Barry Silbert is betting big on Bittensor. To him, it’s the next wave, a big paradigm shift just like Bitcoin, Ethereum and the gang. Having weathered the stormy seas of the crypto winter and now the genesis crisis, he is due a new beginning. You cannot fault the man for going after a new horizon! Are you really ready to queue up and nap on what he’s peddling? Could Bittensor be the first revolutionary reinvention of the internet? Or are we simply witnessing yet another crypto bubble being blown up, puffed up by the same hot wind that has already popped so many?
Fair Launch, Real Value?
Bittensor features a “fair launch,” in the Bitcoin model. No pre-mined windfalls for venture capitalists, no secret deals. A welcome departure from a field typically fraught with pay-to-play and favoritism. Fairness doesn't guarantee value. Keep in mind, a fair launch is only defined as everyone having an equal opportunity to lose their shirt.
The central premise – incentivizing collective smarts through crypto tokens to tackle the world’s most pressing problems – is as powerful as it is sexy. A smart, decentralized, sovereign, intelligent World Wide Web, expandable with decentralized AI technologies? Is not the futuristic vision piece a little far-fetched, you might ask? The idea of subnets — which would let anyone deploy their own versions of problem-solving initiatives — injects a spirit of open innovation and collaboration.
Let's not get carried away. That subnets have emerged as a cottage industry to forecast Bitcoin prices and sports outcomes isn’t exactly confidence-inducing either. It highlights a fundamental challenge: how do you ensure the quality and utility of the intelligence being incentivized? Are we really trying to address the world’s grandest challenges, or merely building a decentralized prediction market for paper airplane contests?
Bitcoin 2.0 or Altcoin Overload?
Silbert proposes that Bittensor could eclipse Bitcoin in its quest to be the world’s store of value. It can establish the best kind of incentivized network for tackling issues around the globe. It's a bold claim. Bitcoin’s primary value is derived from its decentralization and scarcity. It represents an unstoppable replacement to traditional currencies, fiat money issued and regulated by national central banks. Bittensor, in direct contrast, seeks to reward a decentralized network of AI models and data providers.
These are fundamentally different goals. Bitcoin's simplicity is its strength. Bittensor's complexity could be its downfall. This is a classic fallacy of design — adding layers of complexity and additional economic incentives doesn’t necessarily add up to better value. In reality, it opens up additional attack vectors and points of failure.
Think about it this way: Bitcoin is like gold – a relatively simple, scarce asset with intrinsic properties. For all intents and purposes, Bittensor operates as a convoluted financial derivative. Its value will be determined by the success of the underlying subnets and the wider ecosystem. While derivatives can provide access to leverage and increased return potential, this access comes with much higher risk.
The Grayscale Gambit: Déjà Vu?
Grayscale’s recent announcement of a new Bittensor Trust has people scratching their heads. They view it as a promising opportunity to repeat their Bitcoin success. That should make you nervous. Grayscale’s Bitcoin Trust (GBTC) was a genius play. It provided institutional investors with exposure to Bitcoin, albeit before a legitimate ETF hit the market. Initially, GBTC traded at a large premium to the underlying Bitcoin. Later, though, it converted to a discount, leading to arbitrage opportunities and market distortions.
Are we on the verge of seeing a repeat of that history? Our verdict on whether the Grayscale Bittensor Trust will fuel a speculator’s bubble. Is this mania going to lose all connection to the true performance and usefulness of the Bittensor infrastructure? The success of a Grayscale Trust does not mean that the underlying asset will be successful. That doesn’t say anything except that Grayscale is good at marketing and providing access.
What if Bittensor doesn’t fulfill its promise of being the “intelligent World Wide Web” that Silbert sees in his crystal ball? What if it ends up being more like the first option, a niche project that mainly excites crypto enthusiasts and AI researchers? With it, the price of TAO, and the value of the Grayscale Trust, could crash, leaving unwitting investors in the lurch.
Remember Pets.com? During the great dot-com boom, it was the go-to place to buy pet supplies on the Internet. They had a Super Bowl ad! They were going to save the pet industry! And then... poof. Gone. The lesson? A cool slogan and a huge marketing budget doesn’t equal long-term success.
Bittensor could be the future. This approach would be both transformative for AI and create new heights of global cooperation. It just as easily could be another flash in the pan, a victim of its own hype and complexity. Approach with caution. Do your own research. Remember the words of Warren Buffett: "Be fearful when others are greedy, and greedy when others are fearful." Today, there’s a severe case of greed percolating in and around Bittensor. Perhaps now is the time to take a proper scare.
