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Executive summary: Blockchain Network Effects — the Next Bull Market Driver?

The network effects blockchains develop will make or break their long-term success. In this article, I look at case studies of Bitcoin and Ethereum network effects.
Executive summary: Blockchain Network Effects — the Next Bull Market Driver?

Executive summary:

  • Network effects mean the more people use a technology, the exponentially moe useful it becomes.
  • There are one-sided networks (telephones) and two-sided networks (marketplaces). There are also direct and indirect network effects (if one group benefits from the growth of another group).
  • Bitcoin's network effects as a payment network and store of value are currently stalling.
  • Bitcoin will need to separate its base layer use case (SoV) from its P2P payments use case (L2) to develop stronger network effects.
  • Ethereum paradoxically suffers from negative network effects because more demand for blockspace results in higher gas fees and slows down the network.
  • Successful scaling and increased composability would yield direct positive effects.
  • Ethereum will need to better define its value pitch to develop stronger network effects.

Full article:

Blockchain Network Effects — the Next Bull Market Driver? | CoinMarketCap
Blockchain network effects — you’ve probably never heard of them, and yet they’re super important for mooning or nuking your coins.