Have you ever heard of the network effect; when an increase in the number of users increases the utility and value of the network as a whole. Facebook is a prime example. Facebook’s most valuable asset is the content and activity generated by its users–a Facebook with only a handful of profiles wouldn’t be very interesting or valuable! Metcalfe’s law, another way to think about user effect, posits that telecommunications networks are worth the square of their nodes. Metcalfe’s law tells us that Facebook users aren’t just valuable for the content they create, but for the number of connections they make with each other too.

Why is the network effect important for us here at Substratum? Because it plays a significant role in the long-term value of our ecosystem. The network effect was a significant driver in the launch of our complementary projects, Amplify, CryptoPay, and SubstratumNode. All three projects can stand on their own, but when combined, they incubate the Substratum ecosystem, increasing the utility and value of the network.

How the Network Effect Plays Out in Substratum

We started Substratum because we genuinely care about building a free and open internet. We’ve always known that Substratum needed a vibrant, engaged community to succeed–and since SubstratumNode’s launch in July 2017, we’ve seen that community grow and thrive. If you run a SubstratumNode on your computer, you’re already part of the network effect that helps this community fight censorship. The more SubstratumNodes operating, the more peer-to-peer paths there are available for internet users looking for decentralized browsing options or website creators looking for independent hosting solutions.

The SubstratumNode user community is the foundation of the Substratum ecosystem. Our other two initiatives, CryptoPay and Amplify, are designed to unlock even more usability in that ecosystem, attracting new kinds of users that contribute to the growth of the Substratum network. Network growth exponentially increases the whole ecosystem’s network effect, which is good news for every member of the Substratum ecosystem–whether they’re a merchant who accepts payment through CryptoPay, a trader on Amplify, or a longtime SubstratumNode operator.

Building the Substratum Network Effect With Amplify

Before Amplify, we added CryptoPay to the Substratum ecosystem. CryptoPay, a payment interface and online wallet service that lets any sites or applications on the Substratum network process cryptocurrency transactions. CryptoPay isn’t just a crypto-based Paypal–it’s a crucial tool for funneling payments to SubstratumNode operators, creating incentives for users to uphold a free and uncensored internet. In short, CryptoPay boosts the collective network effect of the Substratum ecosystem.

And now, we’re adding another platform to the Substratum ecosystem: Amplify. Amplify is a cryptocurrency exchange with a unique hybrid architecture that employs both decentralized exchange features and traits of the more common (and more centralized) distributed exchanges.

In Amplify’s first phase–the “distributed” phase–AMPX utility tokens will help users pay exchange fees. We expect Amplify to attract many new users at this stage not just because these traders will get first access to the Amplify’s decentralized phase in the future, but because Amplify will allow direct fiat-to-cryptocurrency conversions–whether that conversion involves Ethereum, Bitcoin, or altcoins.

One of the major obstacles to the widespread adoption of cryptocurrencies, and particularly to the adoption of platform-based utility tokens such as AMPX or SUB, is the difficulties new users encounter simply acquiring those tokens in the first place. By providing a user-friendly interface for first-time cryptocurrency users to convert their fiat currency into SUB, AMPX, or other altcoins, Amplify will support the growth of altcoin networks everywhere. Amplify allows direct fiat-to-altcoin conversions and has low barriers for participation in the Substratum network–which means more new users and a growing network effect!

And that’s just phase one; phase two will tie the exchange even more deeply to the Substratum community, creating enmeshed user networks that mutually benefit one another. In phase two, Amplify nodes will process and verify transactions made through the Amplify exchange, using the same censor-proof peer-to-peer network Substratum uses to provide decentralized internet access. SubstratumNode operators will also have the option to operate Amplify nodes as well, earning SUB and AMPX simultaneously. Amplify’s Bridgechain protocol creates mirror on-chain and off-chain ledgers, unlocking the benefits of both distributed and decentralized exchanges.

CryptoPay attracted new users to the Substratum ecosystem by offering censorship-proof, decentralized payment protocols. Amplify is doing the same thing with decentralized exchanges, attracting new crypto traders who are tired of the myriad centralization problems posed by traditional brokered exchanges. The two programs share one decentralized peer-to-peer network–which means each new network node drives the network effect and benefits both internet browsers and crypto traders.

Many long-standing Substratum community members signed on to operate a SubstratumNode because they cared about protecting the internet from censorship, corporate influence, and anti-net neutrality legislation. Many of those valued community members will sign on to use payment and crypto exchange options that mirror the decentralized functionality of Substratum internet access, and the network effect ensures that even Substratum users who never open Amplify or CryptoPay will benefit from these platforms in the Substratum ecosystem.

At Substratum, we’ve witnessed the power of the network effect firsthand. Our user community is our most important asset. That’s why we’re excited to add Amplify to our ecosystem. Together, our three projects will unlock new utility in the Substratum ecosystem, bring cryptocurrency and blockchain to a new group of users, and increase the efficacy of the Substratum internet access tool that started it all.