The Bitcoin whitepaper was published by Satoshi Nakamoto in November 2008, and 13 years later, it has a market cap of over a trillion dollars and is on track to become the most valuable asset on Earth. The crypto asset class is growing faster than any other in recorded history, with over 150 million users and growing at 113% per year. Raoul Pal, CEO of Real Vision and former hedge fund manager, discusses the importance of network effects and Metcalfe’s Law in predicting where the space is headed. Fractal log charts are used to compare the growth of crypto assets, and the key takeaway is that network effects are crucial to success in the crypto market.
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Introduction
Satoshi Nakamoto published his legendary Bitcoin whitepaper in November 2008. Since then, crypto has become the fastest growing asset class the world has ever seen. In this video, we’ll be diving into two key concepts, network effects, and Metcalfe’s Law, which can give us important clues about where this space is headed.
The Early Days of Crypto
Bitcoin has over a trillion dollar market cap and is on its way to overtaking gold as the most valuable asset on Earth. And the most exciting part is how early we still are. We’re only beginning to understand its full potential, let alone unleashing it.
Understanding Metcalfe’s Law
Metcalfe’s Law states that the value of a network is proportional to the square of how many nodes it has. Value is based on the number of possible connections, which means more users or devices participating in any given network create more connections. Companies like Facebook, Amazon, and Google became global supervisors thanks to Metcalfe’s Law, network effects, and unprecedented growth in adoption.
Metcalfe’s Law in Crypto
Crypto and blockchain are the fastest adoption of any technology in all recorded history. Crypto has almost 150 million users and is growing at 113% per year. If we continue at this rate of adoption, crypto will have a billion-plus users by 2024 and a market cap of over $200 trillion within a decade.
Fractal Log Charts
Adoption effects seem to be a sort of human behavior thing, and fractal log charts illustrate the same point. Mind you, network effects are the name of the game and matter the most. Solana and LUNA are following an almost identical trajectory to Ethereum back in 2017. Investing in protocols and projects that have network effect or potential to achieve it is how you win the game of crypto.
Conclusion
Knowing where this thing is going develops the conviction you need to succeed in the space. Crypto is growing at twice the speed as the fastest adopted technology in human history. Everyone and their dog is coming for crypto. It has so much more room to grow, and our job is to front run them. Realize your profits and reinvest them back into bear market protocols and projects. That is how you win the game of crypto.
