Scaling the Upside Down
The next internet is being built beneath the surface
It’s the beginning of 2026. Time to turn off those OOO replies, shed the eggnog, and post your 2026 Predictions. But while the surface of the web is spinning back up after the holidays, the rules of the game are being rewritten underneath.
Christian Catalini calls it the “Infrastructure Inversion.” The 'Upside Down' isn't a scary parallel dimension anymore. It’s just the basement where the new plumbing lives, and with it, new opportunities. What used to be a messy alternative reality is hardening into the invisible rails that run the real world.
Web3 is rebuilding a new internet and already inverting the old guard.
Convergence is brought to you by 321 Converge Inc. (“321”), a new 501c6 created by the founders of The Medici Network.
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Sparks ✨
Quick, curated Web2 and Web3 insights you need to know
#1 Whoever Controls Digital Wallets Will Control the Future
Author: Danielle Zanzalari (Assistant Professor of Economics at Seton Hall University, Former Financial Economist at the Federal Reserve Bank of Boston)
TLDR:
Digital wallets are evolving into far more than a place to store money. They’re becoming the interface layer that verifies identity and gates access to financial, social, and even government systems
When they take the form of tokens, they remove intermediaries and connect users directly to onchain platforms, so wallet designers gain outsized influence over who participates, what data is required, and which services are reachable
The policy fight is currently misplaced (token labels vs. infrastructure control). Different regions are already choosing radically different models (e.g., state-accessible systems vs. government-backed interoperability frameworks)
Our Takeaway:
Digital wallets are evolving into the primary interface for verifying identity and connecting users to financial and government systems. By eliminating intermediaries, they enable companies to offer embedded financial services that bypass legacy friction and own the customer relationship directly
If controlling wallets means controlling the future, that future inevitably involves AI agents acting as autonomous economic participants. These rails allow agents to execute tasks and settle micropayments without intermediaries, creating a machine-to-machine economy that legacy banking cannot support
Wallet designers now wield outsized influence over access and data, fundamentally reshaping the economics of Customer Acquisition Cost (CAC). Instead of paying rent to ad networks, apps can route value directly to users as programmable incentives, transforming them into active stakeholders
#2 Authority Is the AI Bottleneck
Author: Jamin Ball (Partner at Altimeter Capital)
TLDR:
Most enterprise AI is still assistive in that it just drafts, summarizes, flags, or suggests. A human still owns the decision and the result
Until an AI system is allowed to be authoritative (take action end-to-end), it can’t own outcomes or dramatically change cost structures. Assistive AI saves only time, whereas authoritative AI changes outcomes
Granting authority forces hard decisions. What’s the canonical source of truth, what’s an acceptable error rate, who’s accountable, and how you roll back when it’s wrong. Trust will build slowly (like cloud), but once it clicks, the floodgates open
Our Takeaway:
Trust is the bottleneck, and verifiable compute is the unlock. In Web2, trust is usually based on brand reputation. In Web3, we engineer trust through verifiable compute, cryptographic proofs that guarantee an AI model ran exactly the code it was supposed to, on the correct data, without hallucinating or being tampered with
EigenCloud enables the agentic web to operate trustlessly. Without its critical infrastructure leveraging Ethereum’s monetary asset (ETH), agents may become hard to account for
To move from assistive to authoritative AI, we need to know that if an agent executes a bad trade or deletes a database, it can be held accountable. Verifiable compute provides the audit trail and execution guarantees necessary to finally remove the human training wheels and let the software drive
#3 Affiliate Links, Personalized Ads, and Chatbot Revenue Optimization
Author: Eric Benjamin Seufert (Author of Mobile Dev Memo, Investor & Media Strategist)
TLDR:
As chatbots become consumer front-doors, monetization becomes destiny
Ads are more scalable and better at maximizing the value of attention than affiliate links, which mostly monetize only commercial-intent queries and can create incentive conflicts with retailers and the review ecosystem
Chatbot monetization is a design problem. Users expect context and editorialization, which can clash with native ad insertion
Our Takeaway:
As AI assistants evolve into digital storefronts, the scarce resource shifts from search links to trusted intent. The ultimate winner will be whoever owns the user profile, effectively controlling both the targeting capabilities and the flow of payments
Should ads prevail over affiliate revenue, brands face the challenge of proving exactly which suggestions AI shared. Cryptography provides the solution, offering the verifiability needed for brands to stake a definitive claim on earnings based on proven attribution
Sharing user context risks trapping us once again in the walled gardens of Big Tech. To avoid this outcome, we need data sovereignty, and zkTLS will be the key here
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Crypto is Ready to be Boring Now
Author: Christian Catalini (Co-Founder & CSO of Lightspark, Co-Creator of Facebook Diem / Libra)
TLDR:
The cryptocurrency industry is currently undergoing a fundamental phase shift, transitioning from a decade of speculative volatility to a period of boring infrastructure integration. Christian Catalini, the co-creator of Facebook Diem (formerly Libra), argues that the catalyst for this maturation is not a novel cryptographic breakthrough but the establishment of clear rules, specifically regarding stablecoins, which has effectively released the handbrake on institutional development.
We are presently navigating a period of "Infrastructure Inversion." This is the awkward interim phase where disruptive technologies must run on legacy rails before establishing their own dominance. Much like Netflix relied on the US Postal Service to mail DVDs before internet bandwidth allowed for streaming, crypto is using traditional financial networks (like using a crypto card at a Visa terminal) to bootstrap its utility.
However, for this new financial layer to scale globally, the industry must solve the identity crisis, particularly in the age of AI. World (formerly Worldcoin), the project co-founded by OpenAI CEO Sam Altman, has emerged as the primary architectural response to this challenge. By pivoting from a user acquisition model to one based on Proof of Personhood, World is building the verification layer necessary to distinguish biological users from AI agents. This suggests a future where crypto operates not as a casino, but as the invisible, essential plumbing of the digital economy.
Our Takeaway:
We view the “infrastructure inversion” as a necessary phase, and one that will become a strategic distribution hack. By piggybacking on banking and fintech giants today, crypto is effectively borrowing the trust and reach of incumbents to solve its own user acquisition problem. This stablecoin sandwich is temporary scaffolding for the next thing. Once these connections are normalized, the switch to onchain settlement becomes a silent backend toggle. The result is that banks risk being demoted to mere front-end interfaces (customer service), while the actual value accrual shifts to the settlement layer, where costs trend to zero and margins are captured by the protocol.
Christian identifies “App Store Arbitrage” as a margin play. The real implication is that wallets are becoming the new Operating System. Silicon Valley has failed to build a WeChat of the West because Apple and Google strangled the economics via their 30% tax. By bypassing these gatekeepers, crypto rails finally make the Super App unit economics viable. For Web2 founders, this means the next great distribution war won’t be fought in the App Store, but inside digital wallets that can host native applications, identity, and payments in a single, rent-free ecosystem.
Identity becomes the New API Key for the Internet. In a world of infinite synthetic content, Proof of Personhood is not simply a KYC tool. We are seeing the compliance function for the AI age starting to form. We expect this to be a hedge against the collapse of the ad-supported economy. In a world of infinite AI content, the “view” loses all economic value because it can be synthesized for free. We believe this forces a shift from an internet monetization model based on volume (CPM) to one based on verification. For Web2 platforms, integrating World ID or Alien will be about more than stopping spam. It will be the only way to prove to advertisers that they are paying for human attention. The Human Check becomes the new Blue Check, but instead of status, it signifies the only inventory worth buying.
Power Quote:
There may need to be two kinds of money: machine money, and human money.
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Love the verifiable compute angle here. The trust bottleneck you're describing reminds me of how much easier life got when we could finally prove code executed correctly rather than hoping it did. I worked with some early zkSNARK experiments and the mental model shift was real, once you stop asking "do I trust this provider" and start asking "can I verify this proof," the entire infrastrucutre stack unlocks differently. The AI accountability problem basically becomes a correctness proof at scale.