**Metcalfe's law:** 
> Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n2).

So accordingly, the actual use of the network by users determines the value of the network using the simple formula of (n2). This also would apply to Steemit.

- Market cap for Ethereum currently sits at: 	$31,784,527,111- 
- Transaction volume for Ethereum sits at 540k per day and rising (it is higher than Bitcoin!)
- But how many unique users? 11.9 million accounts on Coinbase alone.

Of course we could also go by unique addresses of which Ethereum has way more but this is not so accurate in my opinion. Unique user data can be obtained from exchanges and this data in my opinion is the key component for predicting the value and estimating the price. In either case, Ethereum user growth has grown a lot in the past 6 months and for this reason I think it is very under valued based on Metcalfe's law. Anyone with the user metrics for Steem feel free to plug that into the equation.


If you model Ethereum based on Metcalfe's law then the value would put the price of ETH much higher. 
If you model Bitcoin based on Metcalfe's law then Bitcoin should have a market cap closer to $100 billion than where it is now.

The key metric to track is the growth of the unique users of either of these two networks. Bitcoin and Ethereum are both on Coinbase so technically every Coinbase account is a potential Bitcoin, Ethereum and Litecoin account. Coinbase user growth can indicate how we can model the growth in price according to Metcalfe's law in my opinion to produce more exact numbers but I have not worked those out yet. 

What I do have is that Coinbase in November 3rd or around there, added 100,000 users in one day!


This is not investment advice. This is just an interpretation of the data for educational purposes. Always make your own decisions.

References
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Alabi, K. (2017). Digital blockchain networks appear to be following Metcalfe’s Law. Electronic Commerce Research and Applications, 24, 23-29.

Chalasani, S. (2008). On the Value of a Social Network. arXiv preprint arXiv:0812.2891.

1. https://2012books.lardbucket.org/books/creating-services-and-products/s04-12-there-is-power-in-numbers-netw.html
2. https://www.forbes.com/sites/anthonykosner/2012/05/31/facebook-values-itself-based-on-metcalfes-law-but-the-market-is-using-zipfs/#2c52c5eb68f5
3. https://en.wikipedia.org/wiki/Quadratic_growth
4. https://coinjournal.net/ethereum-process-approximately-twice-transactions-bitcoin/
5. https://bitinfocharts.com/comparison/ethereum-transactions.html
6. https://www.cnbc.com/2017/11/03/coinbase-adds-100000-users-after-cme-announces-bitcoin-futures-plans.html
7. https://blockchain.info/charts/n-unique-addresses?timespan=all
8. https://etherscan.io/chart/address
9. http://collaboration.wikia.com/wiki/Reed%27s_law