A network effect occurs when the value of a product or service increases as more people use it. Simply put, the more participants there are, the more valuable the platform becomes for each individual user. This self-reinforcing cycle drives growth, as each new user makes the platform more attractive to others.

In today's economy, the most successful companies are those that can aggregate supply at scale. Instead of just owning a product or service, these companies create ecosystems where a large number of suppliers and consumers come together. Take Amazon, for example — it’s not just a retailer; it's an aggregator of countless suppliers and customers. The more vendors and shoppers it brings together, the more valuable the platform becomes, creating a snowball effect of growth.

Why is this the future? As technology lowers the cost of reaching global markets, platforms that can organize and connect vast amounts of supply will have the greatest leverage. They don’t just compete based on traditional business models; they harness the power of network effects to create value in ways that linear models can't.

The companies that succeed will be those that build platforms capable of aggregating supply. They’ll dominate because they can capture value at the intersection of demand and supply, fueling exponential growth and a cycle of increasing value for all participants.

#Bitcoin #NetworkEffects #AggregatingSupply