The K-Y Protocol: The First Protocol for the Regulation of Crypto Currencies (E.G.-Bitcoin)

Abstract

Crypto currencies like Bitcoin are gaining prominence as a medium of exchange. They have several benefits like very low transaction cost, fungibility etc. But Crypto currencies are also identified with their use in crimes, illegal activities and speculation. Part of the reason for their prominence as well as notoriety is the fact that they have no Sovereign Backing whatsoever and also because they are decentralized. To make Crypto currencies acceptable by the people and also curb their misuse, the authors have proposed a protocol containing a set of standards and procedures. By using this procedure, any nation can create its own Sovereign Backed crypto currency. Once EQUATION is achieved, Crypto currencies shall be released to the public for use.

Keywords: bitcoin, block chain, regulated, sovereign backed, crypto currency

JEL Classification: E51, E52, E58, O38, G18, F33