Is Bitcoin permissible or prohibited?

Many Muslims would like to invest in Bitcoin and other cryptocurrencies, which are transforming the financial world, or investigate the possibility of utilizing them as a new means of trading value. Since the inception of Bitcoin in 2009, various issues about cryptocurrencies and Islam have arisen: Is cryptocurrency considered halal？ Is cryptocurrency considered haram？ In a Shariah examination, is Bitcoin halal or haram？ Is it haram to mine or trade Bitcoin？ Is investing in Bitcoin halal？ Is Bitcoin mining permissible？

Is Bitcoin permissible or prohibited？ A Shariah Examination

Whether bitcoin is haram or halal is a point of contention for many Muslims. For obvious reasons, the Quran has no particular writings on cryptocurrency, making it a divisive issue. The major source of Islamic worry about Bitcoin is its periods of extraordinary growth and the extremely high volatility that has been experienced in cryptocurrencies in recent years.

Is Bitcoin considered halal？

The majority of Bitcoin usage have been declared to be halal by academic analyses. Islamic law lays specific criteria for making halal investments. Money obtained by haram means, such as extortion, bribery, or profiteering, is haram. There is no official statement on whether or not Muslims should invest in Bitcoin. Several Islamic experts, on the other hand, have offered their interpretations of Islamic canonical law and how it relates to Bitcoin.

Mufti Muhammad Abu-Bakar, a former Shariah adviser, claimed that all currencies are speculative and susceptible to shifting supply and demand. These currencies are shariah-compliant, thus Bitcoin should be as well.When it comes to Bitcoin being used for criminal purposes, Mufti Muhammad Abu-Bakar believes that this should not automatically make it haram. Mufti Faraz Adam, an Islamic financial and fintech specialist, emphasized emphatically that Bitcoin is fair, atomic, and transparent. He was hopeful that Sharia law would not prevent it.

Is Bitcoin considered haram？

Although the majority of Bitcoin usage are halal, there are certain haram methods to utilize Bitcoin. To begin with, there is gambling, which is explicitly prohibited by Sharia law. As a result, gambling with Bitcoin is also prohibited. Some people regard cryptocurrency trading as gambling since traders frequently successfully anticipate short-term market changes, which is arguably gambling. Another feature of Bitcoin that may be seen as haram is its use with margin and decentralized finance lending. Muslims would be unable to take out a loan or charge interest using most decentralized finance Bitcoin protocols because earning or paying interest is deemed 'riba.'

Because of its decentralization and lack of physical support, most scholars consider Bitcoin haram, according to Shaykh Haitham al-Haddad. In his perspective, it is not authorized as a genuine form of currency, making it haram. Jamal Aezaz, the creator of Coinfluencers, determines if a given usage of Bitcoin is halal or haram by asking whether doing the same thing with fiat monies is acceptable under Shariah law. If something is legal with fiat cash, it should be legal with Bitcoin as well.

Is Bitcoin mining considered haram or permissible？

Successful Bitcoin mining necessitates the fulfillment of two fundamental prerequisites. The first is to work as a blockchain auditor to guarantee that payments are made correctly and that no double counting occurs. The second goal is to be the first to find the next block in the 64-digit hexadecimal number of the blockchain. This is largely accomplished by brute force computing, with the computer making educated guesses until it gets it right.

The first part of bitcoin mining is acceptable in a straightforward manner, making it appear to be halal. The second is a little more complicated, but it's still halal because the requisite luck is offset by three considerations. These are the factors:

l You must be a service-oriented auditor.

l The mathematical computations necessary for the block's finding eliminate the element of chance.

l Because mining difficulty and predictability are both constant, you can rapidly compute the code to get some free Bitcoin.

Bitcoin and other cryptocurrencies have yet to be definitively established as halal or haram in Islam by religious authorities. Religious academics are still studying Bitcoin's many qualities in order to come up with a definitive response to this topic. It may be noted that the use of Bitcoin for halal investing has been widely and effectively discussed under Shariah law. Because bitcoin mining does not include haram actions, it is certainly halal under Islamic law. Because blockchain is open, fair, and transparent, it contains most of the Islamic conditions for a halal transaction, such as the recording of all transactions and the availability of witnesses. Anyone considering investing in Bitcoin as a Muslim should conduct their own study into the currency and how to use it in halal manner. To summarize, Bitcoin mining and investment appear to be halal. Bitcoin trading, gambling, and decentralized finance lending are all considered haram by Shariah law and so prohibited.