A review for

Managing Partner at Multicoin Capital Source
Network effects and competitive moats are generally misunderstood. Contrary to popular belief, there are no networks that exhibit n^2 network effects, and in fact many exhibit log(n) network effects, notably fungible asset exchanges. Bitcoin as digital gold will be subject to the perpetually sub-linear log(n) network effect, whereas Bitcoin as digital cash can achieve super-linear network effects as crypto adoption grows from <1% to 50% of the global population. The cryptocurrency that becomes the dominant store-of-value will by definition need to exhibit super-linear network effects as it grows.

Moreover, other types of competitive moats such as brand and broader ecosystem integrations do not exhibit increasing returns to scale, and can be easily overcome by a competitive network with super-linear network effects. We already have ample evidence that this is true.