What Makes a Network Good

The growth of social networks has been the most influential change in our society over the last decade. It can often feel like these tools have been part of our culture for much longer than that; many of us can’t imagine our lives without them. For the first time since the dawn of the internet, social media has allowed the network effect to take hold globally. Because of how strong these connections are, they can shape grassroots movements and humanitarian impact in incredible ways. But there are other players influencing the game.

We know that Facebook and similar companies have hooked us on a product — one that functions like a Matryoshka doll of other products. This platter of “choices” is connected by people and companies, and their power lies in a web of trust and interest.

Digital platforms facilitate interactions or exchanges, and their architecture is a nucleus of ongoing innovation. It’s smart for businesses to model themselves in such a way that the network becomes the machine; the service, data, and audience are all built in. Until this innovative design becomes, as VR pioneer Jaron Lanier would put it, “a manipulation engine.”

Social media is a heady combination of advertising, addiction principles, and influence. Now, what if monetary transactions were the social tool? They would have to be free from each of these traits and sit very much outside of any central person, institution, or system. There may always be bad actors…but if those actors don’t have control, there’s nothing for them to gain.

When I first learned about Bitcoin, I recognized that its value was more than the sum of its parts. By providing people with an autonomous and meaningful use of currency (versus any that paper money arbitrarily assigns), it is a store of value for humanity that can continually exercise its potential in new ways — and increase its fluidity as it becomes more valuable for each user.

This concept has a name: the network effect. The network effect is touted as one of cryptocurrency’s most successful attributes; it’s how we come to acknowledge and rely on a tool that’s inherently useful and self-sufficient.

One illustration of this impact lies in Bitcoin’s layer two lightning network — where quick transactions of satoshis can take place instantly via smart contracts. If more and more users find significance in this updated digital process, it can increase the value of Bitcoin and promote it organically amongst masses of people based on utility alone.

This is exactly where Bitcoin’s network effect deviates so sharply from that of Facebook or Google. There’s no advertising machine, no corporate incentives, and no business model. As a currency, its protocol is immutable and permissionless. It functions without a third party overseeing, tracking, or authenticating — and as we know, third parties so often have interests.

Unlike networks that use algorithms or advertising to make choices for the individual, a cryptocurrency network could run on autonomy and encourage financial freedom. Blockchain technologies have also shown us that they have the potential to function as a framework for equality. When used properly, they may allow communities to implement resourceful tools and ongoing education — indiscriminate of race, gender, background, or beliefs. These are a few positive potentials of decentralization, but they will only work with a willingness to adjust old systems.

Of course, some will speculate that Bitcoin’s network effect is well intentioned but could veer off track, if investors put all their eggs in one basket and bank on the benefits of rare outcomes. It’s also important to maintain awareness of any one entity wielding the biggest slice of the pie to influence others (and note that this entity could be anonymous). We should consider all aspects of networks and their implications, so that we can steer digital currency towards its original aim: globally sound solutions rather than a repetition of prior mistakes.

Aside from Bitcoin, there are lots of healthy, organic networks out there. Families. Friends. Free-of-cost educational programs. Maybe your local yoga studio or book club is a valuable network to you. Community gardens are one of the best examples I can think of when it comes to sharing profit or harvest — a thriving ecosystem (kickstarted by humans) that builds upon itself into the future, benefitting more and more people each year.

It takes conscious effort to pry oneself away from the influence of draining networks. There are social platforms I feel obligated to use for business, and others that help me stay connected to family and friends. By joining, creating, and supporting constructive and autonomous networks, perhaps more of our connections in coming years will be sources of reciprocity and pride.

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