Demographic Deflation Era: Why Web3 and AI Are No Longer Choices

Jan 22, 2026 12:25:16

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Author: Amelia I Biteye Content Team

For the past hundred years, almost all economic growth models have assumed one premise: the next generation will have more than this generation.

More population means more abundant labor, a larger consumer market, and more predictable long-term returns.

But this premise is failing globally.

China, Japan, South Korea, Europe, and even the United States - declining birth rates are transitioning from "statistics" to a structural reality.

And when "people" are no longer the most abundant, cheapest, and replicable factor of production, the entire narrative of technology and institutions will be forced to be rewritten.

The emergence of Web3 and AI is not a coincidental technological wave but an inevitable response to the era of population deflation.

I. Population Disruption: An Underestimated Systemic Risk

When discussing population decline, many discussions only focus on "labor shortages."
But if you only understand it as a "labor issue," you will severely underestimate its destructive power.

What population deflation truly erodes is a deeper three-layer structure.

1️⃣ Labor: From a cyclical issue to an irreversible structural scarcity

China's birth rate disruption (2010--2023)
What you see visually is not a "decline," but a clear cliff-like drop.

Taking China as an example:

In 2016, the number of newborns was about 17.86 million.
In 2023, the number of newborns is about 9 million.
By 2025, it will drop below 8 million.

In just seven years, it has been directly halved.

What does this mean?

The people born in 2023, when they enter the labor market around 2045, will not be "a little less," but "half as many."

This is not a cyclical fluctuation but a collapse of population structure.

More critically, this trend has been confirmed by long-term forecasts: according to the United Nations' "World Population Prospects 2022" report, China's labor force aged 15-64 will decrease by about 170 million from 2020 to 2050.

In the past, the business system assumed one premise: "People can always be hired; it's just a matter of price."

But in the era of population deflation, the problem has changed.

Delaying retirement, introducing immigrants, and providing childbirth subsidies are all slow variables.

And the business system cannot wait twenty years.

This is precisely where all technological narratives begin to distort.

2️⃣ Attention and Creator Supply Shrinking in Sync: The Hidden Pitfall of Web2

The decrease in the young population brings not only a decline in labor but also a more concealed and deadly problem: who will produce content, and who will consume content?

The number of content producers is decreasing.
The spread of new cultures and narratives is slowing down.
The logic of platform traffic growth is failing.

The model that Web2 relies on, "user growth → traffic → advertising → revenue sharing," is fundamentally built on population expansion.

When new users no longer appear, platforms begin to become inward-looking, rules start to change frequently, and trust between creators and platforms collapses.

And this is the most difficult structural flaw for Web2 to repair in the era of population deflation.

3️⃣ Systemic Collapse of Long-Term Demand: Long-Termism is Being Forced to Reassess

Real estate, education, long-term consumer goods, pension systems…

The commonality of these systems is that they all imply one assumption: there will be more people in the future.

When this assumption is broken, all "long-term assets" will be revalued.

II. Why is AI a Necessity in the Era of Population Deflation?

Human labor contraction vs. AI capital index expansion

On one side is a slow but certain decline, and on the other side is exponential growth. The only "labor" that can still expand is not human.

If population deflation changes the problem itself, then AI is becoming the only viable answer.

1️⃣ AI is not an efficiency tool, but a "de-humanizing tool"

We are accustomed to describing AI as an "efficiency tool."

But in the real world, it does not solve efficiency problems but a structural problem: the system no longer needs so many people.

AI customer service, AI content generation, AI research assistants, AI trading systems - their significance is not to make people 20% faster but to remove "humans" from the system's necessary conditions.

In a world of population deflation, the real question is no longer: "Can this position find someone?" but rather: "Does this process still need human participation?"

AI is not replacing inefficient humans; it is rewriting the entire society's dependency assumption on "human labor."

2️⃣ AI is the only labor force that can grow exponentially

Population: linear growth, or even negative growth
AI: computing power, models, data → exponential expansion

This is also why capital continues to heavily invest in AI despite strong macro uncertainties.

Because in the era of population deflation, only AI possesses the "scalability."

3️⃣ AI allows "individuals" to become production units again

Compression of production units (team → individual + AI)

From "10-person teams" to "1 person + AI," production units are being rapidly compressed.

AI is giving rise to a new organizational form:

One-person companies
Super individuals
Solo founders
AI Native creators

When society cannot mass-produce young people, the system can only choose to amplify individuals.

III. What Role Does Web3 Play Here?

If AI addresses the question of "who will do the work," then Web3 addresses a more fundamental issue:

In an era of fewer people, how do we collaborate, distribute, and build trust?

1️⃣ How to Collaborate at Low Cost in an Era of Fewer People?

DAOs, permissionless collaboration, project-based contributions------

Web3 reconstructs "organizations" from long-term employment relationships into temporary, flexibly combinable collaborative networks.

As hiring becomes increasingly expensive, trust and settlement must be automated.

2️⃣ How to Distribute Value in an Era of Fewer People?

In an age of scarce labor, if value distribution is not transparent, the system will quickly lose participants.

Tokens, on-chain incentives, and instant settlements do not solve "speculation" but a real problem:

How to ensure that scarce labor is willing to stay and continue to build?

3️⃣ How to Establish Long-Term Trust in an Era of Fewer People?

The younger generation's trust in long-term commitments is collapsing:

Distrust in pensions
Distrust that platforms won't change rules
Distrust in the long-term incentives of centralized institutions

Smart contracts and on-chain rules essentially answer:

When there are not enough people and not enough trust, can the rules execute themselves?

IV. Web3 + AI: A Complete Solution for the Era of Population Deflation

An increasingly clear judgment is forming: Web3 is not a competitor to AI but the institutional shell of the AI era.

What do AI agents need?

Identity
Wallet
Autonomous trading capability
Programmable rules

These happen to be the native capabilities of Web3.

In the near future, we may see:

AI native companies
AI autonomous DAOs
AI-to-AI economic collaboration

In this system, humans may no longer be the largest group of economic participants.

V. In Conclusion: What Does This Mean for Individuals?

For individuals, it is a cruel but real fact: you will no longer be lifted by the dividends of "population growth."

But it also means new opportunities:

AI amplifies individual productivity
Web3 allows individuals to directly participate in the global system
A world with fewer people is actually more friendly to high-cognition, high-action individuals

If you are an investor/creator, here are action suggestions from Biteye:

1️⃣ For Investors:

Population deflation is a certainty variable on a 20-30 year scale, not macro noise.
All business models relying on "population expansion" should be discounted in valuation.
There are only three directions worth long-term attention:
AI that can directly replace human labor
Tools that can amplify individual productivity
Web3 infrastructure that can operate in low-trust environments

2️⃣ For Creators/Individuals: