This seminar paper examines and defines digital assets and builds a taxonomy that categorizes these assets.
Therefore, it also explains, besides digital assets, belonging terms such as blockchain and tokenization. Through all the characteristics that arise, it can classify the objects within dimensions by using the Nickerson method. It describes in detail all required steps that are needed in seven iterations.
To present the result more clearly, a cluster analysis is performed. The final taxonomy grants users’ access to reliable and meaningful data, to categorize digital assets themselves, or to gather desired information. In addition, the paper compares the taxonomy with another one to show possible strengths and defects.
Table of Contents
1 Introduction
2 Digital Assets
2.1 Foreword
2.2 Definition
3 Method
4 Application of the research method
5 Taxonomy for finance based digital assets
5.1 Finance
5.2 Technology
5.3 Governance
5.4 Application of the Taxonomy
6. Discussion
7 Conclusion
8 References
Research Objectives and Themes
The seminar paper primary investigates how finance-based digital assets can be effectively differentiated and structured. By applying the Nickerson method to develop a taxonomy, the research aims to fill the gap in organizing the diverse landscape of digital assets into distinct dimensions and identifiable clusters.
- Development of a comprehensive taxonomy for digital assets using iterative research methods.
- Categorization of assets based on finance, technology, and governance parameters.
- Performance of a cluster analysis to identify patterns and anomalies in existing digital assets.
- Assessment of the role and prevalence of Ethereum-based assets and utility tokens in the market.
- Comparison of the developed taxonomy with existing classification models.
Excerpt from the Book
1 Introduction
Progress is human nature. This comes particularly important in the view of the increasing, global digitization. The People´s consciousness is changing – away from the simple trade in physical objects, towards an online-based sales and distribution world. If on the one hand, you have this continuous change, on the other hand, you have the never-changing characteristics of the human being. The urge to maximize benefits (Woll, kein Datum), as well as underlying distrust, play a major role, especially in commerce.
The fear that the counterparty might not deliver the agreed quantity or refuse to pay the agreed amount led to the fact that in the past third parties became indispensable for the settlement of transactions, with the purpose of reducing these risks. By handing over the management of the transaction process to an intermediary or third party, an attempt was made to minimize the trust problem. But this step required some trade-offs (Ibáñez, Hoffman, & Choudhry) On the one hand, there is always the possibility that the intermediary is offline, which means that transactions cannot take place. On the other hand, it may also occur to the third party to use its elevated position to direct transactions to its advantage, such as raising transaction fees. Instead of the term intermediary, they would thus be more in line with the term “gatekeeper“ (Casey & Vigna, 2018). In recent years, technologies that make it possible to decentralize the management and execution of transactions have been gaining momentum. One of the best known is probably the distributed ledger technology "blockchain". (Abanikanda, n.d.)
Summary of Chapters
1 Introduction: This chapter contextualizes the rise of digital assets by discussing the shift in human commerce and the need for decentralized trust mechanisms like blockchain.
2 Digital Assets: The chapter explores the growing significance of digital assets in the financial industry and provides a formal definition of these assets as intangible, binary-formatted financial values.
3 Method: This section details the application of the Nickerson method, an iterative design-oriented approach, used to build a robust and explanatory taxonomy of digital assets.
4 Application of the research method: This chapter outlines the seven-step iterative process and the establishment of meta-characteristics and ending conditions for refining the taxonomy.
5 Taxonomy for finance based digital assets: This chapter presents the final taxonomy, categorized into finance, technology, and governance groups, and discusses the characteristics of the 38 examined objects.
6. Discussion: The discussion reflects on the unique nature of the developed taxonomy, compares it with existing models, and acknowledges the challenges of maintaining such classifications in a fast-moving digital environment.
7 Conclusion: The conclusion summarizes how the taxonomy successfully organizes complex digital assets and provides a foundation for future classification and research.
8 References: A comprehensive list of literary and digital sources utilized throughout the research paper.
Keywords
Digital Assets, Blockchain, Taxonomy, Nickerson Method, Tokenization, Finance, Technology, Governance, Distributed Ledger Technology, Crypto-assets, Cluster analysis, Smart contracts, Utility tokens, Security tokens, Decentralized Finance.
Frequently Asked Questions
What is the core focus of this research paper?
The paper focuses on building a taxonomy for finance-based digital assets to better categorize and differentiate them based on their specific characteristics.
What are the primary thematic areas covered in the taxonomy?
The assets are classified into three main thematic groups: finance, technology, and governance.
What is the main research question of the study?
The central question is: How can finance-based digital assets be differentiated using the design parameters of a taxonomy?
Which scientific method is employed to structure the findings?
The authors utilize the iterative design-oriented taxonomy development method proposed by Nickerson et al. (2013).
What does the main body of the paper address?
The main body documents the seven iterations of the research process, the resulting taxonomy dimensions, and a subsequent cluster analysis of 38 selected digital assets.
Which keywords best characterize this work?
Key terms include Digital Assets, Blockchain, Taxonomy, Tokenization, Distributed Ledger Technology, and Decentralized Finance.
Why did the authors choose to include the characteristic "hybrid" in their taxonomy?
The "hybrid" characteristic was introduced to avoid unnecessary additional iterations and to account for assets that do not fit into single, clean categories, such as assets that both burn and grow supply.
How does the paper categorize "outliers" like the Sand Dollar?
The paper identifies outliers that do not fit the common clustering due to unique factors like central bank issuance or the lack of a traditional blockchain backend.
- Quote paper
- Robert Bansimer (Author), 2021, A Taxonomy of Digital Assets, Munich, GRIN Verlag, https://www.grin.com/document/1318795
