5-1b1b1a2 Network effect means compounding

5-1b1b1a1 Things can become easier the more complexity you have (Network effects = Power-law)
7-1a2a3 Win at the corner then come back (傾く・バロック)

• Network effects take small advantages and snowball them into avalanches

  • 6-3b3g Federated (protocol) networks have a tendency, a fundamental by-product of their architecture, to evolve into corporate networks because network effects ensure that small advantages compound to create big winners
    • 5-1b1b1a1a Pareto principle (or law of the vital few) - 80% of the effects come from 20% of the causes

• More people, more value

  • 12-1a2c Digital network can solve the problem of network defects (both as a failure and a political defection) because not constrained by the arbitrary state and its physical borders means it doesn’t get too big or too complex

• Ask: does this beget network effect?

  • Do not misunderstand the extraordinary forces that network effects unleash (2-1b2c ‘Compounding’ - Permeate across the timeline)
    • Remember:
      • 5-1b4c Exponential growth feels flat in the beginning, precisely why it’s worth making an extraordinary effort to get it started. You can also follow the Fun Criterion (the latter likely exhausts the former). Consistency is the key.
        • 5-1b4b Compounding is usually too slow to notice. You have to be deliberate in how you think and what you see.
          • 2-1a1a4b Compounding is usually too slow to notice, making it easier to discount both how much progress and catastrophe are achievable

• 5-1b1b1a3 Network effects (digital) ＞ Supply and demand (physical)

  • “Skeptics sometimes suggest that NFTs will restrict the sharing of media. In fact, NFTs provide an incentive to loosen restrictions. Copying and remixing generally increase the value of NFTs, just as more players in video games increase the value of virtual goods. The same effect happens with physical art too. Both owner and artist can benefit from copying because, as the art is more widely shared, the original copies can grow in value. In the extreme case, a work of art, like the Mona Lisa, can become a widely reproduced cultural icon.”