Internet-First Shift May Favor Cryptocurrencies Like Bitcoin as Blockchain and AI Reshape the Economy

• Internet-first economy accelerates digital commerce and governance.

• Network states and cryptocurrencies enable new forms of community, money, and accountability.

• Regulatory shifts and oracle adoption (Pyth Network, Chainlink) are integrating onchain data with traditional institutions.

Internet-first economy: how blockchain, AI and internet-native money reshape markets and governance—read COINOTAG’s concise analysis and next-step insights.

Blockchain, artificial intelligence, and online platforms are the future of commerce as the world moves to an internet-first economy.

The traditional economy is being phased out in advanced countries that are transitioning to an internet-first economy dominated by the tech industry and digital platforms, according to Balaji Srinivasan, a former executive at Coinbase and the author of “The Network State.”

“The legacy economy is being sunset in favor of the Internet economy,” Srinivasan said in an X post on Saturday.

He shared a chart showing the price divergence between the “Magnificent Seven” tech stocks, which are enjoying meteoric growth, and the remainder of companies in the S&P 500 index, which have remained fairly flat since 2005.

Magnificent Seven tech stock performance versus the remaining 493 companies in the S&P 500 index. Source: Balaji Srinivasan

The S&P 500 is a weighted stock market benchmark of the 500 biggest listed U.S. companies. Srinivasan argued the move online since the 2008 financial crisis sets the stage for internet-native economies, communities, cities, and presidencies.

The Magnificent Seven includes Apple, Microsoft, Amazon, Alphabet (Google), Meta Platforms, Nvidia and Tesla, companies that highlight the accelerating gap between internet-first firms and legacy businesses.

Technology and internet stocks dominate the US stock market. Source: TradingView

What is a network state and how does it relate to the internet-first economy?

A network state is a digitally native community that coordinates governance, finance and identity online, often using blockchain and cryptocurrencies. It functions as a building block of the internet-first economy by creating aligned incentives and internet-native money for transnational coordination.

How will blockchain and AI disrupt legacy systems?

Blockchain provides verifiable, programmable money and immutable records. AI automates decisioning and personalization. Together they lower coordination costs and enable 24/7 markets, faster settlement and new transparency for public budgets.

Regulatory agencies such as the SEC and CFTC are publicly exploring infrastructure changes to align legacy markets with round-the-clock digital trading models. Oracle technologies — Pyth Network and Chainlink — are being used to publish government economic data onchain for transparency.

Why does this matter to investors and policymakers?

Front-loading financial infrastructure with blockchain and AI reduces settlement friction and increases transparency. For investors, internet-first firms often show asymmetric growth versus legacy firms, as observed in the concentration of returns among the Magnificent Seven.

For policymakers, integrating onchain oracles and exploring 24/7 market frameworks are steps to preserve market integrity while fostering innovation.

Frequently Asked Questions

How does internet-native money differ from traditional currency?

Internet-native money is programmable, borderless, and settled on distributed ledgers. It enables instant, verifiable transfers and composable financial applications that traditional fiat systems cannot natively provide.

When will network states become viable?

Network states require mature identity systems, stable internet-native money and legal recognition. Adoption will be incremental—starting with communities, DAOs and composable governance models—before any formal recognition at scale.

Key Takeaways

• Internet-first economy: Digital platforms, blockchain and AI are shifting commerce and governance online.
• Network states: Digital communities use internet-native money and onchain governance to coordinate at scale.
• Policy and infrastructure: SEC/CFTC discussions and oracle adoption (Pyth Network, Chainlink) signal institutional integration of onchain data.

Conclusion

The internet-first economy is accelerating as blockchain and AI enable new economic coordination, with network states and internet-native money central to that transition. COINOTAG will continue tracking regulatory integration, oracle deployments and market concentration trends to help readers anticipate the next steps.