Amid the rapid development of artificial intelligence (AI) and blockchain technology, investors have been looking for innovative projects that can connect the two industries. Bittensor, a decentralized AI market, is attracting the attention of many venture capital firms. Companies such as Polychain, Digital Money Group and Dao5 have purchased hundreds of millions of dollars worth of the project token TAO. The token powers a range of AI-related services in the protocol, such as model training and data storage.
The rise and development of Bittensor
Bittensor founder Jacob Steeves said in an interview with Fortune magazine that the rise of centralized tools launched by companies such as OpenAI, Google and Meta has validated the effectiveness of his project. Although he has been developing the project since 2015, Bittensor has vigorously refuted accusations of taking advantage of the AI craze.
Initially, Bittensor's tokens could only be obtained through mining, secondary exchanges and over-the-counter markets, but now Binance and Crypto.com have listed TAO and opened trading. This marks a major step forward for the little-known project.
Investor support
Bittensor is relatively less well-known than Sam Altman-backed Worldcoin, which aims to develop a new type of identity verification mechanism that verifies a person's identity through biometrics and has raised more than $200 million. However, Bittensor has also attracted some heavyweight investors.
Polychain, a venture capital firm founded by early Coinbase employee Olaf Carlson-Wee, incubated Bittensor in 2019 and holds about $200 million in Bittensor tokens, according to people familiar with the matter. "The incentive mechanism used by Bittensor is conceptually similar to Bitcoin mining, but instead of building a payment network, it builds an open source public artificial intelligence," Carlson-Wee told Fortune magazine.
In addition, Dao5, an investment fund founded by Polychain alumnus Tekin Salimi, holds about $50 million in TAO and is an early supporter of the Bittensor ecosystem. Digital Currency Group, founded by Barry Silbert, is also a major investor, holding about $100 million in TAO.
What makes decentralized AI unique
Steeves said he first came up with the idea for Bittensor in 2015 while researching the Bitcoin network. Created by the pseudonymous Satoshi Nakamoto, Bitcoin uses an innovative technology called mining to record and process transactions, creating a payment platform that does not require the involvement of individuals or institutions. Steeves hopes to use Bitcoin's incentive mechanism to create a supercomputer larger than any centralized entity such as a government or company can create.
Bittensor was created to try to repurpose Bitcoin's mechanism to meet the large number of functions required by the emerging field of AI, including everything from data storage to training machine learning models. Compared to Bitcoin's simple transaction model, the Bittensor network provides different types of functions, and miners participate in different types of competitions based on the functions they provide and are incentivized by receiving TAO.
These different tools are distributed across 32 "subnets," or private networks, providing services such as data storage, access to other AI chatbots, and scraping and pricing oracles. Although Bittensor's complex design makes it difficult to explain to the public, the project has a passionate community of stakeholders, from miners and validators to projects built on Bittensor.
Competitiveness and Future Outlook
As Bittensor has grown rapidly, its biggest breakthrough to date may be the recent listing on Binance, which opened trading for TAO tokens. Steeves noted that the annualized trading volume of TAO on Binance on its first day of listing exceeded the GDP of Peru, where he has lived for the past four years.
Still, Steeves insisted that the project's ambitions are far greater than the price action of its tokens. Due to its intricate system of subnets and related projects, the network will continue to evolve based on demand and the dynamics between miners and validators as they strive to create balance through incentive mechanisms.
"It's a constant turmoil - a battle between light and dark," Steeves said in an interview. "That's why we like the Taoist symbol (note: Tai Chi diagram)."
As companies like OpenAI continue to dominate, Bittensor will provide an answer to what he sees as the real threat to the existence of artificial intelligence. "The real problem is not AI taking over the world, but what it wants to sell," Steeves said. "The power of humanity and the world is so concentrated that all of us are just slaves to these big companies."
Conclusion: Bittensor, as a decentralized AI market, is gradually attracting more and more attention and investment. Its unique mechanism and strong network of supporters make it a leader in the field of AI and blockchain in the future. For investors who want to gain a foothold in this emerging field, Bittensor is undoubtedly a project worth paying attention to.