How Does Network Effect Influence a Blockchain’s Value?

A network effect increases a blockchain's value as more users, developers, and applications join the ecosystem. This growth leads to greater utility and security, making the network more attractive to new participants.

Increased adoption drives demand for the native cryptocurrency, often leading to price appreciation. Conversely, a weak network effect can lead to a 'death spiral' of declining value and utility.

It is a critical driver of long-term viability.