Bittensor is an open-source, decentralized platform considered a frontrunner in the intersection between AI and blockchain technologies. It aims to revolutionize the development and sharing of machine learning models by leveraging blockchain technology, offering a transparent and open market for AI and digital commodities like compute and storage.
At the heart of this innovative ecosystem lies the TAO token, which fuels transactions and incentivizes participation. To engage with Bittensor, understanding its wallet system is crucial. This blog post delves into the intricacies of the Bittensor wallet, offering a comprehensive guide for crypto traders looking to navigate this exciting space.
What is a Bittensor Wallet?
Bittensor is an open source platform where participants produce best-in-class digital commodities, including compute power, storage space, AI inference and training, protein folding, financial markets prediction, and many more.
Bittensor is composed of distinct subnets. Each subnet is an independent community of miners (who produce the commodity), and validators (who evaluate the miners' work).
The Bittensor network constantly emits liquidity, in the form of its token, TAO (τ), to participants in proportion to the value of their contributions. Participants include:
- Miners—Work to produce digital commodities.
- Validators—Evaluate the quality of miners' work.
- Subnet Creators—Manage the incentive mechanisms that specify the work miners and validate must perform and evaluate, respectively.
- Stakers—TAO holders can support specific validators by staking TAO to them.
Key Features of a Bittensor Wallet
- Non-Custodial: Bittensor wallets are non-custodial, meaning you have complete control over your private keys and, therefore, your TAO tokens.
- TAO Transactions: Send and receive TAO tokens.
- Web3 Identity Provider: Use your Bittensor Wallet as an identity provider for web3 apps.
Understanding the Bittensor Ecosystem
Bittensor's vision is to create a market for artificial intelligence that is fair, transparent, and accessible to everyone, similar to how Bitcoin opened up a new paradigm for money. The Bittensor network resembles a global digital computer, allowing developers to build permissionless applications that would otherwise be impossible due to capital, access, or other constraints.
This global computer comprises multiple parts that work in tandem to deliver users the desired outcomes via applications, whether it's 3D render work, storage, AI inference, or any other task.
Here are key components of the Bittensor ecosystem:
- Subnets: A core characteristic of Bittensor is its incentive-based competition mechanism, which takes the form of subnets. Each subnet hosts its own rules and parameters within a self-contained codebase, along with distinct miners and validators, enabling a broad design space for developers. As of July 2024, the network has an average of 4 new subnets added weekly.
- Subtensor: The subtensor is the heart of the network. It is a decentralized blockchain that records the critical activity of all the subnets and determines the reward distribution for subnet miners and validators.
- Bittensor API: The Bittensor API is the glue connecting all the essential elements, providing much-needed communication between the subnets, nodes, wallets, and the blockchain.
TAO Token and How to Buy It
TAO functions as the primary financial tool for network participants, facilitating governance, staking, and payment for AI services and applications within the network.
TAO's tokenomics design mimics Bitcoin's, with a total supply of 21 million coins gradually released through mining and staking rewards. Bittensor also employs a halving principle where TAO emissions are reduced by 50% roughly every four years.
TAO can be purchased through both centralized and decentralized exchanges:
- Centralized Exchanges (CEX): Binance, Kucoin, Bitget, Kraken, Gate.io, MEXC, and Crypto.com.
- Decentralized Exchanges (DEX): wTAO is available on Uniswap. You can swap your ETH for wTAO.
Types of Bittensor Wallets
A Bittensor wallet manages the cryptographic key-pairs needed to prove identity, sign transactions, and access TAO. A wallet consists of a coldkey and a hotkey, used for different operations.
Coldkey
- This type of wallet controls funds, transfers TAO, delegates stake, and creates subnets
- It's primarily for secure TAO storage and high-risk transactions and is always encrypted
- It's like a secure key to a safe and an existential deposit of 500 RAO is required, otherwise the account will be deactivated and the remaining TAO will be destroyed
Hotkey
- Paired with a coldkey (with a coldkey having multiple hotkeys), used for regular operational tasks like signing transactions and running miners/validators
- It's less secure than a coldkey and can be encrypted
- You cannot use the same hotkey for two UIDs in a given subnet
Setting Up a Bittensor Wallet
Creating a Bittensor wallet is a straightforward process. Here's a step-by-step guide using the web wallet as an example:
- Go to the Bittensor Wallet
- Initiate a wallet creation by clicking on “create” to get started.
- Once you have created your wallet — generate your Mnemonic.
- Carefully write down the seed phrase provided
- Confirm your seed phrase by re-entering it for verification
- Now create a strong password for accessing your wallet
Securing Your Bittensor Wallet
Security is paramount when dealing with cryptocurrencies. Here are some essential tips to secure your Bittensor wallet:
- Protect Your Seed Phrase: Your seed phrase is the key to your wallet. Store it offline in a secure location. Never share it with anyone.
- Use a Strong Password: Create a strong, unique password for your wallet and avoid using the same password for multiple accounts.
- Enable Two-Factor Authentication (2FA): If available, enable 2FA for an extra layer of security.
- Be Wary of Phishing: Be cautious of unsolicited messages or emails asking for your wallet information. Always verify the source and never click on suspicious links.
- Consider a Hardware Wallet: For maximum security, consider using a hardware wallet to store your TAO offline.
- Multi-Sig Account: Enhance wallet security by replacing it with a multi-sig account, requiring multiple cold-wallets to act as signatories for a single on-chain address.
Bittensor Tools: SDK and CLI
Bittensor provides tools to help developers, miners, and validators interact with the network.
- Bittensor SDK: A Python-based library that allows developers to interact programmatically with the Bittensor network.
- Bittensor CLI: The Bittensor command-line interface (`btcli`) provides a straightforward way to create, manage, and encrypt wallet keys, transfer and stake TAO, perform subnet management operations, and view wallet information and network status.
Proof of Intelligence Consensus Mechanism
Bittensor utilizes a unique "Proof of Intelligence" consensus mechanism. This system rewards contributors based on the measurable value of their machine-learning outputs, incentivizing high-quality contributions. Machines within Bittensor engage in dialogue, exchanging insights and learning from one another[4]. This approach mirrors Ethereum's strategy, which empowers developers to design decentralized applications on its platform.
Conclusion
To get started with decentralized AI on Bittensor, the first step is securing your TAO. A robust Bittensor wallet serves as your gateway, allowing you to participate as miners and validators across subnets to produce commodities. By taking security seriously—protecting your seed phrase and using hardware wallets—you can confidently explore the full potential of the Bittensor network.
To get started, knowing the basics of cryptocurrency and blockchain is essential. Since Bittensor and TAO are built on these principles, understanding wallets, transactions, and security will not only help you manage your TAO but also prepare you for deeper engagement in the ecosystem. Learning crypto is key to navigating Bittensor and TAO and understanding your role, whether as a miner, validator, subnet creator, or TAO staker.
Ready to dive in? Set up your Bittensor wallet, familiarize yourself with the tools (like the SDK and CLI), and explore the unique opportunities across subnets. The future of decentralized AI is here, and Bittensor is leading the way. Are you ready to be part of the movement?
Frequently Asked Questions
- Are Bittensor wallets free?
Yes, downloading and installing Trust Wallet is free. However, transactions such as buying or transferring Bittensor may incur network fees.
- What is the risk of losing my recovery phrase?
Losing your recovery phrase for a crypto wallet can have severe consequences12.
Here's a breakdown of the risks:
- Permanent Loss of Access: Without your recovery phrase, you will be permanently locked out of your wallet and lose access to all the crypto assets stored within it.
- Irreversible Loss: Cryptocurrency transactions are irreversible. If you lose your recovery phrase, there is no way to recover your wallet, no matter what happens to your device.
- Theft: Anyone who gains access to your recovery phrase can easily clone your private keys onto a new device and spend your funds.
- What is a Coldkey and what is it used for?
A coldkey is for secure storage of TAO and high-security operations like transferring TAO and creating subnets. It is always encrypted. Think of it as a secure key to a safe
