Bittensor is a decentralized network that rewards users for contributing useful AI. Anyone can run models, provide compute power, or share valuable data. They’ll bag TAO tokens as rewards based on the real value they add to the ecosystem.
What is Bittensor
AI today is largely controlled by a few tech giants, raising concerns about bias, lack of transparency, and limited access. Bittensor is a global marketplace that tackles this by decentralizing AI. It makes AI development open and collaborative by using blockchain.
How does Bittensor work?
Bittensor runs on its own blockchain (Subtensor) and uses a unique consensus mechanism called “Proof of Intelligence.” Instead of rewarding raw computing power or money, contributors earn the native TAO token for providing valuable AI services. This can include services that answer questions, classify images, or generate code.
The network is organized into specialized subnets, each focused on a specific AI task. This structure allows Bittensor to scale as a collection of expert AI services, all working in parallel.
TAO token is the foundation of Bittensor’s economy. It’s both a reward for contributors and a way to access AI services on the network. Like Bitcoin, TAO has a capped supply and a halving schedule.
| Category | Details |
|---|---|
| Founding Year | 2020 |
| Market Cap ($TAO) | ~$4.1B USD (May 2025) |
| Token utility | Network reward currency, staking rewards, governance value, payment to access the AI services. |
| Architecture | Subnet-based — Each subnet focuses on a specific AI task (e.g. language, vision, code, etc.). Miners provide model outputs, validators score them, and subnet operators manage coordination. Proof of Intelligence consensus mechanism rewards nodes that provide valuable machine learning models and output to the protocol. |
| Main Competitors | Artificial Superintelligence Alliance ($FET) - Ocean, Fetch.ai, SingularityNet, Cudos alliance; Sahara AI; Near; Kite AI |
Bittensor Core Offering and Features
A Peak Into Bittensor’s Ecosystem
Bittensor’s blockchain coordinates a diverse network of subnets. Each subnet acts as an incentive-driven marketplace focused on a specific AI task or “digital commodity.” For example, one subnet might specialize in language translation, while another handles image generation.
Subtensor provides the foundation for decentralization and keeps a record of all activity. Meanwhile, subnets let Bittensor scale by running different AI services in parallel. Together, they form a “network of neural networks”—a collection of specialized AI models all accessible through one open platform.
Roles in the Bittensor Ecosystem
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Miners run AI models that perform various specialized tasks, like answering questions or generating content. They compete to deliver the best results and earn TAO based on the quality of their output.
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Validators test and rate the miners’ results. Their rewards depend on how closely their scores match the network’s consensus. If a validator’s score aligns with most other validators, they earn more. If their score is far off, they earn less or may even be penalized. This encourages fair and accurate scoring.
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Subnet Creators launch new subnets by defining tasks and setting reward rules. In return, they receive a portion of that subnet’s emissions.
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Stakers support validators by delegating their TAO tokens. This boosts a validator’s influence and earning potential, while stakers earn a share of their rewards.
For the simplest explanation of how Bittensor works, check out the video linked below.
Source: Youtube
What’s Proof of Intelligence?
Bittensor replaces traditional consensus methods like Proof-of-Work or Proof-of-Stake with Proof of Intelligence, also called Yuma consensus. Here, nodes earn rewards not for computing power or token holdings, but for providing valuable AI work. Validators oversee miners and score their responses for value and accuracy. These scores are combined to determine each miner’s overall performance. The higher the performance, the greater the miner’s share of TAO rewards.
What are Alpha Tokens?
Bittensor introduced Alpha tokens in early 2025 with the Dynamic TAO (dTAO) upgrade. These tokens are linked to individual subnets in Bittensor. Each subnet focuses on a specific AI task. If you believe a subnet is valuable, you can stake TAO into it.
Before dTAO, users delegated TAO to validators who managed rewards for the whole network. Now, by staking at the subnet level, you buy alpha tokens for that specific subnet with TAO tokens The more support a subnet gets, the more valuable its alpha token becomes, and the more rewards that subnet can earn. This system lets the community “vote” with their tokens, directing attention and resources to the best AI projects. While it adds some complexity, it makes Bittensor more open, competitive, and community-driven.
With dTAO, Bittensor also introduced burned subnet registration fees. When a new subnet is launched, nearly all of the TAO fee is permanently removed from circulation, making subnet creation a deflationary force in the network.
As shown in the chart below, the number of subnets grew rapidly in early 2025 after the Dynamic TAO upgrade.
Source: taostats.io
Network Health Metric Comparison
Team Linity reviewed Bittensor’s network health metrics. We compared 2024 baseline performance against current 2025 indicators to assess the protocol's evolution and growth trajectory.
| Metric | 2024 | May 2025 | Trend |
|---|---|---|---|
| Active Subnets | ~36 | ~100+ | ▲ Strong growth |
| Validator Centralization | High | Medium–Low (post-dTAO) | ▼ Reduced centralization |
| % TAO Staked | ~81% | ~75–85% | ● Stable, slightly diversified |
| TAO in Subnet Staking | NA | ~6% | ▲ New growth trajectory |
| TAO Holders | ~104,000 | ~203,000 | ▲ +95% year-over-year increase |
| AI Compute Capacity | Centralized, limited | Diverse, high-scale | ▲ Expanded and decentralized |
Note: This data was compiled in May 2025.
Bittensor’s Market Share & Performance
Bittensor’s TAO token is now among the top 30 crypto assets by market cap. As of mid-2025, its market cap is around $4–4.2 billion, ahead of other AI crypto projects. Daily trading volumes often range between $200–$300 million, which is similar to competitor's FET token.
If we compare token prices from the end of 2024 to May 2025, TAO is nearly back to breakeven in percentage terms, while FET is down around 28%.Source: Tradingview
TAO's liquidity improved after its Binance listing in April 2024, making it more accessible. With the latest increase from $183 to $470 in April / May 2025, it seems that the force is strong with this one (cue the Star Wars analogy).
Note that TAO follows a continuous emission model where one TAO is minted approximately every 12 seconds (that’s 7,200 TAO per day).
These rewards are distributed across the network’s main participants:
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41% to miners who contribute useful AI outputs
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41% to validators who evaluate the quality of those outputs
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18% to subnet owners who create and manage individual AI subnets
Bittensor has a capped supply of 21 million tokens like Bitcoin. And the first halving may happen in late 2025. After which, block rewards will be cut in half. This scenario will reduce the emission rate and increase the token’s scarcity over time.
The tokenomics design lets participants earn TAO mainly through active involvement, not through pre-mining or pre-allocation. This approach supports fair distribution.
Bittensor’s Continued Growth
Bittensor’s growth is very obvious. Its main innovation, AI subnets, has expanded fast. There are now over 100 subnets (from 33 in 2023).
Community engagement is strong, especially in subnet-specific groups. Many participants are AI developers or technical users. While still smaller than major crypto communities, the network is growing steadily. Tools like TAOStats show rising subnet activity, staked TAO, and total accounts. These metrics confirm that the network’s adoption is real.
In May 2025, 70% of all issued TAO tokens were staked, showing that staking incentives are attractive and users have strong confidence in the token's performance. Compared to some of the other projects, Bittensor is among the ones with the highest staking ratio.
Source: Stakingrewards; May 29th, 2025
On average, stakers receive about 80–90% of the rewards earned by validators, depending on each validator’s commission rate. This means that when a validator earns TAO from network emissions, the majority is distributed to the TAO stakers who support them.
The actual staking yield varies based on validator performance and total network stake. Currently. the APYs typically range between 11% and 18%.
Source: Taostats
Bittensor and its Competitors
Bittensor leads the AI crypto sector in market value and visibility. But comparing it to other AI crypto projects is tricky because it works differently and has different goals.
Here’s a quick look at some other projects in this space:
In 2024, three major projects made a big move. Fetch.ai, SingularityNET, and Ocean Protocol each tackled different parts of decentralized AI, but they decided to merge their tokens into ASI (Artificial Superintelligence Token).Source: Fetch.ai on X
It now trades under the FET ticker. They wanted to unite their ecosystems, stop competing with each other, and combine their developer and investor resources. With one shared token, they can better compete against centralized AI giants while still pursuing their individual missions.
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Fetch.ai builds autonomous AI agents for real-world uses like transportation and logistics.
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SingularityNET runs a platform where developers can offer and integrate AI services.
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Ocean Protocol provides tools for secure data sharing and monetization.
Bittensor takes a different approach. It doesn't build individual applications. Instead, it's creating a decentralized neural network where AI models are the main asset. This "network of networks" serves as AI infrastructure itself, not just another platform that runs or sells AI applications.
Bittensor also stands apart from crypto competitors because it's a standalone Layer-1 blockchain built from scratch. It's not an ERC-20 token that depends on another network. This gives it more technical flexibility and control, but it also means Bittensor must handle its own scalability, governance, and security.
Bittensor doesn't compete directly with corporate giants like OpenAI, Google, or Microsoft. Instead, it offers a community-driven alternative to their closed models. Rather than building massive models, Bittensor enables networks of contributors to create AI services together. Some subnets have even beaten centralized systems in specific benchmarks. Bittensor aims to become a complementary layer in the broader AI ecosystem.
Bittensor’s Future Trajectory
The global AI industry could hit $1 trillion annually within five years. Decentralized AI platforms will likely play a bigger role as trust, privacy, and openness become more important.
Source: Bain & Company Report
Bittensor sits in a sweet spot. It combines AI growth with Web3. In 2023 alone, investors poured over $42B into AI startups. More Web3 projects are adding AI features, which opens doors for collaboration.
Bittensor could become a hub for crowd-sourced AI development, like how GitHub became the go-to place for open-source code. It could also power AI services in decentralized apps, with users paying in TAO.
But Bittensor faces a big scalability challenge. By February 2025, a full archival node needed 2TB of storage. That's more than Bitcoin (641GB) or Ethereum requires (1248GB). Without fixes, running full nodes may become too costly for most users. The team supports lightweight nodes to help, but they'll probably need to think of some longer-term solutions.
TAO's halving in late 2025 will cut emissions from 7,200 TAO/day to 3,600. This could lower rewards for miners and validators. If TAO's price doesn't rise or usage fees don't grow, some contributors may quit.
The community has high expectations for Bittensor. It must now prove it can deliver real-world AI services while staying decentralized and scalable.
To illustrate how heated the crypto AI industry has become, over $1.1 billion has been raised year-to-date (May 2024 to May 2025).
Source: Rootdata
Team of Bittensor
Funding of Bittensor
NA
No Token Sale
Bittensor has not raised capital through traditional venture capital rounds (no seed or Series A rounds have been publicly announced as of 2025). In fact, the team launched the project with a “fair launch” approach. This means no ICO, no pre-mine, and no tokens set aside for investors or insiders.
Bittensor review
Why We're Reviewing Bittensor: Bittensor is one of the most talked-about projects in the AI and crypto space right now. It's building a decentralized network where people can earn rewards for running useful AI models. This means anyone can take part in developing machine learning, not just big tech companies. The project is growing fast, especially after new updates like Dynamic TAO and EVM compatibility. These upgrades are bringing more developers and users into the ecosystem. With AI and crypto both trending, we think Bittensor is worth a closer look.
The Bright Side
At Linity, we think Bittensor is doing something truly unique in crypto. Most blockchain projects struggle to find real utility trading. But Bittensor has built a working network where people do actual AI contributions. What we like most is how fast it's growing - from just a few subnets to over 60 active ones. This shows real developers are joining, and this isn’t just hype.
The timing feels right too. AI is getting very expensive for companies, so Bittensor's shared approach could save money while keeping quality high. Adding EVM support was smart because it lets developers use tools they already know instead of learning completely new ones.
We're excited to see how Dynamic TAO grows. If it can spread power away from the first validators, it could show other networks how to fix centralization problems.
Source: Bittensor
The Dark Side
Our main concern isn't technical - it's market positioning. Bittensor has to fight against huge AI companies who can make their services very cheap or even free. While decentralization sounds good, most businesses care more about reliability and support than ideas about freedom.
The problem with validators controlling too much goes deeper than just early users having advantages. Even with Dynamic TAO, we see that established validators have big benefits in getting more stake and keeping their power. This might create a new group of powerful players instead of true decentralization.
Looking at everyday use, the system is still too hard for most people. The coldkey/hotkey setup and technical needs create problems that most users won't deal with. Until Bittensor can make this simpler, it will only work for tech-smart users.
The legal situation also worries us. Unlike simple DeFi projects, Bittensor runs AI models that might fall under new AI safety rules. Having both crypto and AI regulations to deal with creates double the legal risk, which could really hurt the project's growth.
What's Next for Bittensor?
Bittensor is now focused on growing its network and improving its technology. With Dynamic TAO fully launched in 2025, the network now gives rewards based on market signals. The team is also working on scalability solutions to handle the fast growth of the network and prepare for more users.
Source: Medium
There are already 114 subnets, and that number is expected to grow quickly.
On the market side, institutional interest is increasing. Some funds like Polychain Capital and dao5 have started to support TAO, which may bring more attention to the project. Still, Bittensor faces tough competition from large AI companies with more money and resources.
In the long run, Bittensor wants to become a fully open and global AI network. Its goal is to give people everywhere a chance to build and share AI, without relying on big tech platforms. If it continues to grow and improve, Bittensor could become a key part of the future AI economy.
Pros
Revolutionary Consensus Mechanism
Bittensor uses a new system called Proof of Intelligence. It rewards people who create high-quality AI responses, not just those with powerful computers. This means that smart and useful AI models get more rewards. The network checks the answers using rules set by each subnet. This system helps AI developers focus on creating better models instead of using more energy or hardware.
True Decentralization
Bittensor is fully decentralized. No single company or group controls the network. Anyone can create a subnet, join the system, and compete for rewards. There are no permission rules or closed systems. This gives everyone a fair chance to join and build the ecosystem.
Proven Economic Model
The Bittensor network uses the TAO token. TAO has a fixed supply of 21 million, like Bitcoin. This makes it a scarce and valuable asset. The network gives out TAO as rewards in a planned and fair way. A new system called Dynamic TAO helps decide which subnets should get more rewards, based on how useful they are. This makes the system stronger and more fair for everyone involved.
Diverse Ecosystem
Bittensor has many different subnets. Each one focuses on a different task, such as training AI models, creating data, or helping users access AI tools. Some examples include Nous for fine-tuning, Cortex.t for data, and TAO Hash for mining. This wide range of subnets helps Bittensor grow and stay useful for most developers and users.
Open Source Foundation
Everything in Bittensor is open source. This means the code is public, and anyone can see it, use it, or help improve it. There is no private company behind the project. Changes and updates come from the community. This helps build trust and allows people from around the world to work together. Open development also leads to faster progress and more creative ideas.
Future-Ready Architecture
Bittensor is built to adapt and grow. Its design allows for new subnets with new ideas at any time. Developers can create systems for future AI needs without changing the whole network. Soon, Bittensor will also support smart contracts, making it easier to build new apps. This makes the network ready for whatever changes come in AI and technology.
Cons
Blockchain Scalability Crisis
Bittensor’s network stores more data over time as more subnets and users join. This creates a scalability problem. The more data the blockchain stores, the more expensive and harder it becomes for people to run full nodes. If only a few can afford to validate the network, decentralization is at risk. This could lead to fewer people being able to check or run the system, making it less open and secure.
Economic Centralization Risk
Today, a small number of top validators control most of the TAO emissions. This means they decide which subnets get rewarded. Bittensor is consciously designed to be decentralized. But this setup can feel more like Proof of Authority, where only a few trusted parties make the big decisions. If not changed, it may stop new or smaller players from joining or earning fairly.
High Technical Barrier
Using Bittensor is technically difficult. New users must understand complex systems like the coldkey/hotkey setup, manage private keys, and run mining software. This can be hard even for experienced users. Most people without technical skills may struggle to join or take part in mining or subnet development. This limits growth and makes the network less accessible to the average user.
Unproven Long-term Viability
Bittensor is a young project, launched in 2021. While early progress looks strong, it has not yet faced a full crypto market cycle or economic downturn. Key systems like Dynamic TAO are still new and not fully tested at scale. As a result, it's hard to say how the network will perform in the long run. Many of its ideas are still theoretical.
Fierce Competition
Bittensor competes with major centralized AI companies like OpenAI and Google. These companies have more money, stronger brands, and better access to government support. They can build and launch powerful AI tools faster, while also following legal and safety standards more easily. Bittensor’s open and decentralized model is interesting, but it may struggle to match the speed, reach, and funding of its bigger rivals.
Regulatory Uncertainty
Rules around AI and crypto are changing quickly. Governments are still deciding how to treat AI models and tokens like TAO. There is no clear answer yet on whether TAO will be seen as a utility token, security, or something else. This lack of clarity creates legal risk, especially if regulators decide to take strong action or restrict certain activities on the network in the future.
Opportunities
Staking
APY: 16.5-19.1%
Bittensor Staking
Learn how to stake your TAO and earn potential rewards.