From Zombie Tech to Intelligence: Why Web3 Failed and AI Thrives

Is Web3 the Walking Dead of Tech?

walking dead

Introduction

Despite numerous articles, YouTube videos, and tweets declaring Web 3.0 dead, I have a different perspective. Web 3.0 isn't dead, but it's not truly alive either - it's more accurately described as a zombie, shambling forward without clear purpose, much like the characters in 'The Walking Dead.' This zombie state persists for two main reasons. First, there's the sunk cost factor. Venture capitalists have poured billions of dollars into hundreds of crypto and Web 3.0 projects. They're now trapped in a position where they can't easily accept their losses. This creates an artificial incentive to keep the ecosystem appearing alive. Second, Chris Dixon mentioned in his recent book, Read Write Own, that the Web3 ecosystem is made up up of two groups: the casino culture and the computer culture. The casino culture is focused on trading and speculation. Whereas, the computer culture is oriented toward long-term development. The casino group is predominantly engaged in speculation, scams, and get-rich-quick schemes rather than innovation. Dixon believes the computer culture represents a more sustainable future for the Web3. Personally, I'm skeptical of its fundamental premise. The idea of building a successful civilization without central authority ignores basic human nature. The concept of decentralization was revolutionary, but its second-order effects - rampant speculation and scams - reveal its fundamental flaws. In fact, these issues aren't bugs in blockchain technology; they're features. The absence of central authority and regulatory oversight creates an environment where human nature gravitates toward the path of least resistance for profit. The stability and progress we see in traditional systems exist precisely because of, not despite, central authorities and well-structured laws.

Reasons to not Build a Web3 Company

1. Decentralization is a fool's errand - The Internet began as a decentralized network - a revolutionary system designed to survive even nuclear attacks through distributed architecture. It has gradually gravitated toward centralization. This shift wasn't merely coincidental; centralization won because it offered compelling advantages that users and businesses found indispensable. There are key factors that drove the adoption: Insurance and Security, user experience, free and freemium business models. For Insurance and Security; centralized platforms offer user protection against fraud, they provide dispute resolution mechanisms, they can be held accountable and liable, and users have recourse when things go wrong. For Blockchain related services, it is not so. There is even a slang for it called "Not Your Keys, Not Your Crypto”. This means that not owning the keys to your Bitcoin wallets means not truly owning the BTC. How many users want to adopt that mentality? The mantra "Not Your Keys, Not Your Crypto" perfectly illustrates why decentralization might never gain mainstream adoption. It places too much responsibility on individual users while offering fewer protections than centralized alternatives. Decentralization may appeal to tech-savvy enthusiasts and privacy advocates, but history shows that most users prefer to trade some autonomy for convenience, security, and recourse. The Internet's evolution from a decentralized network to increasingly centralized services wasn't a betrayal of its original vision, but rather a natural response to human nature and practical needs. The average user simply wants reliable services that work well and offer protection when things go wrong.

2. Ownership is not a compelling reason - The blockchain community's fixation on 'digital ownership' reveals a fundamental misunderstanding of both existing technologies and modern consumer preferences. The truth is, meaningful digital ownership already exists without blockchain - you can own domain names, host your own websites, and maintain direct communication with your audience through email lists. The much-touted idea of portable social media followers, exemplified by Threads.net and Mastodon using the ActivityPub protocol, proves that decentralized systems can work effectively without blockchain technology. In fact, if cross-platform portability became a priority, it could be mandated through government regulation (I see you EU) rather than requiring a new technological infrastructure. Furthermore, there's a deeper irony: the blockchain advocates like Chris Dixon push for increased digital ownership, but the most successful digital platforms of our era have moved in the opposite direction. AWS dominates by renting servers rather than selling them. Spotify makes money by giving access to music not ownership. Software companies have shifted from one-time purchases to subscription models. This shift away from ownership isn't accidental - it reflects how people actually prefer to consume digital services. Users consistently choose convenience, flexibility, and managed services over the burden of ownership. I am a Software Engineer and I prefer managed cloud services even if it costs me more. The blockchain's emphasis on digital ownership isn't just solving a non-existent problem; it's actively pushing against the tide of modern consumer preferences. This explains why its adoption remains limited to speculation and regions with failed financial systems or extremely corrupt nations. In a world where access is more important than ownership, blockchain's core value proposition becomes increasingly irrelevant.

3. People only care about the use cases - The fundamental difference between AI and blockchain adoption lies in their basic value propositions. AI passed the 'sniff test' - its utility is obvious and immediately applicable to everyday situations. From processing language, recognizing images, or automating tasks, people can quickly grasp how AI makes their lives better or their work more efficient. This is not the same for blockchain. Blockchain advocates often need to resort to extreme scenarios to justify the technology's existence. They paint dystopian futures: societal collapse, global financial meltdown, or authoritarian control over traditional banking systems. The pitch essentially becomes: 'You'll need blockchain when everything falls apart.' This is a ridiculous value proposition because it requires users to accept or hope for a darker future to validate the technology's usefulness. I don't want that world. So far, blockchain adoption is high in nations with severely dysfunctional governments and financial systems. In these contexts, where traditional institutions have failed catastrophically, blockchain offers an alternative system for value storage and transfer. However, this isn't so much a testament to blockchain's inherent utility as it is an indictment of failed governance. It's telling that blockchain's primary use case emerges not from its superior technology, but from the complete breakdown of conventional systems. Blockchain's most compelling use cases require either a hypothetical apocalypse or real-world governmental failure. I find it frustrating when tech entrepreneurs and venture capitalists use Nigeria and Venezuela as examples of societies that have embraced blockchain technology. As a Nigerian living in Nigeria, I have firsthand experience with why people actually use blockchain technology. The primary reasons for blockchain adoption in Nigeria are rooted in our social dynamics. First, there's a prevalent 'get-rich-quick' mentality in our society, with little patience for long-term wealth building. This cultural context makes blockchain technology particularly appealing as a potential path to quick wealth. Second, the regulatory environment in Nigeria is inconsistent and the government is extremely corrupt. The lack of an inclusive financial system has created gaps that blockchain technology can fill. This was particularly evident between 2020 and 2023, when numerous blockchain startups thrived because they focused on the facilitation of dollar transfers. However, with recent regulatory stabilization, many of these blockchain startups are now struggling to survive - an example of the walking dead. This highlights how the initial adoption was more about circumventing systemic issues rather than genuine technological innovation. Instead of being a solution that enhances a functioning society, it positions itself as a fallback for when systems collapse.

4. The evolution of different technologies tells us a story about innovation and human adoption. Consider Artificial Intelligence, which has existed as a concept since the 1940s. Despite its long history, AI remained a simple concept to understand - machines that can think and learn. For decades, it was technically impossible to achieve. It only became viable when computing power, data availability, and algorithmic sophistication reached sufficient levels. Similarly, space exploration, particularly the concept of traveling to Mars, is an easy to understand goal. Anyone understands the basic idea of humans traveling to another planet. It is technically challenging, but the concept is straightforward. In both AI and Mars exploration, you can see clear objectives, defined use cases, and compelling incentives which drive the continued investment and development. This is not the same with the Blockchain technology. Unlike AI or space travel, blockchain is difficult to explain to average users. While the technical implementation exists, it struggles to find meaningful applications. The technology suffers from being a solution in search of a problem. Its complexity wouldn't be such a barrier if it offered clear benefits - after all, people happily use smartphones without understanding their internal workings. The real issue lies in the unanswered questions: What compelling problem does blockchain solve for average users? What incentives drive sustainable, non-speculative adoption? How does it align with natural human behavior and social structures? Until these questions find convincing answers, blockchain risks remaining a technically impressive but practically limited technology

5. The love of money is the root of all evil - There's a revealing pattern in how different technologies attract different types of dominant players, which offers important insights about these technologies' fundamental nature. In the cryptocurrency space, criminal enterprises are the most active and innovative users - from ransomware attacks to money laundering operations. The pattern becomes even clearer when we look at the graveyard of failed crypto projects and their criminally-charged founders. FTX and Sam Bankman-Fried: Once valued at $32 billion, collapsed in 2022, with SBF found guilty of fraud and money laundering. Celsius Network and Alex Mashinsky: The crypto lending platform froze billions in customer assets before bankruptcy. Mashinsky was arrested for fraud, manipulating token prices, and enriching himself with customer funds. Three Arrows Capital (3AC) and founders Su Zhu and Kyle Davies: The hedge fund's $3 billion collapse led to bankruptcy and criminal investigations. Zhu was eventually arrested in Singapore. BitMEX and Arthur Hayes: The crypto exchange paid $100 million in fines, with Hayes pleading guilty to violating banking laws and receiving house arrest. Terraform Labs and Do Kwon: The $40 billion collapse of Luna and UST led to Kwon's arrest in Montenegro, facing fraud charges across multiple jurisdictions. QuadrigaCX and Gerald Cotten: The exchange's mysterious collapse, with its founder allegedly dead, left $190 million in customer funds missing. This pattern stands in contrast to other technological domains. Despite early assumptions about adult content dominating the web, the largest internet companies today are mainstream technology giants like Google, Amazon, and Meta. These companies provide everyday services used by billions of people. Similarly in AI, the leading players are established technology companies and legitimate startups focused on solving real problems. The fact that cryptocurrency's most sophisticated users (founders of the biggest crypto companies) tend to be bad actors serves as an important signal about the technology's inherent characteristics and likely long-term societal impact. The crypto space hasn't just seen occasional failures - it's seen systematic fraud at the highest levels of its biggest companies, suggesting these aren't bugs but features of the technology's fundamental nature.

Is Technology Neutral?

The founding purpose of a technology acts as a powerful gravitational force that shapes its entire evolutionary trajectory. People often claim that 'technology is neutral,' but the reality shows that a technology's original intent and the problems it was meant to solve influence the type of people that are attracted to develop it further and how it's ultimately used. Consider the following examples: The Internet was conceived as a tool for open communication and information sharing among researchers. It has evolved into platforms and tools that continue to democratize knowledge and connection. AI was developed to augment human intelligence and solve complex problems. It has maintained its course of addressing real-world challenges - from healthcare to climate science. Compare with Bitcoin and blockchain technology. It was a response to the 2008 financial crisis with an anti-establishment ideology. It attracted individuals focused on system circumvention, speculation, and alternative financial structures. This pattern reveals how a technology's 'DNA' - its founding purpose and principles - creates a subtle but powerful filtering effect. It draws in developers and users who align with its original mission and at the same time deter those with different objectives. The 'why' behind a technology's creation is more influential than the 'what' or 'how'. It determines its societal impact and evolution. The founding purpose sets the tone for the community that forms around it. And in turn decides the problems they choose to solve and the technology's role in society.

Why You Should Build an AI Company Now

1. Timing - This is the best time to start a company. Compared with previous tech waves where the technology needed years to mature, AI is already delivering tangible results. You are at a sweet spot where the technology is good enough and at the same time early enough that many valuable applications remain undiscovered. It's similar to the mobile app boom of 2008-2012 - the infrastructure exists, but there was still plenty of room for innovation and market leadership.

2. Instant Value Proposition - AI companies provide immediate value. When a customer uses an AI product, they don't need elaborate explanations about future possibilities - they can see the efficiency gains, cost savings, or improved capabilities right away. This immediate feedback loop makes customer acquisition and retention much more straightforward. You're not selling a vision; you're selling actual results.

3. This is a unique period where startups have access to the same powerful AI models as tech giants. Through APIs, open-source models, and cloud infrastructure, a small team can build sophisticated AI applications without massive capital investment. This democratization of access means that success depends more on identifying and solving specific problems well than on having proprietary technology.

4. Companies and individuals already understand the potential of AI. You don't need to convince them that AI is valuable - they're actively looking for solutions. The market has moved past the 'why AI?' phase and into the 'which AI solution?' phase. This dramatically reduces the education burden on startups and shortens sales cycles.

5. AI solutions can be sold globally from day one. Chatgpt reached 100 million users in about 2 months. A well-executed AI product can serve customers worldwide without significant localization needs. This is particularly relevant for entrepreneurs in developing markets - you can build in Lagos or Nairobi but sell to the US, UK, and other high-value markets immediately.

6. The most successful AI companies now aren't trying to boil the ocean - they're focusing on solving specific problems really well. Whether it's improving sales emails, automating customer service, or optimizing supply chains, success comes from deeply understanding a particular use case and building an AI solution that addresses it better than existing alternatives.

7. Lower Capital Requirement - It is cheaper to start an AI company. Unlike hardware or infrastructure startups, AI companies can start lean and scale efficiently. Cloud computing, API access to models, and modern development tools mean you can build and test products with minimal upfront investment. This lower capital requirement means you can iterate faster and find product-market fit without burning through massive funding.

8. AI companies have clear paths to monetization. Whether through SaaS subscriptions, usage-based pricing, or enterprise licenses, customers understand and are willing to pay for value received. This is refreshingly different from many blockchain projects that relied on token economics or speculative value.

Conclusion

The time is now.