What is Metcalfe’s Law?

Metcalfe’s Law explains how the telecommunications network is affected by an increasing number of users. 

As the internet became more popular, Metcalfe’s Law allowed description Ethernet connection.

This concept was introduced by George Glider in 1993. It was then later credited to Robert Metcalfe, who played the part in the introduction of the internet, on the subject of the Ethernet. 

In essence, this concept works best with massive networks that have devices able to connect with each other. 

Let’s have a look at phones as an example. If you have a phone, but no one else does, then it brings absolutely no value to you since you can’t utilize it to its full extent. However, if there is a big number of people that use phones on a daily basis, then you lose value by not using one. When you own a phone, you’re considered to be part of a system that’s interconnected.  

Cryptocurrencies and the Metcalfe’s Law

Metcalfe’s Law has been applied in the crypto sector as well. It includes blockchains, smart contracts, cryptocurrency exchanges, and many other elements within the industry. 

For instance, Bitcoin, one of the most well-known companies in the sector, is a blockchain platform, a cryptocurrency, and a network that connects it all together. The rate of adoption in regards to all these aspects influences the price of BTC.

Metcalfe’s Law can demonstrate how Bitcoin prices will move in the medium term.