What is the relationship between the value of a network system and the number of users?

Its value is proportional to the square of the number of users; the more network users, the greater the value. Metcalfe's law holds that: the value of a network is equal to the square of the number of nodes in the network, and the value of the network is proportional to the square of the number of networked users; that is, the more users a network has, the greater the The value of the network and each computer within the network will be greater, which is reflected in the high penetration rate of the network economy.

The operating environment of this tutorial: Windows 7 system, Dell G3 computer.

The value of a network system is proportional to the square of the number of users.

Metcalfe's law holds that the value of a network is equal to the square of the number of nodes in the network, and the value of the network is proportional to the square of the number of connected users.

Metcalfe’s Law (the law of network technology development)

Metcalfe’s Law ( English: Metcalfe's law) is a law about the value of networks and the development of network technology, proposed by George Gilder in 1993, but named after the surname of Robert Metcalfe, the pioneer of computer networks and the founder of 3Com. In recognition of his contributions to the Ethereum network. Its content is: the value of a network is equal to the square of the number of nodes in the network, and the value of the network is proportional to the square of the number of connected users.

This law points out that the greater the number of users on a network, the greater the value of the entire network and each computer in the network, which is reflected in the high penetration rate of the network economy.

The law states:

The value of a network is proportional to the square of the number of users. The more users the network has, the greater the value. In other words, the value of a network, such as a phone, increases with the number of users using it. eBay, the now booming e-commerce website, is the best example.

That is the value of the network ; (K is the value coefficient, N is the number of users.)

The value of the network is proportional to the square of the network size. The specific performance is that the value of the network is proportional to the square of the number of network nodes and the square of the number of networked users.

The theory behind

The theory behind Metcalfe’s Law is the so-called network externality effect (Network Externalty): the more users use the original For investors, not only will its effect not be the same as that of ordinary economic property (the more people, the less it will be shared), but its utility will be greater. Generally speaking, Moore's Law and the phenomenon of industrial convergence have resulted in ubiquitous informatization. Metcalfe's Law then connects ubiquitous informatization enterprises with the multiplier effect of network externalities, finally creating a scale comparable to the physical world. , a global e-commerce market full of countless business opportunities and amazing growth potential.

Meaning:

Metcalfe’s law is based on the fact that every new Internet user has more information exchange opportunities because of others’ Internet access, pointing out that The network has strong externalities and positive feedback: the more users connected to the Internet, the greater the value of the network, and the greater the demand for networking. In this way, we can see that Metcalfe's law states that there is increasing utility in consumption as a whole, that is, demand creates new demand.

Application value

Some blog portals calculate their value based on this law, and use this as the basis for calculating the equity gained by blogs participating in the portal. .

Metcalfe's law is a law about online resources. This law is determined by the speed of new technology promotion. Therefore, the more computers connected to the network, the greater the value of each computer. New technology only becomes valuable if many people use it. The more people use the network, the more valuable these products become, thus attracting more people to use them, ultimately increasing the total value of the entire network. A phone has no value, and the value of several phones is very limited. Only the communication network composed of thousands of phones maximizes the value of communication technology. When a technology has established the necessary user scale, its value will explode. How quickly a technology can reach the necessary user scale depends on the cost of users entering the network. The lower the cost, the faster it can reach the necessary user scale. Interestingly, once the necessary user scale is formed, new technology developers can theoretically increase the price to users because the application value of this technology has increased than before. This is further derived from the law that the value of a certain commercial product increases with the number of users.

The peculiarity of information resources is not only that they can be consumed without loss. For example, an ancient book has been "consumed" from ancient times to the present, but it cannot be "consumed", and the consumption process of information is likely to be information at the same time. The production process, the knowledge or feelings it contains generates more knowledge or feelings among consumers. The more people consume it, the greater the total amount of resources it contains. The power of the Internet lies not only in its ability to increase the number of consumers of information to the maximum (all human beings), but also in that it is an interactive medium that allows simultaneous transmission and feedback (this is the most different from newspapers, radios and televisions). same place).

So Metcalfe concluded that as the number of people surfing the Internet increases, online resources will grow exponentially.

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