What is Metcalfe Law?
Metcalfe's Law is a concept used in computer networks and telecommunications to represent the value of a network. Metcalfe's Law states that the impact of a network is the square of the number of nodes on the network. If a network z. B. has 10 nodes, its own value is 100 (10 * 10). The end nodes can be computers, servers and / or connecting users.
Metcalfe Law was conceived by George Gilder but is attributed to Robert Metcalfe, co-inventor of Ethernet (1980). It speaks for both the growth in the number of connections and the value. Given that the Internet as we know it today wasn't there when the law was drafted, it spoke more about the value of devices in general. For example, having a single fax machine useless. If there are two fax machines, you can communicate with another person, but if there are millions, the machine has some value.
Over time, Metcalfe's Law has been linked to the substantial growth of the Internet and how it worked in accordance with Moore's Law. The concept is similar to the business concept of a "network effect" in that the value of a network provides both value and a competitive advantage. For example, eBay might or might not have had the best auction website, but they clearly had the most users. Because this is so difficult to replicate, the power of the network has displaced other competition.