Islam And Bitcoin - Is Bitcoin Halal?
What is Bitcoin? Is Bitcoin halal? Is Bitcoin haram? Everything you'd like to know about Bitcoin in the world of Islam...and more! Welcome toIslam and Bitcoin. The website that intends to be the number one website for all information related to Bitcoin and other digital currencies as it relates to Islam inshallah (God willing). If you've made it to this website then you must have some questions such as, is Bitcoin halal? Is Bitcoin haram? Is Bitcoin mining halal? Is Bitcoin trading halal? Is investing in Bitcoin halal? Is cryptocurrency halal? Is Bitcoin legal in Saudi Arabia? Inshallah we will explore these issues and more as the goal ofIslamandBitcoinis to make the understanding of Bitcoin and cryptocurrency easy for its audience and to also serve as a hub for Muslims (scholars and everyday Muslims) who want to learn more about Bitcoin and the technology behind it even beyond the basics of halal and haram. So, if you would like to learn more then please do check out our blog where you will find articles and videos related to Bitcoin and definitely dont forget to check out the official Islam and BitcoinPodcast Series ; where we will, inshallah, deliver engaging dialogue with some prominent people involved with Bitcoin and other digital currencies as well as explore how this new technology could potentially benefit humanity and the world at large. I believe that Bitcoin, and cryptocurrency as whole, has the potential to be of wonderful benefit to humanity and the understanding of Bitcoin by the average non-technical person is of the utmost importance if humanity is to ever truly benefit from this technology. Whether Bitcoin is here to stay or fade away like a shooting star is truly only known by Allah, but as a Muslim, I am commanded and encouraged to do good deeds, an Continue reading >>
Is Bitcoin Halal Or Haram?
While Bitcoin has been an active hot topic in the tech industry for over a year, its popularity has spilled over to the mainstream in the past month with even my Careem and Uber drivers extolling the virtues of the blockchain technology. It seems like a lucrative investment if you look at it from a laymans perspective. Going that way, lets say you buy Bitcoin. If it continues on its current trajectory you could double or triple your assets or maybe even more by the end of 2018. You could even become a millionaire by doing nothing. That begs the question, should you buy Bitcoin? Is it permissible in Islam? We conducted a poll on our website asking the readers about this. Here are the results: Lets take a closer look at Bitcoin with respect to being Halal or Haram. Anything that holds intrinsic value, provided that its value does not shift haphazardly or unpredictably is liable to be used as a currency in Islam. The Holy Prophet (S.A.W) was narrated by HazratUbida b. al-Simit, in Sahih Muslim Kitab-ul-Buyu saying, I heard Allahs Messenger (may peace be upon him) forbidding the sale of gold by gold, and silver by silver, and wheat by wheat, and barley by barley, and dates by dates, and salt by salt, except like for like and equal for equal. As such, any commodity which can be exchanged for something of equal value, without addition of anything, is deemed legal in Islam. Bitcoin can be exchanged for a commodity of given value and is also used in some countries to pay for them. Another aspect that gives it value is that people are willing to buy it. For something to have value, it should be in demand by the people. Think of gemstones or gold. As there is a limited supply of Bitcoin, its value also increases or decreases based on the number of people that buy them. It has a Continue reading >>
Is Bitcoin Halal Or Haram? The Big Question In Muslim Countries
A basic understanding of Sharia-compliant finance Sharia doesnt allow the use of Riba (debt) based currency. The Islam law also forbids the charging of interest and the profiting from the interest which is paid out of loans. Islam does not believe money is a commodity but rather a means of exchange. A currency is considered halal (permissible) if it is deflationary in nature. This means that a currency should resist inflation and should command a steady market price. The Islamic law further forbids the use of a currency in haram (illegal) activities such as alcohol, tobacco, pork, and prostitution. A currency which is based on interest and debt is called Fiat. Such a currency is haram. A transaction becomes Fiat if one party to the transaction is bound to gain unfairly more than the other. A transaction should be done on the spot and should be void of any speculation. It is, therefore, haram to trade currencies for speculative purposes. Given that Bitcoin comes about because of a mining process, it can be compared to the olden day currencies which were physically mined. Its circulation in the future is predetermined. Miners get a proportionate value of the currency when they mine it. This serves to authenticate the mining process of the currency. Some people might argue that Bitcoin is not tangible a requirement for any currency under the Sharia law. Even though cryptocurrency has a great potential for growth, one cant deny the fact that it can be verified using the Blockchain Management System(BMS). By extension, this makes it halal. There are some Islamic financial experts and Islam bodies who argue that Bitcoin is not really a currency like the rest. According to the Malaysian Fatwa Council, Bitcoin is not eligible to resemble silver or gold in the cyberspace on the Continue reading >>
Is Bitcoin Halal? How Cryptocurrency Conforms With Islam And Sharia
Is Bitcoin Halal? How Cryptocurrency Conforms with Islam and Sharia How does Islam view Bitcoin and other cryptocurrencies and what are the possibilities for Bitcoin in the Islamic world? Islam is the fastest growing religion in the world, according to Pew Research Center , there are about 1.6 bln Muslims in the world and they make up roughly 23 percent of the worlds population. The majority of the worlds Muslims live in Asia Pacific in countries like Indonesia and India even though traditionally areas of the Middle East and Northern Africa are traditionally associated with Islam. There are unique needs of Muslims when it comes to banking and finance. The Islamic Canonical Law, popularly known as Sharia is based on the teachings of the Quran and prohibits certain activities such as acceptance of specific interest which is considered usury (Riba) or investments in businesses which are contrary to Islamic acceptance for example alcohol. Recent interest in Islamic banking has risen with even the International Monetary Funds executive board holding the first ever discussion on Islamic Banking. Fintech and developments around Blockchain have been taking the world by the storm. The rise of cryptocurrencies like Bitcoin and developments in Blockchain have also touched the Islamic world . In fact, the UAE has already got a Bitcoin exchange by the name of BitOasis and they also offer services like a Bitcoin Wallet. BitOasis also offers services in Qatar, Kuwait, Bahrain and Saudi Arabia. There are also services in the APAC region like Bitcoin Indonesia and Coinbox in Malaysia that offer Bitcoin-related services. According to the paper Bitcoin in Islamic Banking and Finance by Charles W. Evans, The relationship between a distributed, autonomous Blockchain management systems (BMS Continue reading >>
Is Trading Bitcoins/altcoins Halal Or Haram? (sunni View)
Is trading Bitcoins/Altcoins Halal or Haram? (sunni view) I would like to know if trading with Bitcoin and altcoin to make profit is halal? I've searched for the subject but I only found different opinions for currency trading. I think that crypto-currency is little bit different, it's not stored in banks, I can keep it in my machine, and trading purposes I had to store my coins in a website then for every exchange there's some fees, these fees differ from one trading platform to another. The fees may be composed of: Fees for exchange which are imposed by the currency. Fees for the website to keep the trading platform running. This is interesting. I've never heard about it before. I found the bit-coin forum. For FATWA for this, It's better to wait for the appropriate answer Fatemeh Jul 9 '14 at 17:01 Bitcoin is not a traditional note based currency but similar to commodities like gold, silver etc , some would call it a cryptocommodity which is indeed intrinsically accountable and can be proven to exist if required. Other currencies like notes are impossible to trace intrinsically and are essentially contract papers whereas a bitcoin stores the entire transaction history(under the larger bitcoin framework). Islam requires accountability of the commodity spent and you just cant duplicate currency notes to fulfill demand like how govts do with paper currency. Inbuilt Accountability of bitcoin allows the bitcoin commodity to be traceable and thus cant be duplicated on demand. Far from haram I would say that bitcoin is the currency best suited according to the laws of Islam which required the currency to have intrinsic value not just a signed piece of paper whose value can be lost due to various circumstances. The best thing about bitcoin is that it is not controlled by cen Continue reading >>
Bitcoin Halal Or Not ? - Islam
At this time, buying bitcoin is more gambling than it is investing. And that issue is an additional one to consider besides whether the crypto-currency itself is halal. Ethereum has higher potential, esp after 18 December when they will introduce "futures contract", the reason for bitcoin's success ;) buying any cryptocurrency? you just need to sign up and get verified with any broker, you can try quoinex .com you can also join subreddits like /r/ethtrader or /r/Bitcoin Interesting answer also detailed about the subject. He's said Haram cause it's virtual but also the money we use today are virtual.You pay by card you get payed in your bank card, so no again physical contact with "money". Bitcoin and other Cryptocurrencies are permissible because there is nothing found in them which necessitates they are impermissible. What happens if I am mining bitcoins? There's no work involved on my part, it's "money" out of "nothing." The claim that they are digital assets and are thus exempt from the rules of Riba is a weak claim in my opinion, based on the nature and function of these assets. If I buy a coin today for let's say $15,000, then sell it tomorrow for let's say $18,000. How would we explain the $3,000 gain, if it's not riba? What happens if I am mining bitcoins? There's no work involved on my part, it's "money" out of "nothing." Not correct. Mining equipment and electricity costs are very high. Its an investment and your investment brings you a little extra money. If I buy a coin today for let's say $15,000, then sell it tomorrow for let's say $18,000. How would we explain the $3,000 gain, if it's not riba? Its trade not riba. You are buying at market price and theb selling at market price. Cost of goods is influenced by d3mand and supply. If you buy lentils at 2000 U Continue reading >>
Sharia Law And Bitcoins Fatwa
As the title of this post subtly indicates when I say a group. I am referring to an estimated 1.6 billion Muslims of the world, or 23% of the world's population according to the December 2012 Global Religious Landscape report from the Pew Research Centers Forum on Religion & Public Life. Due to the core belief of Muslims that Islam is a complete code for life, its followers look up to the teachings and laws of Sharia and live their lives accordingly. As stated by the Library of Congress, "In its Islamic context, Sharia may be defined as the totality of Gods commands and exhortations, intended to regulate all aspects of human conduct and guide believers on the path of eternal salvation". The primary sources of Shariah are the Koran and the Hadith. Muslims generally believe that Koran is the word of God transmitted to Prophet Muhammad, and Hadith is the collection consisting of the deeds and sayings of Muhammad. These texts hold the same value in expressing the divine will of God. If a Muslim today wants to invest, or be involved in Bitcoin, the information available to them mainly depends on the route they take. A practicing Muslim with an inquiring mind may have to go through several loops, to find a reasonable argument, before reaching a conclusion. An argument, no matter how balanced, has to have its origins fromin the proposed Islamic Finance Model as described by the Shar'iah. Considering the fact that there is no hierarchy in Islam, common law rulings and scholarly interpretations known as 'Fatwas' act an interpretation of the Sharia and its text. There's a Fatwa on Bitcoin which you can read here . Dr Monzer Kahf explains his understanding of Bitcoin from the Sharia angle, in the first paragraph of the Fatwa. He argues, "Like any other currency it is money within Continue reading >>
Is Bitcoin Halal? What Scholars Say And Where It Stands In Islamic Banking And Finance
Is money is money is money? While this appears like a troll-like, joke question, the answer is a bit more complex than that. Religion can play a big part in the governance of financial systems. Islam in particular has very clear guidelines based on Islamic principles. As Bitcoin enters mainstream adoption across the globe, one begs the question: Is Bitcoin complementary with Islamic banking and finance? Islam requires any currency to hold intrinsic value before it can be considered permissible. In other words, money that is created out of thin air is not (halal) money, because it is not backed up by any commodity of actual value. In case you are new to the financial sector, know this: it is common, a standard practice, even, for financial institutions to create money without intrinsic value. In order to decide whether bitcoin holds intrinsic value, one must look at its qualities in comparison to other types of commodities which Islam permits. Two great examples are gold and silver. During the course of history, these precious metals have been used as currencies, in the form of the gold dinar and the silver dirham . Some countries around the world still accept it as legal tender. While bitcoin can only exist electronically, it shares a lot of qualities with gold and silver. Both are mined, scarce, value dictated by supply and demand, and can be used as currency on its own. This handy infographic illustrated this point. Can you call bitcoin money? Well, bitcoin is used as a medium of exchange - you can use it to pay for products and services. Bitcoin is also an economic standard and measurement of value - the price fluctuates based on market supply and demand. For all intents and purposes, bitcoin is certainly used as money. However, Mohammad Mahmoud Ibrahim Tayel argued Continue reading >>
Is Bitcoin Halal Or Haram?
Can Super Bitcoin Hard Fork make Bitcoin Great again? A few years ago we tried to answer whether Forex is halal or haram , talking to scholars and traders. Now, cryptocurrency trend is growing, while some people comment that cryptocurrencies are not acceptable in an Islamic context. So, Ive decided to write a small article trying to answer the question of : Is Bitcoin Halal or Haram? 13 December, AtoZForex It is not a surprise that everyday people are getting interested in cryptocurrencymania as the price of Bitcoin and Ethereum keep of making new highs. However, is investing Bitcoin halal or haram? Can you say that Islamic laws allow cryptocurrency investment? Or just simply, is Bitcoin Halal or Haram? Bitcoin Halal or Haram discussion in Islam Plato once said Human behavior flows from three main sources: desire, emotion and knowledge Of course, the Sharia Law in Islam vetoes certain activities, for example, acceptance of specific types of interest. Especially, those of investment types that are not according to Islamic banking principles. This brings attention to Bitcoin and cryptocurrency investment as well. Is Bitcoin and cryptocurrency investment sharia law compliant? Is my Bitcoin halal or haram? These are the questions puzzling many of the Islamic faith followers. Before answering this question, I want to look into what bitcoin is. Wikipedia definition of Bitcoin is as the following: Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator. Many also refer Bitcoin as the Gold of digital era. This is because, like Gold Bitcoin is limited in supply. One the mining cap is hit, there will no longer be any new Bitcoin. What does that mean? Well, supply Continue reading >>
Bitcoin: Beyond Questions Of Halal And Haram
The Problem with Interest: Book Review by Joe Bradford If you want to appreciate how Islam is more than just a religion of technical laws, look at the fuss surrounding Bitcoin. Most folks are obsessed with just one question: IS BITCOIN HALAL?! What do they mean by that? Well, it seems folks arent sure whether it is permissible to invest in something which isnt tangible or real and is effectively some random cyber-creation. From a fiqhi point of view, what is the ruling concerning new forms of artificial money and crypto-currency products to be invested in? The truth of the matter is that this is far more complicated than just whether something being tangible is legally halal or haram. Rather, we have to take many things into account such as values, objectives or indeed the spirit of the law and not just legal letters of the law which is why true scholars arent falling over themselves to rush to a ruling. For example, is it right for Muslims to be involved with artificially created products that fluctuate in value so violently where said fluctuation can be caused by simple true/false news reports of potential changes in future financial regulations so as to create deliriously happy people (those who bought it for pennies) but then also create deliriously depressed people who will buy it now and then experience an artificial crash as big as its artificial rise and lose thousands? Or is it ethical to be involved with a product that is almost exclusively used by criminals and those who want to hide things from public? Are Muslims meant to be people who dabble in the shadows or rather folks on the forefront of industry promoting openness and transparency in all their actions? Also, even though everyone is losing their minds on how amazing block-chain technology is such as w Continue reading >>
Cryptocurrency And Islam
Cryptocurrency is all the rage nowadays so let's see what Islam has to say about it. Islam which is the worlds second-largest religion is also the fastest growing religion in the world. Presently there are approximately 1.6 billion Muslims in the world comprising about 23 percent of the worlds population. Islam offers its own unique banking and finance popularly known as Islamic Banking and Finance. This growing financial system is based on fundamentals which originated from the Holy Quran and ahadith where activities involving riba (interest), gharar (uncertainty) and maysir (gambling) are strictly forbidden. As the Islamic Banking and Finance Industry continues to grow, more innovations will take place, and one of the recent innovations that have taken the world by storm amongst others include the developments around blockchain such as cryptocurrencies. What is Cryptocurrency and what do Islamic scholars think about it? Cryptocurrency is a medium of exchange, created and stored electronically in the blockchain, using encryption techniques to control the creation of monetary units and to verify the transfer of funds. It has no physical form and no central authority or middlemen that control it. Bitcoin is the best known example of cryptocurrency, comprising the bulk of the market share, at 60.8%. Bitcoin is a digital currency that enables payment in a decentralised peer-to-peer (P2P) network that is powered and approved by the consensus of its users. The complete process of how bitcoin works has been outlined below. To understand whether Islam permits the usage of bitcoin, it will be assessed from four angles namely value of money, payment network method, concept of gharar and serving the real economy. For value of money, Islam deliberates on three elements, namely ma Continue reading >>
Can There Be A 'halal' Form Of Bitcoin?
Can there be a halal form of Bitcoin PHOTO: EXPRESS With the increasing demand for Bitcoin and its price increasing by sixfold since the beginning of the year, all sorts of questions are now being raised about the digital. Latest of them is whether it is Halal or not. Madina Kalimullina, adviser on Islamic Economics and Finance of the Russian Muftis Council has started a discussion on creating a halal cryptocurrency. Kalimullina claimed that sharia law has not yet been developed for the usage of Bitcoin; whether it is permissible in Islam or not is yet to be decided. However, she is hopeful that within the next few years, the law will be formalised. Sharia standards do not cover this issue yet, but in the perspective of two or three years they can be developed, Kalimullina said after a conference in Kazan. You may not have noticed, but Bitcoin is creating space in Pakistan Bitcoin, just like other virtual currencies, uses Blockchain technology to record transactions all over the world. Governments have not yet regulated the currency with its blockchain mechanism promising complete secrecy. From close to $800 at the start of the year, a single Bitcoin is now being traded for over $6000 Its presence in the digital space and inability to be physically touched or put in a safe, also makes it more susceptible to technological threats. This inability can also lead to the disparity of whether Bitcoin can be considered a halal form of investment or not. Kalimullina argues that the lack of regulation and the volatility associated with both the form of currency and its unregulated nature begged the question of whether Bitcoin should be approved in Islamic states and communities. Among the main arguments against Bitcoin is a high degree of risk (maisir) and uncertainty (garar), a Continue reading >>
Is Bitcoin Permissible In Islam?
First let's get some misconceptions out of the way. No. BitCoin mining is a cryptographic process that has a finite, well defined and deterministic. It does require a lot of computational power, but there is no luck involved. If it was luck based, then there would be a chance (however small) for your tiny ARM processor to find a BitCoin every now and then. That's not true. Yes they do. As you've noted, mining BitCoin requires a lot of computational power and that of course includes the infrastructure behind it (equipment, time, electricity ... etc). That alone gives it value. Also, the fact that people are willingto buy it gives it value. Think of diamonds. They definitely have value. It's not because they are rare (diamonds are much more prevalent than people are lead to believe), but because the market gives it value. The laws of Islam require halal currency to have intrinsic value, and digital currency seems to fit that bill perfectly. Unlike fiat currency, which is represented by a paper medium susceptible to damage, loss, and theft, Bitcoin has intrinsic value as its worth can not be tampered with through duplication and other illegal means. Additionally, halal currency should be deflationary in nature, which leads to fluctuation in value. The Bitcoin value has gone up over the course of the past seven years, albeit there have been several stumbles along the way. Gold is halal as well, as there is a limit supply available and the prices are anything but stable. One could even go as far as saying how Bitcoin is more halal under the laws of Islam than paper currency will ever be. I am not an Islamic scholar. Yet I am a muslim and earning *HILAL* income is as important to me as anyone else in Islam. I started doing some research on this several months ago, and came t Continue reading >>
Digital Currency Bitcoin 'forbidden In Islam', Rules Saudi Cleric
Digital currency bitcoin 'forbidden in Islam', rules Saudi cleric Bitcoin's use on darknet marketplaces and among cybercriminals has raised suspicions [Getty] Date of publication: 6 December, 2017 A popular Saudi cleric has ruled that cryptocurrencies are prohibited under Islamic law because they are "ambiguous" and provide anonymity to criminals. A popular Saudi cleric has ruled that cryptocurrencies are prohibited under Islamic law because they are "ambiguous" and provide anonymity to criminals. Assim al-Hakeem made the religious edict this week on his programme Ask Zaad, as bitcoin prices shot above $10,000 for the first time. "We know that bitcoins remain anonymous when you deal with it which means that it's an open gate for money laundering, drug money and haram (forbidden) money," Hakeem said. "There is a lot of ambiguity, if I have dollars and you have euros and we want to exchange this is permissible in Islam with the condition that it is hand-to-hand in virtual currencies you don't have this," he added. The cleric's ruling comes after Turkey's top religious body also decreed that bitcoins were incompatible with Islam because their value is "open to speculation" and they can be used in "illegal activities". Bitcoin's use on darknet marketplaces, where users can exchange the cryptocurrency for goods like drugs and guns, and among cybercriminals has raised suspicions about the virtual money. A bitcoin was worth about $1,000 at the start of the year, but is now more than $11,000. The rise in the price of bitcoin and other virtual currencies this year has divided the financial community on its merits and whether the value might come crashing back down. Bitcoin was created about a decade ago as an alternative to government-issued currencies. Transactions allow anony Continue reading >>
Bitcoin And Sharia Compliance: How Halal Is Bitcoin?
Bitcoin and Sharia Compliance: How Halal is Bitcoin? As global bitcoin adoption is rising and bitcoin usage is expanding into markets such as the Middle East, Indonesia, Malaysia and other predominantly Muslim regions, the question of whether the cryptocurrency is compliant with the pillars of Islamic finance becomes more and more topical. Sharia law requires a currency to have intrinsic value . What that means is that a currency must have a use as opposed to being purely considered valuable because people say it is. The value of a currency must be backed up by an asset or tied to a commodity of actual value, and can also be shown by the difficulty of attaining it. Examples of currencies that are Sharia compliant are the gold Dinar and the silver Dirham. Sharia law also requires a currency to be tangible or to have evidence of existence. Islam forbids the use of a currency that is tied to debt which is referred to as Riba. Islam also prohibits the charging and profiting from interest paid out on loans; this is because Islam does not believe that money is a commodity, rather it is a means of exchange. With this reasoning in mind, one cannot use money to buy more money. Also, interest is deemed unfair because it automatically favors lender since the lender will get back his money regardless of whether the business endeavor of the debtor was successful or not. This is in itself contrary to another pillar of Sharia compliance. Sharia-compliant finance also requires the sharing of profit and losses. This means that partners involved in a business endeavor together must share both the profits and losses at a predetermined and pre-agreed upon rate. Lastly, for a currency to be halal (permissible), it must be deflationary in nature meaning that it is resistant to inflation and Continue reading >>