It is not difficult to regulate Bitcoin by treating it as a commodity and applying the rules for commodity trading on the exchanges. The exchanges should also be registered and regulated as a commodity exchange.
First of all a definition must be given to cyber commodity (Bitcoin or Litecoin).
Such definition should read like: A Cyber Commodity (such as Bitcoin) is defined as something with perceived value passing between two parties in a transaction in cyber space or otherwise with total daily trading value in all known trading platforms of not less than one million USD in any business day and the number of transactions being not less than 10,000. A committee under the commodity trading regulatory body should interpret the aforesaid guidelines and determine when a cyber entity should be classified as a commodity for regulation in an exchange.
There will be similar product (like Bitcoin) coming up in future. Before the participants have grown to a significant size and before total monetary value involved is of any significance, there is no need for any regulation because many newly born cyber entities may not live long. Regulating too early is just a waste of money.
For commodity traded outside the exchange between two consented parties, regulation is not necessary. This similar rule should apply to cyber commodity (Bitcoin).
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