Network effect refers to the phenomenon where a product or service becomes more valuable as more people use it. In the case of cryptocurrencies, this means that as more users adopt a particular coin or token, its utility and overall value increase.A classic example is Bitcoin, which gained prominence as more individuals began to buy and hold it. As its user base expanded, so did its acceptance in various payment systems, exchanges, and as a store of value. This cycle can lead to exponential growth, attracting even more users who perceive greater legitimacy and demand.Moreover, network effect can enhance security. With more participants validating transactions, the network becomes harder to attack. Conversely, if a cryptocurrency fails to gain traction, it may lose value and utility, as fewer people are interested in using or supporting it. Thus, securing a strong and active user base is crucial for the success of any cryptocurrency.