Digital blockchain networks appear to be following Metcalfe's Law

An analysis of some of the recent blockchain networks is presented to determine if they satisfy Metcalfe's Law, as has been shown for some online social media networks. The value of the network was modeled based on the price of the digital currency in use on the network, and the number of users by the number of unique addresses each day that engage in transactions on the network. The Bitcoin, Ethereum, and Dash networks were analyzed. The analysis shows that the networks were fairly well modeled by Metcalfe's Law, which identifies the value of a network as proportional to the square of the number of its nodes, or end users. A new network model was also presented that shows the value to be proportional to the exponential of the root of the number of users participating in the network, and shows good agreement as well. Conditions for determining critical mass based on the new model were also presented. Finally, the potential for identifying value bubbles that can be spotted as deviations in value from the model was discussed and illustrated using the data from one of the networks. Those value bubbles show up where repeated extremely high value increases are not accompanied by any commensurate increase in the number of participating users, or any other development that could give rise to the higher value.