The "Network Effect"? Why current Steemit contributors may hit it big.
The Network Effect
A Network Effect is a phenomenon in which a service becomes exponentially more valuable when more people use it. Take the internet for example. When it first started out it wasn't that useful to the everyday person. As more and more users got online, it became more and more valuable. New users meant more content creators and more people to communicate with.
Other examples of technologies that experienced value through the network effect:
- Public Telephone System
- Twitter
- Facebook
- YouTube
Being first - is EVERYTHING
Once a technology or social media platform has reached a critical mass of users that triggers a "Network Effect" it is hard for it to be dethroned. This is even the case if something better does come along. The internet itself is full of dinosaur protocols that have better replacements but hardly ever see use (IPv4 vs IPv6). There are countless alternatives to Facebook and Youtube that provide a better user experience and are less invasive yet they hardly hold a candle on the market share. Once the Network Effect is achieved the technology gains an immortal like existence.
What does that mean for Steemit users? $$$
SteemIt is relatively new and it is far from reaching any sort of Network Effect. This is great news for the current contributors on Steemit. This will allow us to build a strong following and acquire Steem over the next few years. Slowly week after week and month after month new users will come to the platform. As more users sign up the growth rate will exponentially grow until we hit a point where you won't be able to find someone who hasn't heard about Steemit. As with almost everything in life, those who got there first reap the rewards.
Please remember that the above post is not financial or investment advice but instead a look into how I invest in crypto. Always seek assistance from a professional financial fiduciary.
If you would like to learn more about my investment practices please visit my website cryptoindex.info
Interesting. I like your thoughts, but what if that point is never reached? What if someone else builds a better mouse trap before then?
I mean much of the new users we are attracting are leaving on a daily basis. The retention rate appears to be terrible to me.
Plus the site has basically been down off and on for over a week now. That isn't good for keeping people here.
I feel like it all depends on the price and the price depends on new users. Sort of a catch 22.
If the price goes down, rewards go down and this whole thing implodes. If the price goes up, rewards go up and new people sign up.
The question is how do we get the price to go up to attract new users without first getting said new users???
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STOPGreat perspective, I completely agree!