Can Bittensor Achieve Bitcoin-Style Success?

Bitcoin is being embraced by Wall Street in a way that seems to contradict its original principles. Meanwhile, Bittensor emerges as a challenge to centralization, presenting a captivating narrative amidst growing concerns about AI's dominance.

Key Takeaways

Bittensor aims to decentralize AI services using its cryptocurrency, TAO.
The network recently completed a halving, reducing the minting of coins, similar to Bitcoin.
Bittensor operates under a 'proof-of-intelligence' model, focusing on the quality of AI task execution.
There are ongoing debates about Bittensor's decentralization, particularly after a significant security incident.
The growth of the subnet community is crucial for Bittensor's success, with a dramatic increase in subnets recently.
The potential value of Bittensor could surpass that of Bitcoin, depending on future perceptions of centralized AI systems.

Bittensor and its cryptocurrency, TAO, aim to decentralize AI services. Despite a significant drop of nearly 53% in 2025, some enthusiasts view Bittensor as the successor to Bitcoin for the AI era. But how grounded is this optimism?

Understanding Bittensor: The Premise and Its Potential

On December 15, Bittensor recently completed a reward halving, which reduced the number of newly minted coins. This narrative is familiar to many investors, as it echoes previous discussions surrounding Bitcoin.

Reflecting on Bittensor's first halving brings back memories of Bitcoin's early days, where both similarities and differences stand out.

Many cryptocurrencies have attempted to position themselves as “the next Bitcoin” because of the potential profits tied to that story. Yet, Bittensor might hold significant long-term value if it can navigate its inherent challenges.

The narrative of Bittensor parallels that of Bitcoin: a new network challenging the status quo dominated by major players.

Over the years, a mantra of “long Bitcoin, short the banks” has resounded throughout the crypto community. Despite Bitcoin's newfound acceptance within Wall Street, this concept has persisted.

The concern is rooted in that AI leaders like OpenAI, Anthropic, and Deepseek are becoming too powerful, alarming many observers.

Bittensor seeks to decentralize AI workloads and replace traditional proof-of-work models with meaningful use cases that directly contribute to AI development.

“Bitcoin showed that cryptographic incentives could coordinate a global network to maintain a secure ledger,” says Evan Malanga, an executive at Yuma, one of Bittensor's key supporters. “Bittensor takes that same concept and channels computational power toward tangible benefits by training and operating AI models.”

The Question of Being Another Bitcoin

Yuma, a subsidiary of Digital Currency Group (DCG), has a history of backing various cryptocurrencies, including Bitcoin, Zcash, and Decentraland. The firm's CEO, Barry Silbert, openly supports Bittensor, a positive indication for some investors.

Bittensor displays several characteristics reminiscent of Bitcoin, notably its capped supply of 21 million TAO coins, mirroring Bitcoin. Additionally, Bittensor undergoes halvings, with the latest reducing its daily rewards from 7,200 TAO to 3,600 TAO.

Instead of relying on energy-intensive proof-of-work, Bittensor utilizes a model called proof-of-intelligence, in which nodes must demonstrate their abilities by executing AI-related tasks. The quality of a node’s output directly influences its chances of receiving TAO rewards.

Currently, nodes in the Bittensor network are allocated to one of 128 subnets, each specializing in different AI tasks.

“Each subnet acts like a specific marketplace for AI services, focusing on areas like image generation or language processing,” explains Arrash Yasavolian, co-founder of Taoshi, which operates a financial intelligence subnet.

Centralization vs. Decentralization in AI

There's considerable concern in the AI sphere regarding a few firms holding excessive power. Such concentration can lead to higher prices and subpar services in any industry.

Bittensor aims to democratize AI, featuring independent node operators that drive its AI services.

"AI is reshaping all industries," says Ken Jon Miyachi, CEO of BitMind, which focuses on deepfake detection within Bittensor. “While Bitcoin transformed value storage, Bittensor is revolutionizing global economic systems by making intelligence accessible worldwide.”

However, questions about the network's decentralization surfaced after an $8 million hack forced Bittensor into a “safe mode” on July 10, 2024, stalling transactions.

“Today, there are valid concerns regarding centralization,” notes Yasavolian from Taoshi. “The OpenTensor foundation is currently the sole entity tasked with block validation. The top ten largest subnet validators control around 67% of the network's stake weight.”

Critics argue that Bittensor's security issues and the ability to shut down the network undermine its decentralization claims. Supporters assert that full decentralization will evolve over time, aiming for neutrality similar to Bitcoin’s intended role as a store of value.

“Bittensor's goal is to emerge as a credible tool for AI development, following a gradual decentralization approach akin to Ethereum’s evolution,” Yasavolian added.

Addressing AI Concerns

To foster greater decentralization and incorporate varied opinions, Bittensor encourages engagement from subnet operators. These participants are heavily investing in the network and are eager to share insights, leading to substantial subnet growth — a rise of 97% from 65 to 128 since early 2025.

Sergey Khusnetdinov, Director of AI at Gain Ventures, emphasizes the importance of the subnet community to Bittensor’s future.

“The result is a meritocratic ecosystem where valuable intelligence originates not from a single lab or corporation, but from a global, permissionless community.”

Centralized AI companies currently boast exaggerated valuations—OpenAI is valued at $500 billion, Anthropic at $350 billion, and China’s Deepseek rumored to be at $150 billion. Given these figures, what could a powerful AI network like Bittensor be worth?

Miyachi, the BitMind CEO running a deepfake detection subnet, expresses confidence that Bittensor could eventually outvalue Bitcoin.

“The value generated by the Bittensor ecosystem may exceed that of Bitcoin in the long run,” he stated.

Ultimately, this will depend on how society perceives centralized AI systems and whether these concerns grow. Bitcoin has experienced substantial rallies during economic instability and failures of centralization, such as global pandemics, bank crises, and currency devaluations.

It’s possible that influencers will soon shift to saying, “long Bittensor, short centralized AI.” However, the future is unpredictable, and sometimes it can be even more surprising than AI could forecast.