Hello dear virtual friends, how are you today? The most asked question these days is whether Bitcoin will continue to grow and until when? Will it start to fall when and when is the right time to buy or sell?
Cryptocurrencies are a self-regulating system that is fully affected by market laws. At first glance, it seems that the system is developing in such a way that in no way is it possible to predict the further behavior of the system and thus the movement of cryptocurrency prices. However, there are mathematical models that could relatively reliably calculate the parameters on the basis of which it is possible, relatively reliably, to obtain answers to these questions.
One of the mathematical models is the Metcalfoff law. The model was introduced by Robert Metcalfe back in 1980 and is based on the functioning of a network of compatible devices. At that time, the model referred to telephones and fax machines. The model was further developed by George Gilder and presented in 1993 in a form that describes the network effects of communication technologies, the Internet, and social networks.
Each participant in communication is defined as a communication node. Nodes can be interconnected and in that way, a communication network is realized. Without going into mathematics itself, in short, Metcalfoff's law proves that the value of each node increases with the number of nodes and their mutual connections.
Metcalfe's law says that the growth rate of a network can be mathematically predicted in correlation with the square of the number of users. Imagine if there was only one mobile phone in the world, it would be useless in itself. If there were only two mobile phones, the value would only exist for those two people who could communicate with each other. There are currently about 14 billion mobile phones in use in the world, so the use-value of each device is huge because we can call any of the 14 billion other devices from our mobile phones. The same goes for social networks, the larger the number of network users, the more valuable the service of the network itself becomes for the wider community.
If we look at the US dollar as a currency and if we ignore other elements for a moment, we will notice that a large number of countries in the world use the US dollar as a means of storing foreign exchange reserves as well as in mutual payments. It is clear that widespread use gives the dollar added value. If we apply the described postulates to the system of cryptocurrencies, we conclude that the value of cryptocurrencies grows the greater the number of their users. We are witnessing the appearance that as new players, especially institutional players, get involved in the game, the value of Bitcoin grows. The same goes for other cryptocurrencies, all in accordance with Metcalfe's law.
If we look at the size of the Ethereum network, ie the number of participants and interconnections, and look at the price path, it becomes clear that the Metcalfoff law can be applied to Ethereum as well as to Bitcoin. In general, it can be concluded that the more people use cryptocurrencies, the more their value will continue to grow. If we look at the movement of Ethreum from the angle of Metkalfof's law, its value will reach 20,000 USD.
The future will show whether the movement of cryptocurrency values ??can be predicted. For now, we have indisputable confirmations that there are mathematical models that confirm this.
