The Tremendous Network Effect Of Bitcoin
The Network EffectBitcoin was adopted as the sole means of payment into the BungeeBones Network as well as the sole means for the payment of commissions out from the network. There were a number of reasons upon which the decision to do so were based and not least among them was the strength of the Bitcoin Network. Here are a number of articles discussing the Network Effect as it applies to Bitcoin.

Why Bitcoin Will Continue to Grow
The Value of Money is the Value of a Community. Currencies are unusual in that their usefulness as currencies is a result of their demand. The more deals that can potentially be made with one, the better it is. It is only indirectly because of a currency’s inherent properties that it can turn into a good currency.

Marc Andressen On Bitcoin excerpt "Bitcoin is a classic network effect, a positive feedback loop. The more people who use Bitcoin, the more valuable Bitcoin is for everyone who uses it, and the higher the incentive for the next user to start using the technology. Bitcoin shares this network effect property with the telephone system, the web, and popular Internet services like eBay and Facebook. In fact, Bitcoin is a four-sided network effect. There are four constituencies that participate in expanding the value of Bitcoin as a consequence of their own self-interested participation. Those constituencies are (1) consumers who pay with Bitcoin, (2) merchants who accept Bitcoin, (3) “miners” who run the computers that process and validate all the transactions and enable the distributed trust network to exist, and (4) developers and entrepreneurs who are building new products and services with and on top of Bitcoin. All four sides of the network effect are playing a valuable part in expanding the value of the overall system, but the fourth is particularly important.."

 

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