Metcalfes Law, which measures the value of a network, can
calculate a cryptocurrencys value, assuming the key measure
of value for cryptocurrencies is the network of entities who use them.
The original law is based on the idea that the value of a network grows
in proportion with the number of all possible connections. In other words,
it assumes that all nodes can connect with each other.
This can happen for short periods of time because of factors such as herding
behavior. But without an infinite number of people it is not sustainable. For this
reason alone, a crash or correction is inevitable.
A key concern must then be how to attract early adopters and opinion leaders prior
to reaching critical mass.
As the number of users increases, the system becomes even more valuable and
is able to attract and retain a resilient high-quality stakeholder base, organically
growing the networks Member Services and Utility Values.
The key strategy here is to create a system that builds-in enough tangible and
experiential value, to early adopters, without significant network effects at the outset.