Bitcoin goes up. Bitcoin goes down. Maximalists laugh, skeptics sneer. It’s an emotional roller coaster ride.
For a reason. Money is simply a belief held by a lot of people. The distillation of a shared confidence in the future. It’s what we call a “belief network effect.” It’s the same mechanism you see with gold and religions.
But to understand Bitcoin’s potential value, we need to think from first principles, not from today’s price. There’s underlying math at work, and BTC represents more than just money. To see what’s driving and defending the future of Bitcoin, we need to look at the network effects.
In this short NFX video, we summarize our perspective on the real meaning of Bitcoin. We analyze the various network effects, defensibilities, and external influences on Bitcoin — and its place in the crypto and Web3 ecosystem.
The reinvention of money, the decentralization of finance, and the emergence of Web3 are well underway. Bitcoin, regardless of the price of the day, will continue to be a big part of that story.
For a longer and more in-depth essay further analyzing the network effects of Bitcoin for Founders and investors, read Bitcoin Killed The King.
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