Inside Bittensor, the blockchain for AI

Oct 30, 2025

Bittensor is a blockchain protocol that decentralizes artificial intelligence, turning machine learning into an open, peer-to-peer marketplace.

Founded in 2021 by Jacob Steeves and Ala Shaabana, Bittensor aims to counter the growing centralization of AI under tech giants like OpenAI. Instead of closed, corporate-owned models, Bittensor rewards open-source intelligence, creating a “digital hive mind” where developers contribute AI models that collaborate, compete, and earn rewards based on their usefulness.

As of October 2025, Bittensor hosts over 129 active subnets, each dedicated to different AI tasks. Institutional attention rising, Bittensor is emerging as a cornerstone of the AI-crypto intersection.

How does Bittensor work?

Bittensor runs on Subtensor, a proof-of-stake blockchain that coordinates decentralized AI development.

The network is divided into subnets, which are like specialized workspaces for different types of AI or compute tasks, like text generation, code writing, or even drug discovery.

Miners deploy and train models that provide these services.
Validators stake Bittensor’s native token TAO and evaluate these models using Yuma Consensus, an algorithm that scores the relative value of each model’s output.
Subnet owners burn TAO to register new subnets and set the rules for participation.

Each subnet functions as a self-contained economy: high-performing models earn more TAO rewards, while validators ensure quality and integrity. Examples include Sportstensor for sports predictions integrated with Polymarket, Ridges AI for code generation, and Nova for molecular modeling.

Recent upgrades like EVM compatibility now allow smart contracts to run directly on subnets, connecting AI applications with decentralized finance (DeFi).

Tokenomics: Scarcity meets intelligence

TAO combines Bitcoin-style scarcity with a utility layer built for AI. Its total supply is also capped at 21 million, with daily emissions of 7,200 TAO that halve every four years. The first halving on December 12, 2025 will cut emissions to 3,600 TAO per day, reducing supply as demand rises. This fixed, disinflationary structure introduces predictable scarcity while rewarding participation.

TAO serves three main functions:

Staking: Validators and delegators secure the network and earn new TAO.
Governance: Stakers vote on proposals through a bicameral governance model (Senate-Triumvirate) that becomes more decentralized over time.
Utility: TAO powers for subnet creation, transaction fees, and collateral for subnet-specific alpha tokens (α) that control emission rights and yield opportunities.

No TAO was pre-mined or sold through an initial coin offering (ICO). All tokens are earned through mining or staking. Currently, around 73% of supply is staked, reflecting strong long-term conviction. Although large holders like DCG and Polychain hold significant stakes, the Dynamic TAO upgrade redistributes rewards through market-based mechanisms to enhance decentralization.

The investment case of Bittensor

Bittensor represents a new frontier where intelligence becomes a tradeable asset. As AI continues to reshape productivity and value creation, TAO captures that growth by combining Bitcoin’s scarcity with decentralized coordination of AI models.

Its upcoming halving, EVM integration, and growing institutional interest make TAO one of the most asymmetric opportunities in the emerging AI-crypto economy. Just as Bitcoin monetized energy, Bittensor monetizes intelligence, rewarding open, collaborative innovation over corporate control.

In a world dominated by closed AI systems, Bittensor offers an open alternative - a permissionless network where intelligence is built, valued, and owned by its own users.

This report has been prepared and issued by 21Shares AG for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however, we do not guarantee the accuracy or completeness of this report. Crypto asset trading involves a high degree of risk. The crypto asset market is new to many and unproven and may have the potential not to grow as expected.‍Currently, there is relatively small use of crypto assets in the retail and commercial marketplace in comparison to relatively large use by speculators, thus contributing to price volatility that could adversely affect an investment in crypto assets. In order to participate in the trading of crypto assets, you should be capable of evaluating the merits and risks of the investment and be able to bear the economic risk of losing your entire investment.‍Nothing herein does or should be considered as an offer to buy or sell or solicitation to buy or invest in crypto assets or derivatives. This report is provided for information and research purposes only and should not be construed or presented as an offer or solicitation for any investment. The information provided does not constitute a prospectus or any offering and does not contain or constitute an offer to sell or solicit an offer to invest in any jurisdiction. The crypto assets or derivatives and/or any services contained or referred to herein may not be suitable for you and it is recommended that you consult an independent advisor. Nothing herein constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances or otherwise constitutes a personal recommendation. Neither 21Shares AG nor any of its affiliates accept liability for loss arising from the use of the material presented or discussed herein.‍Readers are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors.‍This report may contain or refer to material that is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject 21Shares AG or any of its affiliates to any registration, affiliation, approval or licensing requirement within such jurisdiction.

‍

Alle anzeigen