An Alternative Model of Metcalfe's Law for Valuing Bitcoin

10 Pages Posted: 13 Dec 2017 Last revised: 6 Feb 2018

See all articles by Ben Van Vliet

Ben Van Vliet

Illinois Institute of Technology - Stuart School of Business

Date Written: January 30, 2018

Abstract

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

Van Vliet, Ben, An Alternative Model of Metcalfe's Law for Valuing Bitcoin (January 30, 2018). Economics Letters, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3087398 or http://dx.doi.org/10.2139/ssrn.3087398

Ben Van Vliet (Contact Author)

Illinois Institute of Technology - Stuart School of Business ( email )

Stuart Graduate School of Business
565 W. Adams St.
Chicago, IL 60661
United States

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