Network effect is powerful. If we can build that for Incent, we’re in a strong position too.
One of the main objections people have to holding or using cryptocurrency is the idea that there’s nothing underpinning its value. This is a widespread view, both among public figures and the broader population.
- Donald Trump famously tweeted, ‘I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.’
- Warren Buffett called Bitcoin ‘a mirage...The idea that it has some huge intrinsic value is just a joke in my view.’
- Jamie Dimon, JPMorgan’s CEO, has called bitcoin ‘worse than tulips’
So why have technology experts like Twitter founder Jack Dorsey, billionaire investor Tim Draper, Tesla CEO and SpaceX founder Elon Musk, Apple co-founder Steve Wozniak, and other major industry figures come out so strongly in favour of Bitcoin?
Aside from grasping the remarkable technology that underpins cryptocurrencies, these tech experts understand the realities of network effect. Just like dollars or euros, crypto is not backed by any physical commodity. It is backed by its user base – something less tangible but very powerful.
Network effect is so important because of the mathematics of networks. Doubling the number of people that use Bitcoin or another technology doesn’t just double its utility – it quadruples it. This helps explain the rapid growth of social networks like Facebook. And, in fact, there is research that links both Facebook’s share price and Bitcoin’s value with the size of their respective user bases.
This is why Bitcoin’s value won’t just ‘go to zero’ overnight. It has a large and active community. Many of these are involved because they love the ideology of cryptocurrency, not just the technology or the money. And analysis of the blockchain as well as anecdotal evidence shows that a large proportion are long-term holders who have no intention of selling any time soon.
For bitcoin to ‘go to zero’, a sizeable majority of these users would have to abandon it, all together, for no apparent reason. That’s about as likely as Facebook’s share price plummeting because a majority of its users left the platform at the same time. In reality, both Facebook and Bitcoin’s networks are growing.
It’s our aim to build strong network effect, using retailers as a gateway to large user base of customers. Additionally, these users won’t simply hold Incent passively. They will engage with our ecosystem every single time they spend money. Every transaction they make will see a little extra demand for Incent on the open market. We already have a referral programme, so every new user can be an ambassador for Incent, inviting new people to join and benefit.
If that snowball effect brings with it a wider community of investors and traders, so be it – these will add further liquidity and demand to Incent. But our core vision is for Incent to be a means of recapitalising ordinary consumers who find themselves squeezed between mounting debt and stagnating incomes.
The best way to achieve that is with a large network, a compelling vision and easy on-ramps. The rest should take care of itself.
Incent is live! Australian users can access rewards in Incent tokens on every spend they make. To find out more, visit www.incent.com.
The content of this article does not intend to provide any general or personal financial product advice (as defined in Section 766B of the Corporations Act). It is meant to be informational and of a general nature only. You therefore need to carefully consider whether the information in this article is relevant to you in light of your particular needs and circumstances.
INCNT is a cryptocurrency and its value (along with other cryptocurrencies mentioned in the article) will depend entirely on the current market supply and demand. Therefore, we cannot guarantee the value of any cryptocurrency (including INCNT) at any time, nor do we guarantee that the value of any cryptocurrency (include INCNT) will either rise or fall (or become valueless) in relation to any other form of value, including fiat currency, or other digital currencies. The article is not an endorsement of any type of cryptocurrency.