{"id":390,"date":"2018-01-17T08:51:34","date_gmt":"2018-01-17T08:51:34","guid":{"rendered":"https:\/\/blockchain-society.science\/?p=390"},"modified":"2018-01-17T08:51:34","modified_gmt":"2018-01-17T08:51:34","slug":"metcalfes-law-as-a-model-for-bitcoins-value-by-timothy-peterson-ssrn","status":"publish","type":"post","link":"https:\/\/blockchain-society.science\/?p=390","title":{"rendered":"Metcalfe&#8217;s Law as a Model for Bitcoin&#8217;s Value by Timothy Peterson :: SSRN"},"content":{"rendered":"<blockquote>\n<h1>Metcalfe&#8217;s Law as a Model for Bitcoin&#8217;s Value<\/h1>\n<div class=\"reference-info\"><\/div>\n<p class=\"note note-list\">23 Pages\u00a0Posted: 2 Dec 2017\u00a0Last revised: 21 Dec 2017<\/p>\n<div class=\"authors\">\n<h2><a title=\"View other papers by this author\" href=\"https:\/\/papers.ssrn.com\/sol3\/cf_dev\/AbsByAuth.cfm?per_id=2848613\" target=\"_blank\" rel=\"noopener\">Timothy Peterson<\/a><\/h2>\n<p>Cane Island Alternative Advisors<\/p>\n<\/div>\n<p>Date Written: October 9, 2017<\/p>\n<div class=\"abstract-text\">\n<h3>Abstract<\/h3>\n<p>This paper demonstrates that bitcoin\u2019s medium- to long-term price follows Metcalfe\u2019s 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\u2019s 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\u2019s price fits Metcalfe\u2019s law exceptionally well. Metcalfe\u2019s law is used to investigate Gandal\u2019s et.al [2017] assertion of price manipulation in the Bitcoin ecosystem during 2013-2014.<\/p>\n<\/div>\n<p><center><\/center><strong>Keywords:<\/strong>\u00a0Bitcoin, Metcalfe, Finance, Investment, Economics, Network Economics, Currency<\/p><\/blockquote>\n<p>Source: <em><a href=\"https:\/\/papers.ssrn.com\/sol3\/papers.cfm?abstract_id=3078248\">Metcalfe&#8217;s Law as a Model for Bitcoin&#8217;s Value by Timothy Peterson :: SSRN<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Metcalfe&#8217;s Law as a Model for Bitcoin&#8217;s Value 23 Pages\u00a0Posted: 2 Dec 2017\u00a0Last revised: 21 Dec 2017 Timothy Peterson Cane Island Alternative Advisors Date Written: October 9, 2017 Abstract This paper demonstrates that bitcoin\u2019s medium- to long-term price follows Metcalfe\u2019s law. Bitcoin is modeled as a token digital currency, a medium of exchange with no [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[8,22,26,5],"tags":[],"_links":{"self":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts\/390"}],"collection":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=390"}],"version-history":[{"count":1,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts\/390\/revisions"}],"predecessor-version":[{"id":391,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts\/390\/revisions\/391"}],"wp:attachment":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}