  When network products and services become more valuable as their userbase
grows (network effects), this tendency can become a major determinant of how
they compete with each other in the market and how the market is structured.
Network effects are traditionally linked to high market concentration,
early-mover advantages, and entry barriers, and in the cryptoasset market they
have been used as a valuation tool too. The recent resurgence of Bitcoin has
been partly attributed to network effects too. We study the existence of
network effects in six cryptoassets from their inception to obtain a high-level
overview of the application of network effects in the cryptoasset market. We
show that contrary to the usual implications of network effects, they do not
serve to concentrate the cryptoasset market, nor do they accord any one
cryptoasset a definitive competitive advantage, nor are they consistent enough
to be reliable valuation tools. Therefore, while network effects do occur in
cryptoasset networks, they are not a defining feature of the cryptoasset market
as a whole.
