Key takeaways

• Newer blockchains have higher capacity, even if these come at the cost of greater centralisation and weaker security. Differences in the design also preclude blockchain interoperability.

• Limited scalability and a lack of interoperability not only prevent network effects from taking root, but a system of parallel blockchains also adds to governance and safety risks.

• Despite fragmentation, cryptocurrencies on different blockchains exhibit strong price co-movements, as they often share the same investor base, and growth is sustained by speculative buying of coins.