Kiffmeister’s #Fintech Daily Digest (08/12/2020)

Token- or Account-Based? A Digital Currency Can Be Both

Classifications can be a powerful tool to organize and communicate ideas. The main allure of distinguishing between account-based and token-based is to highlight a defining feature of certain new, emerging forms of digital currency. But if a digital currency can be both token-based and account-based, then the classification loses its power to meaningfully distinguish between new and existing methods of digital payments. Furthermore, it may slow down progress in understanding intrinsic differences between the growing set of digital payment options and technologies. Future classifications could modify the definitions of the terms account-based and token-based to more clearly distinguish them. In the meantime, perhaps these terms should be retired to avoid further confusion. 

One thought on “Kiffmeister’s #Fintech Daily Digest (08/12/2020)

  1. Couldn’t agree more John. At the early conceptual level the terms are useful to get a handle on the possibilities. When designing, they present a false dichotomy and constraint.

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