The secret of why Facebook and Twitter could become monopolists lies in their network effects. They are only suitable as social platforms if there are users who fill them with content. It is in the nature of things that social media produces few, really relevant players. Larger distribution of users on various platforms means less benefit for the individual. This phenomenon is described with the so-called network effects. At the time, Robert Metcalfe had put this into a mathematical context.
Network effects are also essential for money. It can be seen intuitively that it is more pleasant to design currencies for the largest possible economic areas. This is one of the reasons why the euro was introduced. In other words: money always has a tendency to monopolize itself. Gold is the striking proof of this thesis. If there were no fiat money, there are good reasons why we would still use gold as a means of payment. Bitcoin also relies on network effects. Because what good is money to me that nobody accepts? Bitcoin acceptance can, however, be read off quite well from the total number of wallets – and this is increasing steadily. This year alone, the number of digital wallets registered on Blockchain.com grew by 17 percent and is currently 52.2 million.