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Network effects: ethereum

Network effects: ethereum

Modelling evolving decentralization through network valuation

Feb 03, 2022
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Network effects: ethereum
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Author’s Note:

This writing is part two of two: the first piece serving as a foundational walkthrough on network effects while focusing on Bitcoin. If you have technical or mathematical questions about this writing, I would highly recommend that you start with the piece attached below.

Data Always.
Network Effects: Bitcoin
Author’s Note: This writing is part one of two: the second piece focusing on the network effects behind Ethereum’s growth and what those network effects tell us about Ethereum’s evolving decentralization. This intention of this writing, beyond exploring a network valuation model for bitcoin, is to act as a reference piece allowing the Ethereum model to h…
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3 years ago · 16 likes · 3 comments · T.

When discussing the network effects of bitcoin in the previous piece, I reasoned through data that as the Bitcoin network has evolved from a payment system into a store-of-value network, it is justifiable to consider all bitcoin holders as users rather than only those actively transacting on the network. Although some prominent figures argue that ether may become a better store-of-value than bitcoin, its long-term value proposition still hinges on active usage, and thus we should constrain our analysis to active addresses rather than non-zero addresses1.

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