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==Network effects==
Metcalfe's law characterizes many of the [[network effect]]s of communication technologies and networks such as the [[Internet]], [[social networking]] and the [[World Wide Web]]. Former Chairman of the U.S. [[Federal Communications Commission]] [[Reed Hundt]] said that this law gives the most understanding to the workings of the Internet.<ref>{{cite web |url=https://spectrum.ieee.org/computing/networks/metcalfes-law-is-wrong |title= Metcalfe's Law is wrong | author = Bob Briscoe, Andrew Odlyzko and Benjamin Tilly | date= July
The law has often been illustrated using the example of [[fax]] machines: a single fax machine is useless, but the value of every fax machine increases with the total number of fax machines in the network, because the total number of people with whom each user may send and receive documents increases.<ref>{{cite web |url=http://www.cstep.in/uploads/default/files/publications/stuff/CSTEP_The_Dark_Side_of_Metcalfe%E2%80%99s_Law_Confpaper_2009.pdf |title=The Dark Side of Metcalfe's Law: Multiple and Growing Costs of Network Exclusion | author = R. Tongia | date= |accessdate=2017-12-19}}</ref> Likewise, in social networks, the greater number of users with the service, the more valuable the service becomes to the community.
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== Validation with actual data ==
Despite many arguments about Metcalfe' law, no real data based evidence for or against was available for more than 30 years. Only in July 2013, Dutch researchers managed to analyze European Internet usage patterns over a long enough time and found ''n''<sup>2</sup> proportionality for small values of ''n'' and (''n'' log ''n'') proportionality for large values of ''n''.<ref>{{Cite citation|doi=10.1016/j.infoecopol.2013.07.002|title=Empirical validation of Metcalfe’s law: How Internet usage patterns have changed over time|first1=António|last1=Madureira|first2=Frank|last2=den Hartog|first3=Harry|last3=Bouwman|author-link3=Harry Bouwman| first4=Nico|last4=Baken|journal=Information Economics and Policy|year=2013}}</ref> A few months later, Metcalfe himself provided further proof, as he used Facebook's data over the past 10 years to show a good fit for Metcalfe's law (the model is ''n<sup>2</sup>'' ).<ref>{{Cite journal
In 2015, Zhang, Liu and Xu extend Metcalfe's results utilizing data from [[Tencent]], China's largest social network company, and Facebook. Their work showed that Metcalfe's law held for both, despite the difference in audience between the two sites; Facebook serving a worldwide audience and Tencent serving only Chinese users. The Metcalfe's functions of the two sites given in the paper were <math>V_{Tencent}=7.39\times10^{-9}\times n^{2}</math> and <math>V_{Facebook}=5.70\times 10^{-9}\times n^{2}</math> respectively. <ref>{{Cite journal|title = Tencent and Facebook Data Validate Metcalfe's Law|last = Zhang|first = Xing-Zhou|date = 2015|journal = Journal of Computer Science and Technology|volume = 30|issue = 2|pages = 246–251|doi = 10.1007/s11390-015-1518-1|pmid = |last2 = Liu|first2 = Jing-Jie|last3 = Xu|first3 = Zhi-Wei}}</ref>
In 2018, Peterson applied Metcalfe's law to the [[cryptocurrency]] [[Bitcoin]], and showed that Metcalfe's law determined over 70% of Bitcoin's value.<ref>{{Cite journal|title = Metcalfe's Law as a Model for Bitcoin's Value|last = Peterson|first = Timothy|date = 2018|journal = Alternative Investment Analyst Review|volume = 7|issue = 2|pages =
== See also ==
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==Further reading==
*{{citation|date=Summer 2006|journal=Tennessee Business Magazine|first1=David|last1=Smith|first2=C. A.|last2=Skelley|url=http://www.tfi.com/pubs/w/pdf/TennessBus-8-06-Smith-Skelley.pdf|title=Globalization Transformation|pages=17–19}}
*{{citation|url=https://spectrum.ieee.org/computing/networks/metcalfes-law-is-wrong|title=Metcalfe's Law is Wrong|first1=Bob|last1=Briscoe|first2=Andrew|last2=Odlyzko|author2-link=Andrew Odlyzko|first3=Benjamin|last3=Tilly|date=July 2006|journal=[[IEEE Spectrum]]|volume=43|issue=7|pages=34–39|doi=10.1109/MSPEC.2006.1653003}}.
== External links ==
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