What is BIXBCOIN?

Bixbcoin (BIXB) is an experimental digital currency that enables instant payments to anyone, anywhere in the world. Bixbcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network. Bixbcoin Core is the name of open source software that enables the use of this currency.

Network Effect and its Impacts on Digital Currencies

Network effect occurs when a product becomes more valuable as a result of more frequent use by people.
Network effect is very important when it comes to digital currencies.

Investments and blockchains organize users and, therefore, the greater is the number of users in a network, the more capable that network will be in terms of providing features and applications as services provided to users.

What determines the success of a digital currency project in becoming a top project in a particular area of the market?

One may consider the fact that, in the long run, the market should move toward the best solutions. Although it is not that simple and a large number of factors are involved here.

While developers may offer innovations and develop new technologies, they may fail to attract attention and acceptability in the absence of a good market when such offers are made.

In some cases, projects with less advanced technology take over a larger share of the market because they become available in the right time.

Here, the network effect comes to play an essential role. Network effect is an economic effect that defines a product or service whose value increases with the number of users.

Where a network effect exists, a service or product becomes more valuable every time a new user joins the network. As a result, value is added to the network as more new users are encouraged to join it.

Modern examples of network effect exist for different products. The most obvious form of these products is a social network where users tend to join services used by their friends in the social networks they shared in the past.

This prompts users to join similar platforms, leading to dominance by a limited number of services.

A new company planning to create a new social network will face a big challenge in gaining public acceptance because the network effect created by leading companies in the market gives them competitive advantage.

Another good example of network effect is internet ride-hailing services.

In this type of business, service providers like Uber or Lyft have managed to take over their competitors by relying on an old trick known as referral code to encourage current users to bring in new users and win free rides.

Competition or network effect can go a long way in introducing startup brands to users, leading to success for that business. Network effects can be very important when it comes to blockchains and digital currencies.

BIXBCOIN, a newly founded digital currency, is one such digital currency that relied on this mechanism to win a large number of users over a very short time.

Once it entered the world of cryptocurrencies, this digital currency, represented by the symbol BIXB, built several new platforms that used network effect to attract many users, acceptably increase the number of transactions made in this currency, and make use of this trick in its own advantage which also benefited its network.

This operational model will soon win a place in digital currency companies while, of course, business who used this model early on will undoubtedly take the lead and take over their competitors in their respective markets.

Network effects are also important in decentralized finance, commonly referred to as De-Fi.

A product, service, or even a smart contract gaining significant advantage will be hard to overcome by other projects.

Although De-Fi is still in its infancy, this time BIXBCOIN has incorporated this mechanism into its De-Fi platform known as LOANYPTO to take over its competitors and become a pioneer in this area.

However, many people have acknowledged that no single produce has achieved a network effect that is significant enough to make that product an absolute winner.

Final Thoughts About BIXBCOIN

Network effects are present in various economic areas, including digital currencies. The idea behind network effect is that a network becomes more valuable when new users join it. Designers of blockchain networks and digital currencies can make the best of their work by studying what mechanisms can create and grow network effect. By using and involving network effects into designing these networks, they can speed up the process of growth of new coins and token.