EP08: Exploring Bittensor Complexity Through Equity Token Evolution

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Sep 19, 2025

Dive into the fascinating world of Bittensor as the hosts unpack its complexity compared to Bitcoin and stablecoins. They explore how necessity drives creativity and discuss innovative AI and DeFi use cases like Ridges for code generation and Bit Minds for deepfakes. Discover Bittensor's leading position in AI and the evolution of equity through alpha tokens. The insights into investing in alpha rather than traditional equity offer a fresh perspective on valuating decentralized projects. Get ready for a thought-provoking discussion!

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INSIGHT

Unbuyable Federation

BitTensor is a federation of hundreds of thousands of TAO holders that no single company can buy.
This decentralization makes BitTensor structurally harder to capture than any single AI firm or corporation.

INSIGHT

Complexity Over Simplicity

BitTensor is more complex to explain than Bitcoin or stablecoins because it combines many roles and incentives.
Complexity makes concise explanations hard but reflects richer functionality.

INSIGHT

Money Evolution Continues

Crypto is an evolution of money from barter, gold, fiat to crypto, with stablecoins already moving $27T last year.
BitTensor extends that evolution into AI and DeFi use cases.

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In this episode, James and JJ tackle explaining Bittensor's complexity (vs. Bitcoin/stablecoins), its federation of 100K+ TAO holders unbeatable by companies, Bitcoin as inflation solution (not hedge), necessity/constraints driving creativity, US dollar privilege, AI/DeFi as crypto's biggest use cases (e.g., Ridges for code, Bit Minds for deepfakes, 404 Gen for 3D AI), Bittensor's $3B AI leadership vs. Hyperliquid's $12B (with Subnet 35 Kartha launching Hyperliquid on Bittensor), evolution of equity (alpha tokens as permissionless value creation), DCF vs. incentive analysis for valuations, subnets undervalued vs. 200-300 AI unicorns (most failing with negative margins), alpha for buying resources/companies (e.g., Ridges' 1/20th-1/30th compute cost via Shoots/Targon), and investing in alpha over equity.

Key Timestamps & Topics:

00:00:00 - Intro: Bittensor's unbeatable federation; Bitcoin as inflation solution; necessity/constraints/creativity.
00:01:00 - Explaining Bittensor: Complexity vs. Bitcoin/stablecoins; Satoshi's "convince you" quote.
00:02:00 - Money Evolution: Barter to crypto; $27T stablecoin transactions.
00:03:00 - Use Cases: Ridges (code gen), Bit Minds (deepfakes), 404 Gen (3D AI); AI/DeFi dominance.
00:04:00 - Community: Philosophical vs. trading; Satoshi's properties; Hyperliquid ($12B) vs. Bittensor ($3B AI lead).
00:05:00 - Subnet 35 Kartha: Hyperliquid on Bittensor; evolution of equity/alpha tokens.
00:10:00 - Alpha Value: Permissionless mining; buying resources/companies (e.g., Ridges' cheap compute).
00:15:00 - Valuations: DCF vs. incentive analysis; subnets undervalued vs. AI unicorns (200-300, most fail).
00:20:00 - Alpha Utility: Sustainable mechanisms; investing in alpha over equity.
00:55:00 - Wrap-Up: Short episode; teaser for subnets.

Key Takeaways:

Bittensor as 100K+ TAO holder federation unbeatable by companies (e.g., OpenAI/Anthropic); abstracts incentives for any problem, generalizing Bitcoin's proof-of-work.
AI/DeFi as crypto's top use cases: $27T stablecoin volume; subnets like Ridges/Bit Minds/404 Gen lead globally—philosophical community drives innovation.
Evolution of equity: Alpha tokens enable permissionless value (mine without vesting, buy resources at 1/20th-1/30th cost)—replaces flawed VC (subnets undervalued vs. 200-300 failing AI unicorns).
Valuations shift: DCF to incentive analysis; Bittensor's $3B AI lead (vs. Hyperliquid's $12B) undervalued—alpha for buying companies/resources, sustainable off-ramps needed.
Complexity challenge: Harder than Bitcoin; Bitcoin solves inflation, Bittensor solves equity/VC—optimistic on penetration, like 15-year Bitcoin mainstreaming.

Resources & Links:

Bittensor Official: bittensor.com
Taostats (Explorer/TAO App): taostats.io
xAI: x.ai
Follow Hosts: @jaltucher & @josephjacks_ on X

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