The usability of Bitcoin brings advantages to the network effect in this technology. The network effect gets stronger in Bitcoin than in other cryptocurrencies, according to a test.
The essay on the network effect on Bitcoin, written by financial consultancy Lyn Alden, gets rid of clues about how this computing and cryptocurrency protocol behaves, by design, to last over time and increase its benefits and capabilities.
Alden talks in her post about the network effect, and throughout the writing, she also relates it to Bitcoin:
“The network effect is the attribute of a company or other system in which, as more people use the network, it will become exponentially more valuable for each user. It is one of the strongest economic points that a system can have against its competitors”.
Investopedia Defines the Network Effect to Further Support us in Understanding this Concept
“The network effect is a case where the increase in users or participants improves the value of a good or service. The Internet is an example of the network effect. Initially, there were few users as it was of no value to anyone outside the military environment or the scientific research sector.”
As Alden argues, Bitcoin would feed and grow more significant thanks to unlimited connectivity between network participants, as well as its security and robustness, above other factors. Bitcoin would grow in the same way that technologies such as the telephone, the Internet, and social networks did back then.
The network effect bases its functionality precisely on how users’ connectivity grows in a network, technology, service, or product. The services also increase in quantity, but naturally, the increase in the user base depends on how well the application of such technology meets its users’ specific needs.
According to the author’s arguments, Bitcoin has already achieved more excellent usability by constituting itself as a more complex structure than it seems, creating many connectivity levels in a network with enough interactive layers.
Second layer solutions such as Lightning are an accessible sample of this layered growth in the technological sector. Simultaneously, the growing adoption of both small users and large institutions is an example of the network effect in the economic sector.
Lyn Alden Highlights that the Price of Bitcoin Could Go High or Fall in the Concise term
Alden also compares Bitcoin and other cryptocurrencies such as ripple (XRP), ether (ETH, Ethereum), stablecoins, Bitcoin forks such as Bitcoin Cash (BCH), and Bitcoin SV (Satoshi’s Vision) with other competitors in terms of being a reserve of value as Litecoin (LTC).
The network effect serves Alden to compare Bitcoin with other potent cryptocurrencies like Ethereum. Bitcoin’s powers in terms of the scope of its technology and the size of its economy make it the market leader.
Lyn Alden highlights that the price of Bitcoin could go high or fall in the concise term. But what happens to the price or some economic values such as the volume and value of transactions or the market capitalization will not disrupt, in any case, Bitcoin’s road to evolver as the most robust technologic and economical solution.
By: Jenson Nuñez
