An Alternative Model of Metcalfe's Law for Valuing Bitcoin
10 Pages Posted: 13 Dec 2017 Last revised: 6 Feb 2018
Date Written: January 30, 2018
This short paper presents a new model of the market capitalization of Bitcoin that builds upon a standard model based upon Metcalfe’s Law. The model incorporates the logistic diffusion of the innovation, which could be extended to capture population and economic factors. This model appears to have some improved efficacy over the standard model. Using this model, some areas for future research are briefly discussed.
Keywords: Cryptocurrency, Metcalfe’s Law, Diffusion of Innovation
JEL Classification: C5, C22, G1
Suggested Citation: Suggested Citation