The network effect posits that any network is only as good as the number of individuals who’ve bought into it, figuratively and in this case literally. This recent Times piece on “crypto-bros”** elucidates the social side of cryptocurrencies. In the context of emerging financial systems, acting socially reassures crypto purchasers of the security and growth of the network. So if cryptocurrencies are social networks, what can we predict about their rise and potential fall?
Crypto fiefdoms will emerge where certain markets are served by specific currencies.
Let’s jump in the wayback machine and check out Vincenzo Cosenza’s earliest map of the top social networks in every country. Sure, Facebook predominated even in 2009. But there were 16 different social networks that were all number one somewhere!
Eventually, a handful of currencies will dominate…
Jump forward in time to January 2017. It’s no surprise that Facebook is the 800-lb gorilla. But the #1 spot in each country is now split between only 7 social networks.
…but it will take time.
Twitter launched in 2006, but didn’t appear as #1 in any country until 2014. Zing, on the other hand, held on as a #1 until 2012.
More currencies will launch before clear “winners” emerge.
Facebook, Odnoklassniki, QQ/QZone, and V Kontakte are the only social networks that stayed #1 somewhere from 2009 to 2017. But Instagram, to take one example, wasn’t launched until 2010 and didn’t show up as #1 in any country until 2017 (it’s been a consistent presence on the #2 maps since they launched in 2015).
Liz Welsh 