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The network externality can be seen in the situation when a buyer invests in a product that becomes valuable to other users as well.
Such effects can be seen on the value of product or service that is determined by the number of users who benefited from it. Like the blockchain investment fund where the users join to create a bandwagon effect.
The services or products offered through such a system become valuable to more people as they join and thus, create a positive network externality. Greater is the overall size of the network, greater is its value.
Alternatively, there can be some products that become less valuable with the increase in several users. There can be conditions where accessibility creates negativity leading to congestion.
For example - Computer commodities ltd and global investment networks transformed the social and economic system due to positive effects but with the increase in demand of the internet, people face traffic congestion and a kind of overdependence on technology has restricted abilities to functions in real situations, creating negative externalities.
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