Hey all!
No, this isn't the Augur post, but it is coming.
In my last two posts, here and here, I focused on Tezos and its native coin and what I believe their value drivers are.
That, in turn, brought a germ of an idea into my mind.
Network Effects are more important to the growth of the blockchain industry than many of us realize.
As I posted previously, when you think about network effects, it can help to picture a platform like Ebay. Years ago, when it was first launched, it never would have continued to grow if both buyers and sellers didn't continue to flock to it. That's network effects in its most basic form, the idea that the more users that use a service, the more valuable it is.
Blockchain networks work the same way as Ebay and all sorts of popular platforms both because they depend on consistently increasing numbers of users to increase their security, as well as because the more users they get, the more their tokens are used(yes, even for HODLing).
In my mind, this idea of the token's value increasing with its network's user base is the central point of token economics as well. Therefore, in at least a general way, both network effects and token economics are almost synonyms.
As your favorite blockchain network grows, keep these ideas in mind, alongside the fact that as more users join, the network does its job in a better way. For one popular example of this in practice, look no further than Augur which has been improving more and more as more people get interested in it, including developers. Augur V2 makes the first iteration of the Augur marketplace for predictions look like the Netscape internet experience, compared to Brave and the experience we have now.
Over time, I'll build upon these ideas, including discussing how network effects are slowed down by regulatory gridlock as well as how we might improve them.
Until then, as always, reach out to me on Twitter here and I implore you to connect with all of the other wonderful writers @Publish0x as well and help this platform grow!
I appreciate you all and I hope you keep reading.
- Expat
