Cardano's success depends on the network effect

Fiat currencies have the largest network effect in the world. In most countries, usage reaches 100%. Users generate a huge number of transactions, which reinforces the network effect of banks and money-transmitting services. Services with a strong network effect are very difficult to compete with, as users like to stay with a service that is reliable and to which they are accustomed. The social networks with the largest number of users are the most attractive to other new users. It is almost impossible for newcomers in this area to get a foothold. If they are to succeed, they need to come up with something fundamentally new. Cardano, and by extension all blockchain networks, face a daunting task. How to get a strong network effect in a world where the cards are dealt.


  • The network effect can be considered as the intrinsic value of blockchain networks.
  • Cryptocurrency holders who continue to use fiat currencies essentially maintain their 100% network effect.
  • Storing value is not the main purpose of blockchain networks and without the growth of a direct network effect, they may disappear.
  • Internet users must take back power and control over the networks they use.
  • The network effect can grow due to the greater versatility of the Cardano platform.

This article was prepared by Cardanians with support from Cexplorer.

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