From Bitcoin to Bittensor: Decentralized AI & the Future of Intelligence (w/ Frank Schuil)

In this episode, we sit down with Frank, co-founder of Safello, the leading crypto exchange in the Nordics, to explore their bold decision to convert their entire Bitcoin and Ethereum treasury into Tao, the native token of Bittensor.

Frank walks us through Safello’s 11-year journey since 2013, from surviving the Mt. Gox collapse to becoming a publicly listed company on Nasdaq First North. We dive deep into why they made the strategic shift from traditional crypto assets to Bittensor, and what makes this decentralized AI protocol so compelling.

We unpack the mechanics of Bittensor: how it creates a decentralized incentive mechanism for AI development through 128 specialized subnets, each solving different problems from text generation to climate modeling. Frank explains the complex dynamics between miners, validators, and the newly introduced alpha tokens, and why he believes this represents a "black swan event" in AI that most reports are ignoring.

We also explore the value flow between Tao and subnet alpha tokens, the challenges of the new tokenomics introduced in February, and why Frank sees Tao as a credible balance sheet asset for companies seeking exposure to decentralized AI. The conversation touches on regulatory compliance under Europe's MiCA framework and Frank's broader reflections on crypto's evolution from its early ideals to today's reality.

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Guest Links / Additional Material:
https://safello.com/labs
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Timestamps:
00:00:00 - Introduction and technical difficulties
00:01:03 - Frank's background and Safello's founding story
00:02:24 - Safello's journey from 2013, surviving Mt. Gox, regulatory compliance
00:03:42 - Strategic shift from Bitcoin/Ethereum to Tao treasury
00:08:52 - What is Bittensor and what problem does it solve?
00:09:22 - Decentralized AI as alternative to centralized players like OpenAI
00:11:55 - Comparing decentralized vs centralized AI compute efficiency
00:13:15 - Token usage metrics - AI tokens vs crypto tokens
00:14:40 - How Bittensor works: subnets, miners, and validators explained
00:18:48 - Specialized mining across 128 different subnets
00:19:46 - Game theory and incentive mechanisms in Bittensor
00:21:18 - How subnet rewards are determined and alpha token dynamics
00:26:05 - Domain squatting problem and subnet limitations
00:29:17 - Value accrual between alpha tokens and Tao
00:32:39 - Utility and purpose of alpha tokens
00:35:22 - Competition between subnets for Tao emissions
00:37:24 - Bittensor's market cap approaching Polkadot
00:40:00 - Tao as credible balance sheet asset for AI exposure
00:43:14 - No pre-mine structure and organic protocol development
00:45:42 - Current subnet landscape and investment opportunities
00:46:40 - MiCA compliance challenges and regulatory landscape
00:50:28 - Reflections on crypto's evolution and regulatory gatekeeping
00:52:13 - Closing thoughts

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