I earlier posted about how the #1 driver of a successful currency is the number of users…and now just found this recent paper that shows the exact same thing in a more mathematical way modeling BitCoin.
Specifically: "This paper demonstrates that bitcoin’s medium- to long-term price follows Metcalfe’s law.
Bitcoin is modeled as a token digital currency, a medium of exchange with no intrinsic value that is transacted within a defined electronic network.
Per Metcalfe’s law, the value of a network is a function of the number of pairs transactions possible, and is proportional to n-squared.
A Gompertz curve is used to model the inflationary effects associated with the creation of new bitcoin. The result is a parsimonious model of supply (number of bitcoins) and demand (number of bitcoin wallets), with the conclusion bitcoin’s price fits Metcalfe’s law exceptionally well."
Specifically the model was able to fit 84% of Bitcoin prices by mapping the number of bitcoin wallets.
This is of course intuitive (one person with a phone = phone has no value) vs a phone when millions of people have it has massively different value. The same reason Facebook shot up in value as it’s user base grew, Ebay became dominant even though anyone could make a similar site in a week,etc.
Anyway, this shows, in a more mathematical way, that medium term and longer, the value of Ada as platform/currency will not just be based only on it’s technical prowess, but the total number of users actually using it and the network effect / Metcalfe’s law.