The promise of a decentralized internet (Web3) built on data sovereignty has not materialized. The fundamental reason is that the general population does not value privacy and data ownership enough to abandon convenient, centralized Web2 services, thus preventing Web3 from reaching critical mass.

The most successful AI applications like ChatGPT are built ground-up. Incumbents trying to retrofit AI into existing products (e.g., Alexa Plus) are handicapped by their legacy architecture and success, a classic innovator's dilemma. True disruption requires a native approach.

The next evolution of the internet, "Web 4.0," moves beyond human-centric design to serve AI as the primary user. This requires new protocols that give AI agents write access and their own wallets, allowing them to permissionlessly pay for compute, deploy apps, and participate in an economy without human intervention.

The internet was designed for human interaction, actively discouraging bots. The next evolution will reverse this, with AI agents becoming the primary users. This requires re-architecting everything from user interfaces to business models, with crypto likely serving as the native payment rail for these autonomous agents.

Instead of a single, generalizable AI, we are creating 'Functional AGI'—a collection of specialized AIs layered together. This system will feel like AGI to users but lacks true cross-domain reasoning, as progress in one area (like coding) doesn't translate to others (like history).

The idea of a truly "open web" was a brief historical moment. Powerful, proprietary "organizing layers" like search engines and app stores inevitably emerge to centralize ecosystems and capture value. Today's AI chatbots are simply the newest form of these organizing layers.

As AI capabilities accelerate toward an "oracle that trends to a god," its actions will have serious consequences. A blockchain-based trust layer can provide verifiable, unchangeable records of AI interactions, establishing guardrails and a clear line of fault when things go wrong.

Unlike Web3, which required building an entirely new ecosystem, AI's power lies in its seamless integration into existing workflows. Because there's no friction to adoption and the cost of creation is dropping to zero, its societal impact will be faster and more widespread than previous technological shifts.

AI systems often collapse because they are built on the flawed assumption that humans are logical and society is static. Real-world failures, from Soviet economic planning to modern systems, stem from an inability to model human behavior, data manipulation, and unexpected events.