the long term.

The diagram above clearly shows the general architecture of the Bittensor network. At the top is the Application Layer, where external users access AI services on the subnets. In the middle are the subnets, referred to as the Execution Layer. Each subnet is specifically designed for a particular AI task; miners (yellow) run the relevant model within the subnet, while validators (green) evaluate the miners' output. Subnet owners (creators) determine the incentive mechanism and rules. TAO rewards generated within a subnet are typically distributed as follows: 41% to miners, 41% to validators, and 18% to the subnet owner. The Root Subnet (Subnet-0), to which all subnets are connected, acts as a Funding Layer in the upper layer; here, 64 validators comparatively evaluate the performance of the subnets and determine how much TAO emission will be allocated to each subnet using the Yuma consensus algorithm. At the bottom is the Blockchain Layer (Subtensor chain), which is a Polkadot Substrate-based private blockchain that records all transactions and issues TAO tokens.

Who is the Founder of Bittensor?

The Bittensor project was developed by a team called the Opentensor Foundation. The names behind the project have been transparently shared with the public. The co-founders of Bittensor are Jacob Robert Steeves, a former Google engineer, and Dr. Ala Shaabana, a researcher specializing in machine learning. Founded in 2019, the Opentensor Foundation officially launched the Bittensor network in 2021, turning its Web3-based artificial intelligence vision into reality.

The founding team consists of experienced names in the fields of blockchain and artificial intelligence. Jacob Steeves, who gained engineering experience at Google and saw the limitations of centralized systems, leads Bittensor. Ala Shaabana is a scientist who has conducted academic research on machine learning and strengthens the AI side of the project. It is known that there are more than 30 team members within the Opentensor Foundation, and the vast majority of them are focused on engineering and research.

Since Bittensor is an open-source project, it is open to contributions from the global community outside of the founding team. The project's code on GitHub can be reviewed and developed by anyone. This community-focused approach reflects the founders' vision of “digital public benefit.” In other words, Bittensor is seen as a platform that aims to be a shared value for global internet users rather than a product belonging to a few founders or companies. The founders' goal is to make artificial intelligence an infrastructure that everyone can access and contribute to, much like open internet standards. In this regard, project management is based on transparent management principles. As mentioned above, important decisions and updates are shared with the community for discussion, and token holders can participate in governance processes.

Frequently Asked Questions (FAQ)

Below, you can find frequently asked questions about Bittensor:

• What is Bittensor and what is its purpose?: Bittensor is a decentralized artificial intelligence network developed for training and sharing artificial intelligence models on an open platform. The main goal of the project is to create a blockchain-based AI marketplace as an alternative to closed AI systems controlled by large technology companies. This allows independent developers or small teams to offer their models on a global network and earn rewards, while users can benefit from this collective intelligence. Bittensor was launched in 2021 by the Opentensor Foundation and aims to bring innovation to AI with a Web3 approach.
• How does the TAO token work, and how can it be earned? The TAO token is the native cryptocurrency of the Bittensor network and serves for rewards and governance within the network. The primary way to earn TAO is by contributing to the network as a miner or validator node. As a miner (running an AI model), if you complete specific tasks in subnets and produce high-quality results, you receive a share of the TAO rewards generated per block. Similarly, as a validator, you can earn TAO rewards by evaluating miners' work and selecting the best ones. A total of 1 TAO is minted with each block produced, and this reward is distributed among miners and validators in the system (e.g., 50/50). Thanks to Bittensor's Proof of Intelligence consensus mechanism, token distribution is based on the information value provided by the models. TAO tokens can also be earned through staking: by delegating (staking) your TAO tokens to trusted validators on the network, you can receive a share of the rewards they earn. The total supply of TAO tokens is limited to 21 million, and the reward issuance rate is halved approximately every 4 years.
• Is the Bittensor network secure? The Bittensor network ensures security through blockchain technology and innovative consensus mechanisms. The Subtensor blockchain, which forms the foundation of the network, is an independent layer-1 chain built using Polkadot's Substrate SDK. All transactions and token balances are cryptographically secured on this blockchain. On the consensus side, Bittensor uses a proprietary algorithm called Yuma consensus instead of classic PoW or PoS; this algorithm achieves consensus in reward distribution based on the principle of validators voting on miners. The Yuma consensus is designed to be resistant to malicious behavior on the network (it will function correctly even if up to 50% of the network is malicious). The open-source nature of Bittensor's code is an added security benefit—developers worldwide can review the code and identify any issues. On the other hand, it is known that in the early stages of the project, the Subtensor blockchain is controlled by the Opentensor Foundation (with Proof-of-Authority validators). While this technically requires an element of trust, the goal is to fully transfer management to the community as the network matures. To date, there have been no notable attacks or security breaches on the Bittensor network. However, as with any young blockchain project, security risks are always present for Bittensor.
• What is the difference between Bittensor and centralized AI platforms? There are many differences that distinguish Bittensor from centralized AI platforms such as OpenAI. The most fundamental difference is that control and access are distributed. In centralized AI platforms, model training and services take place on a single company's infrastructure; data and models are typically kept closed. In Bittensor, however, the network is completely decentralized, with no single authority holding all the control. This allows individuals and organizations worldwide to join the Bittensor network and either provide or use AI models. The second key difference is the incentive structure: On centralized platforms, researchers or engineers are typically compensated for their work through salaries or contracts, while users pay for the service but gain nothing beyond the output they receive. In the Bittensor model, everyone who contributes to the network earns crypto rewards. The main difference lies in transparency and access: Bittensor is open-source, and network data is transparent on the blockchain, whereas centralized platforms may be closed-source, and users may not know how the model works. Additionally, models on the Bittensor network are accessible to token holders (for example, you can ask questions and receive answers by staking or spending TAO), which provides a form of open AI service.
• What does Bittensor promise for the future? The future of the Bittensor project and the TAO coin is attracting attention with the growth of the artificial intelligence field. First, as the Bittensor network continues to grow, more specialized subnets are expected to emerge. In the future, specialized subnets focused on areas such as text generation, machine translation, autonomous vehicle visual perception, and bioinformatics could operate under the Bittensor umbrella. In fact, major language models such as ChatTensor and Bittensor Language Model (BTLM), which were introduced in 2023, have already started to be run on the network. In the future, the number and variety of these models may increase and Bittensor may become a kind of “AI App Store” or “AI marketplace”. Secondly, Bittensor’s management may be completely transferred to the community and evolve into a DAO (Decentralized Autonomous Organization) structure. Thus, TAO owners will have even more say in the future direction of the network. Thirdly, there are promises of technological scaling: Thanks to its subnet architecture, Bittensor has gained a structure that can increase the number of participants and transaction volume to very large dimensions. In the coming years, it has the potential to become an “internet-wide” AI network with hundreds of subnets and tens of thousands of participants. However, as with any cryptocurrency investment, it would be best for each investor to act in line with their own research.

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