Developing a Cryptocurrency Assessment Framework: Function over Form
The rise of cryptocurrency as a new sui generis asset class creates a need for a new classification scheme to cover the wide range of functionality for which tokens can be used. By differentiating tokens based on their functional attributes, cryptocurrency tokens can be categorised into crypto-trans...
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University Library System, University of Pittsburgh
2018-07-01
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doaj-23f537bbb93c4e0f9a30947b3e2f78b12020-11-25T00:34:59ZengUniversity Library System, University of PittsburghLedger2379-59802018-07-013010.5195/ledger.2018.12121Developing a Cryptocurrency Assessment Framework: Function over FormAndrew Burnie0James Burnie1Andrew Henderson2UCL and The Alan Turing InstituteEversheds Sutherland (International) LLPEversheds Sutherland (International) LLPThe rise of cryptocurrency as a new sui generis asset class creates a need for a new classification scheme to cover the wide range of functionality for which tokens can be used. By differentiating tokens based on their functional attributes, cryptocurrency tokens can be categorised into crypto-transaction tokens (which act as a cash substitute); crypto-fuel tokens (which underpin generic blockchain applications); and crypto-voucher tokens (which can be exchanged for a predefined asset). This classification is applied to identify important issues when considering whether to participate in a cryptocurrency system, such as the impact of potential forks, token supply expectations and the level of dependence on a few operators (entity-dependence). For crypto-transaction tokens (and crypto-fuel tokens if used in a similar or overlapping role) it shows the importance of the token being seen as a “better” form of money. For crypto-fuel tokens, the popularity of blockchain applications and the utility of the crypto-fuel system in application development is vital. For crypto-voucher tokens, the value of the underlying asset, the token’s exchangeability for that asset and the importance of a digital representation should be considered by participants. The interplay between fundamentals and speculation as drivers of price is considered. An erratum to this article has been published at as DOI: https://doi.org/10.5195/ledger.2018.151.https://ledgerjournal.org/ojs/index.php/ledger/article/view/121ClassificationAltcoinsEthereumTokens |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Andrew Burnie James Burnie Andrew Henderson |
spellingShingle |
Andrew Burnie James Burnie Andrew Henderson Developing a Cryptocurrency Assessment Framework: Function over Form Ledger Classification Altcoins Ethereum Tokens |
author_facet |
Andrew Burnie James Burnie Andrew Henderson |
author_sort |
Andrew Burnie |
title |
Developing a Cryptocurrency Assessment Framework: Function over Form |
title_short |
Developing a Cryptocurrency Assessment Framework: Function over Form |
title_full |
Developing a Cryptocurrency Assessment Framework: Function over Form |
title_fullStr |
Developing a Cryptocurrency Assessment Framework: Function over Form |
title_full_unstemmed |
Developing a Cryptocurrency Assessment Framework: Function over Form |
title_sort |
developing a cryptocurrency assessment framework: function over form |
publisher |
University Library System, University of Pittsburgh |
series |
Ledger |
issn |
2379-5980 |
publishDate |
2018-07-01 |
description |
The rise of cryptocurrency as a new sui generis asset class creates a need for a new classification scheme to cover the wide range of functionality for which tokens can be used. By differentiating tokens based on their functional attributes, cryptocurrency tokens can be categorised into crypto-transaction tokens (which act as a cash substitute); crypto-fuel tokens (which underpin generic blockchain applications); and crypto-voucher tokens (which can be exchanged for a predefined asset). This classification is applied to identify important issues when considering whether to participate in a cryptocurrency system, such as the impact of potential forks, token supply expectations and the level of dependence on a few operators (entity-dependence). For crypto-transaction tokens (and crypto-fuel tokens if used in a similar or overlapping role) it shows the importance of the token being seen as a “better” form of money. For crypto-fuel tokens, the popularity of blockchain applications and the utility of the crypto-fuel system in application development is vital. For crypto-voucher tokens, the value of the underlying asset, the token’s exchangeability for that asset and the importance of a digital representation should be considered by participants. The interplay between fundamentals and speculation as drivers of price is considered.
An erratum to this article has been published at as DOI: https://doi.org/10.5195/ledger.2018.151. |
topic |
Classification Altcoins Ethereum Tokens |
url |
https://ledgerjournal.org/ojs/index.php/ledger/article/view/121 |
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