Metcalfe's Law states that the value of a network increases with the square of the number of its users. This means that as more people join a network, the potential connections and interactions grow exponentially. For example, a network with 10 users can create 45 unique connections, while a network with 100 users can create 4,950 connections. This principle is often applied to social networks like Facebook or communication platforms like WhatsApp. The law highlights the importance of user participation in enhancing the overall utility and effectiveness of a network, making it more valuable as it expands.