Investing in altcoins is, unfortunately, often a lot like buying lottery tickets. Most turn out to be worth zero. But on occasion, it’s possible to find a winner that just hasn’t been widely recognized yet.
Bittensor (CRYPTO: TAO) could fit that profile. Its network is a marketplace for all kinds of artificial intelligence (AI) work. Could buying it make you rich if the crypto sector as a whole scales up and goes more mainstream?
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Today, investors have a few ways to bet on AI, including large-cap publicly traded artificial intelligence stocks, semiconductor or data center stocks (as pick-and-shovel plays), and tokens tied to AI-related protocols. Bittensor is in the third bucket.
As of this writing, the network has around 130 specialized subnetworks or subnets. Each one is an independent provider of a certain flavor of AI-related work, though in theory, tasks from other domains could be offered as well. For example, one of the most successful subnets, Chutes, is a service that enables users to rent compute for the purpose of running open-source AI models.
The general idea is that anyone who wants to run a subnet, participate as a miner or validator, or buy a subnet’s services needs to hold TAO, Bittensor’s native token and the asset that constitutes the investment we’re discussing. Holding TAO means getting exposure to the growth of its ecosystem, as effectively the level of activity on its network determines the demand for the token as well as the pace at which it’s burned to tighten supply.
On that note, the chain’s supply policies are tight by design. There can only ever be 21 million TAO, and the network experiences halvings every few years that reduce the reward that miners are given by half.
For most long-term investors, TAO belongs at the speculative edge of a well-balanced crypto portfolio. While some of its subnets are very interesting, none have proven profitable to the point that they’re likely to be self-sustaining over the long run. The same caution applies doubly to individual subnet alpha tokens. These trade as leveraged bets on TAO, multiplying the cryptocurrency’s gains and losses, and are often enormously volatile.
With that said, there are likely going to be a lot more winners in the AI segment of crypto, and Bittensor is currently positioned to be one of them, thanks to being a marketplace for services rather than a provider of services itself. Its market cap is $2.3 billion as of April 21, which means that if it succeeds in attracting subnets that are actually offering in-demand AI services, the price of TAO could grow tenfold over the next 10 years, or perhaps much sooner than that.
