Frederick Bott
1 min readMay 14, 2019

It is simply Metcalfe’s law at work. The long term market value follows the square of the number of users, multiplied by a utility factor.

It is an exponential characteristic followed by all cryptocurrencies, whilst the network rate of expansion is increasing.

The utility factor of Bitcoin took a hit when the system encountered a scaleability limit around the end of 2017.

If it had not hit that limit, the price would have carried on, way beyond $20,000.

Now, with lower utility, the number of users is still increasing.

Each time a whale sold their holdings, a number of new users joined the network, buying pieces of the former whale holdings, with lower holdings each.

In effect, the holdings became more distributed, and the price is ratcheted up.

In other words, distributing the holdings over a larger number of people pushes the price up.

If ever there was proof needed to show equality being of higher value than inequality, this is it.

The Gini co-efficient is another way of looking at exactly the same phenomenon.

It is something which I believe is being ignored or even denied by those who still believe in the “zero sum game”, probably still the vast majority of people.

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