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Why can’t there be more than one financial system? Isn’t diversification valuable?
by junofan 4y ago
Why can’t there be more than one financial system? Isn’t diversification valuable?
- majormajor 4y ago"Network effects" seem to be a fairly compelling reason that "two highly correlated and intertangled financial systems" is the most we'll get, not two fully separate ones. As long as people can interact with both easily, they will, and a lot of the risk/rewards will get tied together. Things move up together and down together.
- junofan 4y agoI don’t think fully separate systems is a common goal. Rather, people are building alternatives that make different tradeoffs to the same end. e.g. a DeFi market may have global liquidity, 24/7 operations, but adds exposure to smart contract risks.