TAO
The native cryptocurrency of Bittensor.
What is TAO?
TAO is a utility token that rewards participants in the Bittensor network. This includes miners , validators , and subnet owners . Miners provide essential computational resources for AI tasks. Validators ensure that consensus rules are followed. This helps maintain the network's integrity.
WHAT IS A RAO?
RAO is a denomination of TAO, representing one billionth (10^-9) of a TAO.
Functions of TAO
TAO tokens serve several important purposes within the Bittensor ecosystem:
- Incentivization: TAO encourages users to contribute valuable resources. These resources include computing power and data. Participants earn TAO tokens as compensation for their contributions. This motivates more individuals to join the network.
- Staking : Users can stake their TAO tokens to participate in the consensus mechanism. Staking acts as collateral. It ensures that validators prioritize the network's well-being. This process also enhances security against malicious actors.
- Transaction Fees: Transactions within the Bittensor network require payment in TAO tokens.
TESTNET TOKEN: TEST TAO
In addition to regular TAO, there is also Test TAO available for testing purposes on the testnet. Test TAO can be requested on the official discord (in Requests for Testnet TAO channel), but is not compatible with other environments like mainnet.
Comparison to Bitcoin
Bittensor shares key similarities with Bitcoin. However, its focus is on decentralized AI rather than currency:
| Purpose | Tokenomics | Consensus Mechanism | |
|---|---|---|---|
| Bitcoin | Decentralized Currency | Fixed Supply Halvings | Proof-Of-Work |
| Bittensor | Decentralized AI | Fixed Supply Halvings | Proof-Of-Intelligence |
Here are their main shared characteristics:
- Purpose: Bitcoin created a new way to handle money without banks. Similarly, Bittensor creates a new way to build AI without big tech companies. This lets people work together freely.
- Tokenomics: Both Bitcoin and Bittensor have a fixed supply cap of 21 million tokens. They use a similar halving schedule to control token distribution over time. Halvings occur approximately every four years, cutting the rewards in half each time.
- Consensus Mechanism: Bitcoin uses "Proof-of-Work", where miners compete to solve complex puzzles. Those secure the network. Each solved puzzle validates transactions and earns rewards. Bittensor takes a different approach with "Proof-of-Intelligence". Participants earn rewards by contributing useful AI models to the network solving tasks. Both systems create a fair way to reward people who help strengthen the network.
Economic Model
As already mentioned above the total supply of TAO is capped at 21 million tokens, created at a predictable rate. Each block generates 1 TAO, with approximately 7,200 blocks produced daily. Each block takes about 12 seconds to complete. The issuance rate undergoes halving approximately every four years. This continues until all tokens are in circulation. As demand for TAO increases, its value may rise due to its limited supply.
Value Proposition
The value of TAO is linked to contributions from miners and validators. As more users join the network and provide valuable AI services, demand for TAO increases. This supports its value within the ecosystem.