The Marks of a Healthy Crypto Community Part 0
Healthy Crypto Communities Have Strong Tokens
Imagine Mark Zuckerberg sitting in his basement by himself. He’s on a website called Facebook just sending messages to himself. He uploads photos and comments on his own photos about how pretty he looks. He's a weird dude. He never launches the website. Never tells anyone about it. It’s just Mark Zuckerberg sitting in his underwear eating Cheetos and talking to himself online. Like I said, he’s a weird dude.
Now here’s the billion dollar question. How much is Facebook worth if only Mark Zuckerberg uses it? Same code. Same website. But it’s just Mark Zuckerberg sitting in his underwear eating Cheetos and talking to himself online. How much is Meta worth then? Remember, nobody else in the world is using it. Let me spoil it for you. It’s zero.
The Power of Network Effect
The value of Facebook doesn’t come from the technology. It comes from the users communicating with each other through the technology. Facebook makes money from advertising, and advertising becomes more valuable when millions of people are using the platform every day. Without the users Facebook is just a website.
Money is also a social network.
Anyone can make up their own currency. Just look at the beloved board game Monopoly. I can go around offering to pay people in Monopoly money, but nobody is going to accept it as payment. This is because money must be accepted by a large community for it to work.
This is why money has historically centered around nation states, empires, kings and temples. There was already a community there. The more people who use a currency or technology, the more useful and valuable the network becomes. Its value comes from the community using it.
The Importance of Community for Crypto
Since cryptocurrencies get their value from network effect, having a strong community is essential. Without people using a crypto, the network becomes useless and loses value. This is why healthy online and local communities are the backbone of crypto. Healthy crypto communities have healthy tokens.
Strong crypto communities create strong crypto networks:
Provides liquidity for buying and selling
Provides merchants who accept it as payment
Provides education and marketing
Provides developers who improve the technology
Provides businesses and individuals who use the token
When these things come together they create a powerful effect. Liquidity makes it easier to enter and exit the network. Merchants and developers make the token more useful. Enthusiasts spread attention and bring more people into the community. The result is a stronger ecosystem built around the crypto.
Conclusion
Value is a funny thing especially when it comes from a community. The larger and more important the community the more important the cryptocurrency associated with it becomes. Many people obsess over tokenomics, technical analysis or the technology behind a coin, but few consider the community itself. Technology matters. But a cryptocurrency without a real community is no different than Mark Zuckerberg sitting alone in his basement talking to himself online.
Final Word
You can’t separate the coin from the community.
"The value of a network is proportional to the square of the number of its users." — Robert Metcalfe
Disclaimer:
The information in this publication is for educational purposes only and does not constitute financial, investment, or legal advice. Always do your own research before making any financial decisions. Cryptocurrency investments carry risk, and past performance is not indicative of future results. I actively invest and trade in the crypto markets, and my personal portfolio and holdings change frequently. Nothing I share should be interpreted as a guarantee of performance or a recommendation to buy or sell any asset.