---
# System prepended metadata

title: 'Network Effect, Security, and Adoption in Cryptocurrency Value: An Analogous Study with Black Holes'

---

A given cryptocurrency can be seen as a window to the underlying decentralized protocol logic in a similar way that the surface area of a black hole can be seen as a window to the underlying mass and gravity. Just like the surface area `A` of a black hole is proportional to its mass `M` (A ∝ M), the value `V` of a cryptocurrency is directly tied to the underlying protocol's network effect `NE`, security `S`, and adoption `A` (V ∝ NE * S * A).

```markdown
A ∝ M
V ∝ NE * S * A
```

As more users adopt and use the cryptocurrency, the network effect grows, similar to how the mass of a black hole increases and expands its event horizon. The event horizon `EH` of a black hole is the point beyond which nothing, not even light, can escape the gravitational pull of the black hole, mathematically described as EH = 2GM/c². Similarly, the adoption `A` and network effect `NE` of a cryptocurrency create an economic singularity where the network effect becomes self-reinforcing, making it increasingly difficult for competing protocols to gain traction `T`, mathematically described as T = 1/(NE * A).

```markdown
EH = 2GM/c²
T = 1/(NE * A)
```

Furthermore, just like the surface area `A` of a sphere can be used to calculate its volume `V` using the formula V = 4/3πr³, the value `Vc` of a cryptocurrency can be used to infer the underlying value and logic of the decentralized protocol. This is because the value of a cryptocurrency is derived from its utility `U` within the protocol, which is directly tied to the logic and design of the protocol's underlying smart contract code, mathematically described as Vc = U * log(NE).

```markdown
V = 4/3πr³
Vc = U * log(NE)
```

In summary, the value of a cryptocurrency can be seen as a window to the underlying decentralized protocol logic, much like the surface area of a black hole or sphere can reveal underlying physical properties. The network effect and adoption of the cryptocurrency create an economic singularity similar to the event horizon of a black hole, and the value of the cryptocurrency reflects the underlying value and logic of the protocol.

