An Internet-first economy is a shift from legacy, location-bound systems to digital-native commerce and governance powered by blockchain, AI, and online platforms; it relies on crypto-native money, distributed communities, and onchain transparency to enable 24/7 markets and new forms of economic organization.
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Internet-first economy accelerates digital commerce with blockchain and AI.
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Network states and online communities require crypto-native money and onchain infrastructure.
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Data: technology stocks (the “Magnificent Seven”) have outpaced the broader S&P 500 since 2005, highlighting the market shift.
Internet-first economy: Learn how blockchain, AI, and crypto reshape markets and governance — read the latest analysis and expert quotes from Balaji Srinivasan. Stay informed.
Blockchain, artificial intelligence, and online platforms are the driving forces of an Internet-first economy that is reshaping commerce, finance, and governance.
The traditional economy is being phased out in advanced countries transitioning to an Internet-first economy dominated by technology platforms and digital money, according to Balaji Srinivasan, former Coinbase executive and author of “The Network State.”
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“The legacy economy is being sunset in favor of the Internet economy,” Srinivasan wrote in an X post, sharing a chart that shows the price divergence of the “Magnificent Seven” tech stocks versus the remaining S&P 500 constituents.
Magnificent Seven tech stock performance versus the remaining 493 companies in the S&P 500 index. Source: Balaji Srinivasan
What is an Internet-first economy and how does it differ from the legacy economy?
An Internet-first economy is a digital-native economic system where production, transactions, governance, and identity are primarily online. It differs from the legacy economy by operating 24/7, using blockchain-based money and smart contracts, and leaning on AI and platforms for coordination and trust.
How do the Magnificent Seven illustrate the Internet-first shift?
The Magnificent Seven — Apple, Microsoft, Amazon, Alphabet (Google), Meta Platforms, Nvidia, and Tesla — show market concentration in internet and technology businesses. Their sustained outperformance versus the broader S&P 500 demonstrates investor preference for platform-driven, scalable models that benefit from network effects.
The divergence since 2005 highlights how digital-native companies capture more revenue per user and scale faster than traditional firms, reinforcing the Internet-first narrative.
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Network states are distributed online communities that may organize economic activity and governance digitally. Crypto-native money provides programmable, borderless payments and onchain accountability that these communities need for trade, membership, and public finance.
Balaji Srinivasan argues that network states require internet-native currencies to function at scale. This enables transparent budgets, automated enforcement, and faster global settlement than legacy banking rails.
Regulators are increasingly adapting. The U.S. SEC and CFTC issued a joint statement exploring 24/7 capital markets to align legacy processes with round-the-clock crypto trading. Agencies are also experimenting with publishing official data onchain via oracle providers such as Pyth Network and Chainlink (mentioned as text-only sources here) to improve transparency.
These moves indicate a cautious but tangible shift toward integrating blockchain and AI into public markets and economic reporting.
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