How would I explain it to my grandma? Metcalfe's Law

Imagine, dear Grandma, you have a telephone.
How useful is your telephone if you are the only person who has one? Exactly: not at all. You can’t call anyone.

But as soon as your friend Hannelore also has a telephone, you can talk to each other. And if your neighbor, the baker, or your children also get phones, your phone becomes more useful with every new person who joins.
You can call Hannelore, your children can call you, and everyone can talk to each other. Every new person with a phone makes your phone more valuable to you.

This is exactly what Metcalfe’s Law describes:

The value of a network doesn’t just increase with the number of participants, it grows much faster, because everyone can potentially connect with everyone else.

So, what does this have to do with blockchain?

Think of a blockchain as a giant digital network where people can exchange value. Just like you use your phone to talk, blockchain lets people send money, sign contracts, or share information securely.

At first, when only a few people use a blockchain, it doesn’t add much value. But the more people use it, the more valuable it becomes for everyone:

• More people means more opportunities to send and receive value.
• More users mean more ideas and innovation within the network.
• Trust in the network grows as more people use it.

This is why Bitcoin and Ethereum become more valuable as more people use and trust these networks – not just because of the underlying technology, but because of the people using them.

An everyday example: The village fair

Imagine your village hosts an annual fair.
At first, only five people show up – boring.
If 50 people come, it gets interesting: there is music, conversations, and food stalls.
If 500 people come, it becomes exciting: there are performances, children play together, and there is a vibrant atmosphere.
Each additional person makes the fair more enjoyable for everyone else.

This is exactly how it works with blockchain networks: The more people join, the more useful and valuable the network becomes for everyone.

Why is this important?

Metcalfe’s Law explains why blockchain projects may seem unimportant at first, but as more people start using them, their value can grow exponentially.
It shows why collaboration, adoption, and trust are critical for blockchain networks to create real value – it is not just about technology, it’s about participation.

A coffee table summary

Blockchain is like a village fair or a telephone network:
The more people participate, the more valuable it becomes for everyone.

That is the essence of Metcalfe’s Law and helps explain why blockchain networks have the potential to change our world – as long as enough people join and use them.