Assalaamu Aleikum. Welcome to part 4 in our Is Bitcoin Halal Series. Have you wondered whether investing in Bitcoin is halal or haram? Are you looking at certain websites wondering whether or not these websites are legitimate or worth investing in? Well, if these are your questions, then you’ve come to the right place. ​

But let’s answer the most important question you are asking. Is investing in Bitcoin halal or haram?

The simple answer is, yes. It is halal to invest in Bitcoin. Some scholars see Bitcoin as a currency while other scholars see it as an asset. There are scholars who also say that if you are buying bitcoin as a store of value in order to protect your wealth, then this is permissible but activities such as margin trading are considered haram.

Keep in mind that this answer is based on scholars whose opinion is that bitcoin is not haram.

Please watch the video below or read the video transcript below to delve deeper into this topic as we review the following websites and cryptocurrency, StartMiner, BTCProMiner, BitMiner, OneGram, Binance, Poloniex, ShapeShift and Bitconnect.

Video Transcript

As-salamu alaykum! And thank you for joining me for today’s blogpost here on the Islam and Bitcoin website, the Islam and Bitcoin project. Today is going to be blogpost number four in our four-part series. I know it has been a while but we are finally here, we have arrived, part four.

And part four, today, we’re going to talk about investing. Is investing in bitcoin halal or haram? So, that’s what we’re going to cover today.

Now, as I always say when I make these blogposts, we always want to– I always want to make it clear that this is not meant to be a fatwa (non-binding legal opinion on Islamic law). I’m not giving a fatwa. This isn’t meant to be a fatwa series.

I’m not a sheikh. I’m not a big time alim (person of knowledge. I’m not some big-time scholar. I’m simply a student of knowledge, sharing with you what I have learned with the hopes of benefiting myself first and foremost and all of us Alhamdulillah.

And also, even though I share with you this information, there may be others– you may find that there are other opinions out there from other scholars. So, again, these scholars who I take my knowledge from, they may have one line of thinking, one way of thinking in regards to Bitcoin, and other scholars may have another.

And differences amongst the ulama, the fuqaha, is totally acceptable and totally fine. So, we’re going to roll with that. So, let’s hop right into it today talking about investing in bitcoin.

Bitcoin is Speculation 

All right. So, let’s talk about investing in bitcoin. Now, some people would say, “Oh, don’t invest in bitcoin. It’s nothing but speculation and speculation is haram.”  Well, the truth of the matter is, is bitcoin highly speculative? The answer is yes.

But can we say that speculation in and of itself is haram? The answer is no, we cannot, at least according to my teacher who I’ve studied with. And he has said that speculation is actually a normal part of investing, meaning that there is some percentage of the unknown when someone invests.

So, for example, if you were to own a restaurant, a taxi service, you cannot say with 100% certainty that you will always have clientele that will use your taxi service, that will eat at your restaurant to guarantee that you make a profit. You don’t know. It’s unknown.

It’s the same as if you were to purchase a number of homes and you wanted to use them as apartment rentals. You cannot say with certainty that you will always have tenants that you will have inside your apartment so you will always make a profit.

Again, that is unknown. There is some form of speculation, right? So, speculation, in and of itself is not haram.

Now, what my teacher said is disliked is when someone does not take the time to do the proper research to what it is they are investing in. So, we see there’s a lot of people will hop into bitcoin, they just see the price going up and up and up and they think, “I got to get in there and make some quick money before it gets to $10,000 per bitcoin.” And they do no research whatsoever in regards to bitcoin, in regards to what they’re investing in.

This is disliked. So, my teacher is like, you know, when you invest in something, you should do your research and then tie your camel, meaning you do your part and then put your tawakkul, tawakkul meaning trust in Allah.

Questions to Ask Before Investing in Bitcoin

So, some questions that you may want to ask, you know, I wrote some down here. You want to ask yourself, when you’re looking to invest in bitcoin, who is working on the project? Who is the core development team of that project?

We know that Bitcoin has already gone through a fork and split. So, now there are two different bitcoin cryptocurrencies out there and obviously there is a number of other alt currencies as well.

So, you want to ask yourself, who is the core development team and what is the vision or the path they are taking this cryptocurrency on? What’s the path it’s going down? Is this something that you’re in agreement with?

Do you think that this is something that is sustainable? It’s going to work? Questions you want to ask yourself.

Another question you want to ask yourself is what are the pros and cons of holding on to this digital currency? What are the pros and cons of Bitcoin? What do you think they are?

Do some research, Go out there and Google- What are the pros and cons of holding on to bitcoin? What is the future? What do we think that the future of Bitcoin may be? Again, questions that you want to ask yourself before you invest.

Some other questions that you want to look into are– is or I should say rather, what are the laws of the land as it relates to Bitcoin where I live? Is it legal? Is it illegal? These are things that you should ask yourself.

Another question you should ask yourself is, am I putting myself in harm, in harm’s way financially by investing in bitcoin? You have some people out there who will take their family savings and invest it in bitcoin. Is that a smart thing to do? Only you and– you and your family can come up with an answer to that.

But you want to be mindful of that. There are some people who, “I’m going all in. I’m taking my life savings, my family’s savings, and I’m putting it into bitcoin.” That might not be the wisest thing to do. Might not be the wisest thing to do.

You may also want to ask yourself, am I investing in something that is a scam? And what I mean by that is there are certain websites that some of my brothers and sisters out there that you’re investing in, these websites that are related to Bitcoin and you’re asking me questions, “brother, is this website halal or haram?” Right?

So, you want to make sure that you are doing research to make sure that you’re not investing in something that is a scam and that leads us to the next, the segment of this blogpost, this video.

I want to go ahead and take a look at some websites that some of you are sending me to talk about whether or not these websites are legitimate or not to put your money in.

But just as a quick summarization, to summarize really quickly, speculation in and of itself, it’s not haram. It’s a normal part of investing. And when it comes to investing, from what my teacher says, you– what is disliked is when you invest with no knowledge. So, you want to ask yourself questions. You ask yourself questions. You do the proper research.

And again, once you’ve done that, you tie your camel, that is your research part, and then you put your tawakkul, tawakkul meaning trust. You put your tawakkul in Allah and you let things play out as they may. So, that’s what it is.

Study Islamic Finance

Now, like I said, let’s take a look at some websites and I’m going to talk about some of these websites. I can’t, I can’t cover every single website that’s out there. I highly recommend all of you to do some basic studies in Islamic Finance.

If you understand the principles of Islamic Finance, the basics of what is halal or haram, and on top of that, if you understand riba al-buyu (usury in trade) then you should put yourself, you will then position yourself in a very good way to be able to understand what it is that you are getting into when it relates to what it is you’re investing in even as it relates to Bitcoin.

Too many times I have brother and sisters out there asked me, “Brother, is this halal or haram? I just want a yes or no answer. Is that halal or haram? I don’t care to learn all that stuff. I mean that’s what you’re there for. You do all the learning and stuff and I’ll just come to you and I’ll ask you what’s halal or haram.” I think this is not a good way to approach this.

The reason being is because if you position yourself, if you put yourself in a position where you always have to go to someone to give you an answer, then you run the risk of putting yourself in a position where somebody out there with evil intentions can mislead you and that’s not good.

So, I encourage you to study. Not only that but I simply don’t have the time to go through every single website and answer every single question about every single website about what’s halal and haram. I simply don’t.

So, I encourage you to do your homework, to take some studies in Islamic Finance, insha’Allah you’re going to find great benefit in it. So, enough of that. Let’s take a look at some websites. And let’s just see, what is my take on the legitimacy of these websites. Let’s do that right now.

StartMiner, BTCProMiner and BitMiner

Ok. So, let’s take a look at some of the websites that some of you have been asking me to take a look at. So, we’re going to start off with three websites. We’re going to take a look at StartMiner, BTCProMiner and BitMiner.

So, these three websites, from what I can see, it looks like they are the same company. And the reason I say that is because, take a look at here at the tagline here. Here it says, “Welcome to leading bitcoin mining pool!” You see that for BitMiner, BTCProMiner, same thing, “Welcome to a leading bitcoin mining pool!” Same thing with StartMiner, “Welcome to leading bitcoin mining pool!” Even the same bad grammar, it really should read, “Welcome to THE leading bitcoin mining pool!”

So, a mining pool off the bat tells me that it should be where if you have your own mining rig, you should be able to join a mining pool and share the responsibilities of mining bitcoin with other miners and therefore you share in the profits.

But when I looked through the website of StartMiner, I don’t see anything here. Even if I go to the Frequently Asked Questions page, nothing here says anything about owning your own mining rig and you’ll be able to mine in their mining pool.

If I go to BTCProMiner, and click on the Frequently Asked Questions page, same thing, nothing here talks about you being able to use your own mining rig at home to do the same thing. I go to the Frequently Asked Questions, same thing with BitMiner, nothing at all indicating that you can have your own mining rig at home and use that to share in the responsibilities of mining.

So, this to me tells me that this is really– let me go back to the home page with StartMiner. This is really cloud mining. And we already know what I think about cloud mining. I don’t think it’s a good idea to do that. Down here, you can see that they have contracts that you can buy, the website looks a little messed up. They have to fix the graphics here, it’s overlapping.

Let me go over to BTCProMiner site. Let me go back to their homepage. And you will see if you scroll down, you see here that they have contracts, right? Contracts. I’m going to go over to BitMiner and you’re going to see the same thing. So, here’s BitMiner. Let’s go back to their homepage. And you’ll see here that they have contracts that you can purchase to essentially cloud mine.

And when you do that you see here where it tells you your daily payout if you purchase one of these contracts. This one the Version 1.1 you’ll get 0.0012BTC per day. Version 1.2 goes to 0.015, Version 1.3, 0.15, Version 1.4 you get 1 BTC, 1 bitcoin per day. I don’t know how they do it and that’s a lot. But that’s the daily payout.

Now, what– let’s see, if I go on to BTCProMiner, your contract, so the same thing. This one is going to give you Version 1.5, here you see that. It’s going to give you 2 BTC per day. Version 1.4, 1.3 and 1.2 decreasing amounts in the BTC payout, your bitcoin payout. Nonetheless, this is really getting into cloud mining and purchasing a contract for cloud mining.

Now, what I don’t like about this is the following. Let me scroll back down here. And this is BTCProMiner. What I don’t like is how they say you will get 2 BTC or 2 bitcoin per day, half of bitcoin, 0.5, 0.15, 0.015 and so forth. I do not think that you can guarantee. I don’t know how you’re able to guarantee that someone is going to get a guaranteed profit per day, a guaranteed payout of that amount.

Let me go to BitMiner. BitMiner, again, same thing. See here, they’re guaranteeing you a daily payout. I don’t see how that is possible because once you invest, it’s an unknown. You don’t know the difficulty on the Bitcoin network, whether that drops, it goes higher, it goes lower. So, how you’re able to guarantee a fixed amount of payout is unknown to me.

If I go over to StartMiner, you see here even though their visuals are messed up on the page, overlapping images. You can still see here where it talks about the daily payout. And that right there to me shows, again that as– it shows me that I need to be– to take precaution when it comes to this website because I don’t know how they are able to guarantee you a fixed amount per day when the– the Bitcoin network is unknown. It’s just unknown. So, you’re talking about an unknown factor.

Now, many people will say, “Hey, look but if I start off with the 1.0 Version, then you see here, it’s free. I don’t pay anything. And my daily payout, they’re going to give me 0.0002 bitcoin per day.”

If I go over to the BTCProMiner, look same thing, their Version 1.0, free to sign up and they give you 0.0006 bitcoin per day. Let’s take a look at BitMiner. BitMiner, same thing, Version 1.0, free, don’t pay for it. And you get the 0.0006 bitcoin per day.

Now, some people may say, “Well, I think it’s really good so I’m just going to sign up and I’ll just get the free bitcoin and I won’t sign up for any of these contacts. I won’t sign up for these. I’ll just stick to the free.” The problem is, is that they use this here to bait you in.

If they get you getting a little bit of bitcoin per day, you’re going to get a little bit greedy and want more. Not even greedy. The word about– it’s not even about greed. It’s just that you’re going to want more. It has nothing to do with greed. You’re going to want more.

So, when you look at BTCProMiner, again, they’re using this to tantalize you. They’re using the free payouts to get you to pony up and purchase a contract because that’s what they want to do. They want to get your money. So, I personally would stay away from this. I wouldn’t even signup for the free version.

StartMiner. Again, same thing, they’re using the free to get you to hopefully hop on board, get used to getting a little bit of bitcoin, getting your appetite wet, getting a little taste of it then they’re going to sucker you in and you’re going to eventually fall for buying some of these contracts here.

And if that’s not enough incentive for you, they even thrown out an Affiliate Program. So, let’s check out the Affiliate Program on StartMiner. So, they’re Affiliate Program is 20%. 20%. It says here that if you invite your friends, you get 20% each time they upgrade StartMiner.

Let’s go to BTCProMiner and see what they say with their Affiliate Program. This one same thing, its Affiliate program is at 10%, 10% payout. Invite your friends and get 10% each time they upgrade their BTCProMiner account.

Let’s look at BitMiner. So, BitMiner, let’s scroll up here. Let’s go to their Affiliate Program and see what that payout is. Here you go again, another 20% payout, right? 20%. Invite your friends, get 20% each time they upgrade their bitcoin miner [correction: BitMiner not bitcoin miner].

So, let’s go back to the homepage again, so that means if you talk to a friend and say, “Hey, don’t just use this free version, go ahead and sign up for one of these contracts.” And when they do, BitMiner says they’re going to give you, I think they said it 20%? Yeah, they said a 20% kickback.

Now, here’s the problem I have with this. Let’s just say you paid $100 for your contract. You pay $100 and BitMiner says they’re going to give you 20% kickback for that.

All that they are really doing is taking that $100, taking $20 out of that $100 and giving it to you. So, they’re giving you your friend’s money that means that they don’t lose anything. They don’t come out of pocket for anything.

They simply took your friend’s money, took 20% of your friend’s money and gave it to you, and gave it to you. They don’t lose anything. To me, this seems like a Ponzi scheme. This seems like a Ponzi scheme. This affiliate program 10% again, your friend puts in a $100, they give you 10% back.

Really, they’re giving you $10 of your friend’s money back. They don’t lose for anything. They don’t come out of pocket for anything.

So, StartMiner is the same thing with their Affiliate Program. So, when it comes to StartMiner and BTCProMiner and BitMiner, I would stay away. I would say it’s no good. It’s a cloud mining service. I already made a post on cloud mining and why I do not think cloud mining is a good idea.

I would stay away from this. It smells like a scam to me, like a Ponzi scheme. You– there is no way to prove that they’re actually doing any cloud mining.

And on top of that, if I click back over to the main page like I said before, I don’t see how you are able to guarantee a fixed rate in payouts per day when the market is supposedly unknown. Don’t know how you’re doing that. So, stay away from it.

One Gram Cryptocurrency

Now, let’s take a look at another website. This website is a company called OneGram. Now, this one has gotten a lot of attention. OneGram. in case you don’t know, let me hop over here. So, OneGram, here’s a YouTube video on it. I’m actually going to put this in the show notes so– oops, let me do this here. All right. So, OneGram – A digital token backed by physical gold.

So, this was created by Muslims, by Muslims. It’s supposed to be Sharia compliant. It’s supposed to be mindful of– for the Muslim investor. If we scroll down the page here, we can see here is their team.

I would love to see if I can get one of them on the Islam and Bitcoin Podcast just to learn a little bit more about OneGram. Here are their advisors that they work with, right? So, we see they have an advisory team and the core team and the advisory team. So, you know hamdullah, looks– hamdullah, looks good.

So, OneGram, like I said, it’s where you get to the digital currency is backed by gold. Let me– let’s take a look at their Whitepaper.

Here’s the Whitepaper, you can go on here and take a look at their Whitepaper. Now, I’m going to scroll down the page because there’s something I want to show you here. Now, here is a section called Money According to the Sharia.

Now, some of you may recall that the first blogpost that I made in the Is Bitcoin Halal Series, talked about currency, talked about money and how the Sharia, how the Fuqaha or the scholars, how they defined money.

And one of the things I always say in my posts is that you will find that scholars, you will find differences of opinion amongst the scholars. So, if you look here, it looks like they are taking their understanding of currency from Sheikh Imran Hosein.

I love this brother. Sheikh Imran Hosein who is from Trinidad and Tobago, who currently lives in Malaysia. He’s from my home country. My family is from Trinidad and Tobago, big ups to T and T! Trinibago! So, he’s from there, big sheikh.

And here is something that he points out that I think is very fascinating. He says that out of these six principles, these six key properties here. He explains that the six key properties of what money is in Islam. He says that in point number four, money has intrinsic value.

Now, I have– the teacher who I’ve studied with and other scholars out there, other people in Islamic Finance have a different opinion. And they say that money does not have to have intrinsic value. So, I’m not saying that Imran Hosein is wrong. I’m not saying he’s wrong. I’m just saying there are differences of opinion and just to be aware of that.

Nonetheless, here is their Whitepaper, you should check it out. You should read it. Good information on there. One thing that you should keep in mind and– actually let me go back to the main page and scroll down. Something to keep in mind is that this is not a coin that you can mine.

So, you cannot mine this coin. I’m going to scroll down and, ok here. All right. So, here, it tells you the phases it went through, March 1st, May 27, September 4th then January 15, the coming of January of next year. Here is the schedule of what they are releasing, what they are doing with OneGram.

If we look at May 27th of this year 2017, it says that OneGram initial coin offering. It means that all of these coins were pre-mined. They were pre-mined. You cannot mine the coins. So, if you want them you have to go directly and purchase the coins and those coins, it seems like each coins is backed by 1 ounce of gold, 1 ounce of gold.

So, hamdullah, it sounds good. The only thing that I would question is how is one able to verify that the coins are actually backed by gold. Is it something that you get to see, I mean how do you get to verify this? I don’t know.

Like I said, I would love to go ahead and interview someone on the team, see if I can get them on the podcast. But this is a site I’m going to put this in the show notes. It’s– I do have brothers and sisters asking me about this. Here is the brief intro on YouTube. I’ll post that as well.

So, my take on OneGram is it’s still a little bit of investigation needs to be done. Reading the Whitepaper, finding out how you’re able to verify the gold. Those are some questions that I would have and some things that I would need to research further to feel 100% confident about that.

Is Bitconnect a Scam?

Now, let’s take a look at Bitconnect. [website no longer exists] Now, Bitconnect is really, really popular. And I get asked about Bitconnect a lot. So, what exactly is Bitconnect? Bitconnect is a new cryptocurrency, a new cryptocurrency that goes by BCC.

That’s what Bitconnect- it goes by BCC. So, how Bitconnect works is you take your bitcoin and you purchase the tokens, the Bitconnect tokens. You then take your tokens, you take your tokens and you go ahead and lend it to Bitconnect.

You lend it to the trading bot. The trading bot will go out and start trading those Bitconnect tokens for bitcoin, for bitcoin. And what it will do is they will give you a daily payout. They’re going to give you a daily payout. Let me scroll back up the top. They’re going to give you daily payout. And that’s going to be a kickback for your investment.

So, let’s just say you give $100. You will go ahead and purchase, you take your bitcoin, $100 worth, you purchase your Bitconnect tokens. The Bitconnect tokens are used by the Bitconnect bots to trade bitcoins, you know and it does its best to make sure that it obviously buys low, sells high. And when it does that, you get your $100 back over the course of time. You get your $100 back plus interest, plus interest.

Here is a great video. I’m pretty sure some of you, you may have seen this, maybe not. If not, check out this video called Bitconnect Full Tutorial. Bitconnect Full Tutorial, I highly suggest that you check it out .

This brother right here, Trevon James, this young man. Trevon James does a very good job of explaining this so check out this video. So, yeah, so check out this tutorial it’s a 14-minute tutorial, really goes over how the whole system works.

Here is another video (Bitconnect scam alert! Is this 800 million dollar crytocurrency a ponzi scheme?) that you want to check out. This one is by a gentleman, a brother by the name of David Hay. So, he believes that Bitconnect is a scam and a possible Ponzi scheme.

That’s what he believes. So, I am going to post both of these videos, the link for these videos in the show notes– I shouldn’t say show notes, the blog notes, the blog notes so you can refer to these and listen to both of these videos. I highly suggest that you listen to both of them; especially this video right here by David.

So, my take on Bitconnect, my take on it is that I would stay away from in. Now why is that? I would stay away from it because at the end of the day, one thing is you cannot there’s even– you can’t verify that the bot, that there is a bot that is actually trading your Bitconnect tokens for bitcoin.

I cannot find a way to verify this. If some of you out there can, please leave comments in the Comments Section and tell me how you’re able to do that because I’m not. I don’t know. I can’t find a way how to verify that there was a bot due in that training– that trading.

On top of that, what you’re doing when you lend, you’re investing money essentially when you lend your $100 worth of bitcoin, they don’t give you back bitcoin, I believe they give you back money, your $100. And they give you back an interest on top of that. So, that to me seems like usury.

That’s– if you want to say riba al-buyu, you can, that’s a riba. It’s a riba. So, you’re swapping out your bitcoin for actual money, right? And now you’re getting back more money than you put in because of a loan. And this is riba. So, that’s another reason why I would stay away from this.

Now, some people may argue, “Well yeah, but you might be getting my extra money.” But what you gave in the beginning was really bitcoin, digital currency. And digital currency, as we know right now according to the fuqaha, they haven’t classified it as money.

So, if I give that but then get back money in exchange, is that really haram? Well, the truth to that and the answer to that question is, I don’t know, to be honest, I really don’t know. But I do know that when you put in $100, you’re getting more than 100 back for the loan, the $100 loan that you gave them. You are getting more money back.

And they’ve given it to you back because- more money back as interest. So, that to me is usually- I personally would stay away from it. I don’t think Bitconnect is a good deal. I think you should stay away from it.

Binance and Poloniex

Let’s take a look at another website. Now, we’re looking at Binance. Binance is simply a website that allows you to trade currencies, Ether for Bitcoin, Litecoin for Bitcoin, what else we have here? Dash for Bitcoin. So, we’re able to trade currencies on this website. Seems pretty straightforward.

Another website that people have asked me to talk about was Poloniex. I hope I’m saying that right. Poloniex. This is another website where you actually will get to trade currencies. So, we’re seeing what– how people use this website.

It’s going to give you the market rates where the trading for here all these different coins, Bitcoin Cash, Ethereum, Dash, Monero, Doge, so you can see all these coins here.

Now, if you’re just using this website Poloniex and Binance, if you’re just using this website to swap out, to trade for another digital token, another digital currency, Dash for Bitcoin, Bitcoin for Doge, then I think that is fine and there’s nothing wrong with that.

Where it starts getting tricky is let’s say, let’s go back to Poloniex. Where it gets tricky is when you start doing things like margin trading. Margin trading is haram in Islam. Basically, you’re borrowing money so you can trade. And a lot of times, you have to pay interest on that money that you borrowed.

Now again some people will say, “Yeah, but I’m borrowing money to purchase digital currency and I’m trading the digital currency. And when I cash out, I’m getting money back. Is that really haram?” Because you’re going in between a currency and something that is not, it’s not considered, technically considered money according to the scholars right now.

The truth is I really don’t know because it’s such a gray area, I don’t know. I personally would stay away from it. I would just stay away from it. Margin trading I would stay away from it. So, that’s my take on it.

But if you’re using the website, like I said just to, you want to trade some Doge for maybe is this Zcash? I think Zcash. You want to trade Dash for Monero, Litecoin for BTC Cash [correction: it should read Bitcoin Cash], go ahead and do it, nothing wrong with that. Nothing wrong with that.

Once you start getting into margin trading and short selling, day trading that could potentially be an issue and we know those things are haram in Islam.

Is ShapeShift Legit?

Now, let me also finally show you one website that I use for trading. I use a website– if this even loads up. Here you go. I use ShapeShift. So, ShapeShift is a website that all it does, it allows you– let me scroll down here. It allows you to simply exchange one cryptocurrency for another.

We can see here Bitcoin for Dash, Bitcoin for Ethereum, Ethereum for Bitcoin, Doge for I don’t know, is this Bitcoin Cash? Yeah, Bitcoin Cash. So, this website does not deal with fiat currency such as the Euro, the British Pound, the US dollar, the Saudi Riyal and so forth.

It only deals with these currencies here, the digital cryptocurrencies that we see here, that’s all it’s going to deal with. I like it. It’s very simple, easy to use. You cannot exchange large amounts. I don’t think you can exchange more than– I don’t know, I don’t know the amount but you cannot exchange really large amounts on here.

But I use it because I think it’s safe. I’ve never had a problem with it. You cannot do any margin trading on this, no day trading, no short selling, none of that. It’s strictly exchanging one coin for another. That is it. It’s clean. It’s simple. It’s easy. I like it. I give this site a thumbs up.

Here is a great article. I’m going to put the link for this as well, ShapeShift cryptocurrency exchange review, great article on ShapeShift. If you’ve never heard of it before, it’s a great way for you to learn about ShapeShift, gets into what it is, what cryptocurrencies you can trade, how they accept payment methods.

And ShapeShift, it tells you right here. Wow! It’s highlighting the whole thing, “Only facilitates crypto to crypto exchanges”, which I think is brilliant. That way they stay away from getting into trouble with the law in regards to using any type of government currency to trade out to buy another cryptocurrency.

I think it’s very smart on their part to do that. I think here they get into the pros and cons of the website. So, ShapeShift, I like it. I give it a thumbs up.

So, that’s my whole take on it. That’s my take on these websites. I know I haven’t gone over every single website that people have sent me. It’s just impossible for me to do so. Again, exercise caution when you’re looking at these websites.

Always keep in mind that, you know, if you have a solid understanding of basic Islamic principles when it comes to trade, if you understand riba al buyu, what that is, you should do fine in being able to identify whether these websites are a scam or they are the real deal or not. So, that’s my take on it. Insha’Allah it was a benefit to you. And, yeah.

Summary

All right. So, as a wrap up is investing in Bitcoin halal or haram? Well, we know that it is not haram. It’s actually not haram. It’s not haram. However, there are certain guidelines or principles that you should follow when it comes to investing, right? Keeping in mind that speculation is the norm.

Some element of risk will be there once you– when you invest in something. But the fuqaha, our teachers, tell us that when it comes to investing, we are supposed to do our homework, investigate the matter. And that investment vehicle you’re looking at is it halal? Is it haram? Who are the financial backers behind it? What is the– what’s the product itself? What’s the pros and the cons of the product?

Just doing due diligence, really making sure that you really ask questions and do your research before you invest in something. I mean if you don’t do that then you can argue, if you’re not going to do any research and you just hop in there, you jump in there and you throw money into it, then you can say that that is like a form of gambling and we know that gambling is haram, gambling is haram.

So, again, if you do your research, you’ve done your research, you feel confident that you’ve checked as many nook and crannies as you can check then you invest in it and you put your tawakkul, your trust, you put your tawakkul in Allah and you let the outcome be as it may. And that is that.

I wanted to thank you for checking out blogpost number four of this four-part series. You’ve hung in there. You made it all the way through. In our first blogpost, we talked about currency, then we talked about trade, then we talked about bitcoin mining and now investing.

I want to thank all of you who have shared this, viewed this, spread it far and wide, thank you so much. Alhamdulillah! May Allah reward you. I ask that you always keep me in your du’a (prayer), I always need them.

Please stay tuned. I’m looking to actually hop back into doing interviews with the podcast series and I have in mind, already have in mind a couple of people to reach out to. It’s just a matter of getting them to agree to do the podcast and actually solidify a date with them.

But please stay tuned as some more interviews on the podcast series will be coming up. JazakAllah kheir. As-salamu alaykum wa rahmatullahi wa barakatuh. Masalamah.

PLEASE KINDLY SHARE THIS ARTICLE IF YOU’VE FOUND BENEFIT IN IT

Assalaamu Aleikum and welcome to part 3 in our 4 part Is Bitcoin Halal Series. Today we’ll touch on, is bitcoin mining halal or haram? We’ll talk about the general opinion on bitcoin mining by our scholars and we’ll also take a look at bitcoin mining hardware you can use to mine bitcoin as well as bitcoin cloud mining.

But let’s answer the main question, is bitcoin mining halal or haram?

At the time of writing this blog post, there is still no consensus among the fuqaha that Bitcoin in and of itself is haram. If you are mining bitcoin yourself with your own bitcoin mining hardware, then we cannot say that this is haram.

You are purchasing the mining equipment and/or maybe you are joining a mining pool, and this is not haram. However, cloud mining may be considered haram because there is a high percentage of gharar (uncertainty) associated with cloud mining and the sharia prohibits business dealings that are not transparent or unclear due to uncertainty.

You can learn more by reading the blog post or watching the video below in case you would rather not read. You can also use the menu in the video to go to different parts of the video.

If you choose to mine for bitcoin or any other cryptocurrency, simply make sure to follow the laws of the country you live in and make sure to do your proper research before investing any money or time into bitcoin mining. 

Always keep in mind that you should verify all information for accuracy, the age of the content you are reading, and carefully consider your own financial situation before making your decision.

This blog post is for informational purposes only.

Links to videos in this blog

• DIY Bitcoin Mining: Hardware (part1)
• DIY Bitcoin Mining: Software (part 2)
• Raspberry pi and GekkoScience Compac USB Stick Bitcoin Miner 8gh/s+ (BM1384)
• Working USB Bitcoin Farm with Raspberry Pi running Minera
• Bitcoin Mining in July 2017 – Still Profitable?
• 3 Reasons Why You Should Not Cloud Mine

Video Transcript

Assalamu alaikum and thank you for joining me for today’s blog post. Today is blog post number three of our four-part series, the, Is Bitcoin Halal Series. In part one we covered currency. In part two we talked about, is trading Bitcoin halal or haram? And in today’s blog post, we’re going to get into bitcoin mining. Is bitcoin mining halal or haram? 

So, let’s hop into that real quick today. Okay, now as we covered in the first and second blog post that we had. Number one, currency. We mentioned that the fuqaha as of yet have not classified bitcoin as money.

In our second blog post when we talked about trade when mentioned that, when it comes to trading bitcoin, bitcoin is not subject to rules of riba al buyu. So, the rules of trade don’t really apply to bitcoin. Again, because it doesn’t fall into the categories we talked about.

And if you haven’t read that blog post, if you haven’t caught that video, go back and check them out. Again, check out the first one that talks about currency and the second one that talks about trade.

We got into a little bit in regards to showing you the different categories and classes of trade- of items of trade that the fuqaha broke them up into classes- and we talked about that and what that means in regards to rules that apply to trade to items that fall into those categories. So, again, go back and check that out.

What Scholars Say About Bitcoin Mining

So, with that being said, we’re going to get into bitcoin mining. So, with bitcoin mining, people are always asking, “Hey is mining for bitcoin halal or haram?” So, as we mentioned, Bitcoin in and of itself is not haram.

So, the fuqaha have not unanimously, there is no mashoor (popular), there is no consensus that Bitcoin in and of itself is haram. It’s more of a wait-and-see approach with the fuqaha and to exercise caution when you’re using it.

And also, it seems like it’s also more about paying attention to the law of the land of the country where you live in; seeing if Bitcoin in your particular country is legal to use or not. But when it comes to bitcoin mining, bitcoin mining in and of itself, we cannot say that it is haram.

Now, there are some things that you should pay attention too. So, I’m going to look at mining from two different perspectives. The first one being mining for bitcoin yourself; meaning, you purchased the hardware. You join a mining pool and you’re mining bitcoin or any other altcoin that’s out there.

And the second one is cloud mining. And I actually did a video, a blog post, on cloud mining. So, that’s out there for you to check out as well. So, let’s go ahead and first let’s talk about bitcoin mining. I’m sorry- mining yourself – not cloud mining – mining yourself.

First thing I want to talk about is, if you want to get into bitcoin mining there are some things that you probably want to pay attention too; certain equipment that you want to take a look at. So, I’m going to go ahead and share with you some equipment that you may want to take a look at. I’m pretty sure some of you out there have already done some research on this.

Some of you have contacted me through my website here and let me know that you’re new to Bitcoin. So, if you’re new to Bitcoin this probably will be even more [of] benefit to you. In the hopes that we won’t have you wasting time or money.

So, I want to talk about some equipment that you should look at. Some things to think of and then I also want to touch on bitcoin mining when it comes to cloud mining because there are some concerns there that I think- where you have to pay attention to the sharia in regards to cloud mining.

So, let me go ahead right now and let’s go ahead and hop into mining on your own with hardware that you have either purchased or rented so let’s go ahead and take a look at that right now.

Bitcoin Mining Hardware

Okay, so, for those of you thinking about mining bitcoin at home, I wanted to share with you hardware that you should look at. So, this is a really good video where this guy, his name is Fred, he’s going to show you an inexpensive way to set up a mining rig at home that’s not going to break the bank.

He’s going to use bitcoin miners that are USB sticks. Now one thing I want you to pay attention to is, look at the date as to when this video was published in 2013. That’s old. That’s old. So, we have to keep in mind that the Bitcoin, the hash rate on the Bitcoin network has gotten much higher.

It’s increased dramatically since then. So, keep that in mind when you’re looking at videos on YouTube that talk about setting up mining rigs for yourself at home. You want to keep in mind, look at when the video was made. Look at the products that they’re using. It’s really important. You have to be able to make sure that whatever you purchase is going to be well worth the investment.

So, let me go ahead and – let’s make this big here. Let’s close here. Press play. I’m going to fast forward here. Handsome young gentleman right there but we’re going to fast forward. All right, so, here’s the setup. Here’s the setup. So, if you look over here to the left, you’re going to see the Raspberry Pi 3.

This is going to be your minicomputer. This is going to be the casing to protect this Raspberry Pi. I highly recommend to have a protective case for it so this way – it’s so exposed that you don’t want something to fall on it or you drop it or you, God forbid, you step on it by accident.

So, you want to have a protective case for your Raspberry Pi 3. You want to have a fan because, your fan, that’s going to keep your bitcoin USB sticks cool. And this is going to be your USB hub. It’s going to be your USB hub where you will go ahead and plop those suckers in right there. Plop in your USB mining sticks in order to mine. And this is going to be your memory card.

Now, one thing I will say is – let me go ahead and let the video play out here – one thing that I will say is keep in mind that these Bitcoin Erupters, these are ASIC Bitcoin Erupters. These are no good in 2017. At the time of the making of this blog post these are no good. No bueno. No good. Don’t get these. I don’t think you’re going to see any profit whatsoever with those. They’re just not going to cut it nowadays.

This video here is pretty much going to be him explaining to you, showing to you, the different hardware and he’s going to get into showing you how to set up the hardware and he does a really really good job of that – Let me go ahead and fast-forward here. Let’s see here. Again, getting into the setup – Here we go right here.

Like I said, this is going to be just an excellent video overall. I mean, it shows you all the hardware equipment that you’re going to need to use to build your own mini mining rig. You know, to build this rig isn’t going to break the bank. You don’t need to spend thousands of dollars.

It’s a great do-it-yourself little video on that so, I am going to include this in the show notes there. So, you can go ahead and check this out. Let me go ahead and escape out of this video and pause it.

So, again, he just showed you a layout of what equipment to use, and I had mentioned that even though he was showing the Bitcoin Erupter – just again, just want to make, drive the point home, when it comes to this Bitcoin Erupter, you’re going to see this out on the market. They are still selling this. Don’t buy this. Don’t buy it.

You’re not going to make any money with this. You’re going to lose money. Don’t buy this. Okay, this is old. 2013 video, old. The premise of the video, the equipment he’s showing you how to set up is good. But this particular USB mining stick, that’s past its prime.

So, what do you want to look at? Let’s go to this video here. This video, check out the date on this video. 2016. So now this is 3 years later. This video, I will also include this link in the notes of this blog post – let’s go ahead and make this big here, close this.

And I’m going to press play – alright so, in this video you’re going to see again that he is also using a Raspberry Pi 3 as his minicomputer. You can see there that he has the protective casing. You always want to make sure that you’re going to protect your minicomputer. You want to protect your investment. I want to go ahead and fast forward, to here – let me back up – there you go.

So, you can see right here, so this right here is going to be your Gekko 3. This is going to be the Gekko, I’m sorry the Gekko 3, the GekkoScience. The GekkoScience USB mining sticks. These are going to be superior to the Bitcoin Erupter. And as you can see here, this person also has a USB hub, a multi-port USB hub, and a fan because I’m telling you these suckers run hot. Blazing hooooot! HOT! So, again you can see now in 2016 we see that we are using the Gekko miners.

Let me show you another video here. This one here. Now look at the date of this video. This one was published in March of 2017. So, this is this year. And – let me make the video, enlarge it here, close this out, press play – and I’m just going to sort of walk through this video here. He is also using a Raspberry Pi 3 still in 2017.

This is still good to use and you can see here what he’s showing you is his little farming set – let me pause the video – this is his USB board. He is using the GekkoScience USB bitcoin mining sticks and obviously you can see the fan because again we said that this runs hot. When this sucker mines, it’s really, really hot.

And over to the left, I think at some point he’s going to show you, he’s showing you the, his mining sticks there and then over to – I think the left-hand side up here, you’re going to see his power supply. So, this is the power supply that he is using, but again I just wanted to show you these videos just so you can see the equipment, what these people are using.

Let me go back for a second here. So, in this video, so this video I said this is going to be a great do-it-yourself tutorial on what hardware to use and how to put it together, that’s part one. He also has a part two that’s pretty good to check out as well.

The part two is just a software – but this really gets into software meaning like bitcoin wallets. What wallets to use. So, they’re good, again, the videos are old, but they still have value in them. There’s still value in this.

So, let me do this right now. Let me hop over to the Islam and Bitcoin website. I’m going to go over to the products tab and I’m going to click on mining.

So, let me click on that and that’s going to bring up the mining page here and on this page, you can see that this is where I have listed all the equipment that relates to bitcoin mining.

I did my best to put equipment on this page of quality. I only put equipment on this page that I thought would be worth it and disregarded anything else. So, the top of the page you’re going to see the Gekko USB mining stick. I go ahead and give you some background on it here so that you can read up on it. This is, like I said, it’s going to be far superior than the Bitcoin Erupter that he was showing you in that older video there.

Here you’re going to have your USB multi-hub-ports. That’s where you’re going to, you’re going to use this to put in your USB mining sticks. This is a 10 port USB 3.0 hub. Down here this is a 12 port USB 2. I would go with this, I think this is going to be better, you’re 10 port USB. Why? Because it’s a 3.0. So, the 3.0 is going transfer data faster. And I think that’s going to help you when it comes to mining.

So, let me scroll down here and this is going to be your Raspberry Pi, your minicomputer. So, you can purchase it on its own, on its own without the casing or you can go ahead and purchase it with the kit.

The kit gives you everything you need. I totally, highly recommend if you are going to go this route just get the kit. Save yourself some time. Don’t try to go out there and try to put things together piece-by-piece. You’ll probably end up spending more money. This kit is going to give you the protective case, the power supply, your cables, your memory card, so you’re going to be good to go if you go that route. So, I would suggest doing that.

So, let me show you this video.

Now this video, look at when this one is produced, Bitcoin Mining in July of 2017, so now we’re pretty much caught up to present day. At the time of making this video, this blog post I should say, at the time of making this blog post, this video is still valuable for today.

Now, why do I think this video is important? He is going to talk about – let me go ahead and make this big – this video, he is going to get into showing you different equipment to use for mining. So, you see right here, he’s going to get into the Antminer, the Bitcoin Erupter. He’s going to mention just as I did that this no good to use. No good to use.

So, what I’m going to do now is – I want to fast-forward in this video to about here – he goes through some equipment, but the one that you want to pay attention to is when he talks about the Antminer S9. This is going to be your workhorse.

This is going to be the Bitcoin hardware, the mining product that is going to turn you a prophet insha’Allah. The price tag though is pretty darn high. Check out this video. Check out this video. He gets into all the analytics. He talks about your electricity costs, the price of the equipment, how much bitcoin you going to earn per day. It’s an excellent video and again I’m going to put these links in the notes of this blog post. So, check that out.

Let me go back over to the website here and I’m going to scroll down just to show you on this page the Antminer S9. Here you go. Like I said, this is going to be the “big daddy”. The big worker. Check out the hash rate. This thing is hashing at 13.5 terrahash. That is larger, bigger, than the hash rate of the Bitcoin Network right now.

With that being said though, look at the price. That’s a lot. $2,500 you may find it for $2,300. That’s a big chunk. That’s a big chunk. That’s a big price to pay for that; however, insha’Allah, that is going to make you a prophet insha’Allah. That is going to turn you or profit.

If you scroll down the page here you’ll see that I also have the power supply for it. So, you have the power supply for the Antminer S9.

Can You Make Money Mining Bitcoin?

So, let’s get into talking about the reality of making a profit. I’m not showing you all of this just because I want you to come to my website and purchase the equipment. If you do, great. Alhumdulilah. That would be wonderful. But I want to be honest with you.

As your Muslim brother, your brother in Islam, we’re supposed to be honest with each other. If you are looking to purchase the Gekko USB stick, keep in mind that this is not going to make you some huge profit.

I don’t want you to think that if you go ahead and get the USB stick and you go ahead and get your USB hub, you get your Raspberry Pi 3 and you put your mining rig together that you’re going to all of a sudden just, alhumdulilah, you’re going to make a $1,000 per month in bitcoin. $500 per month in bitcoin. That’s not going to happen. It’s not going to happen.

Keep in mind that the hashing rate of these USB sticks are very low. So right here you can see that it says 8 gigahash. I think it goes up to 13. It’s not going to be a lot. You could potentially lose money with this. I think you may just break even.

Some people, some people are able to make a profit with this but not everyone. And the people who make a profit with this they do so by tweaking, and I don’t know how they do this, if some of you know please tell me. Leave comments in the blog post below. They are able to tweak their USB hub. I think they’re able to tweak it so that they maximize the data transfer rate in this USB hub which then allows this USB stick to maximize its hashing rate.

It can hash at a higher rate and transfer the data faster. Like I said, I really don’t see you making a huge amount of profit with this. I don’t want you to be delusional and have all these dreams and hopes that if you get this it’s going to make you a lot of money off the bat.

I think if you’re just looking to get your feet wet with bitcoin mining. You want to try it out on your own. You want to do it in a manner that is relatively easy then this is a good way to go, but know that you’re probably not going to make huge profits. I think that you are probably going to make something in the realm of maybe $0.20 per day. $0.30 per day. It’s not going to be hundreds of dollars.

If you live somewhere and you don’t have to pay electricity costs even better. That’s good. If you have to pay electricity then you have to figure out if you’re going to lose money or not. Again, this is good if you just want to get your feet wet. This is good if you want to earn some bitcoin, mine some bitcoin, but you’re not really concerned about making huge profits.

There are some people out there who do make profits and they do so by tweaking, again, they are able to tweak their USB hub. But again, don’t look at this as though you’re going to make huge profits. You’ll make some, you’ll get bitcoin, inshallah no doubt about it you’ll get bitcoin, but it won’t be this huge, it’s not going to be huge amounts.

And the price for this, the price is really, let me see how much it is. The price to get into this if you want to mine with it. Here you go right here, so we can see here you’re looking at about 70 US dollars. 69/70 US dollars to purchase a Gekko USB mining stick.

If you see right here, look here, it says, you can go from 8.5 up to 15+ gigahash, gigahash speed and if you see here it says that your USB port must be set at a higher speed rate. It should be set above specs in order to hit that 15 gigahash rate.

So, I think the people who are really making some kind of a profit, they are tweaking out their USB hub. Okay? All right. Again now, the way that you’re really going to make some money is if you go the route of going for the [Antminer] S9.

I don’t think this is even released yet but the price tag is really high. I don’t think that most people can afford this. I really don’t think so. I know some of you out there do mine bitcoin. You’ve contacted me and you’ve told me that you’re doing it. I don’t think everybody can afford $2,500 though.

So, that’s all I wanted to show you in regards to the hardware. Again, I will post all the links there. Mining bitcoin on your own from what I’ve seen there is nothing haram about this at all. You’re purchasing the equipment, you’re joining a mining pool, bitcoin in and of itself is not haram. Mining, it’s not haram. No one [scholars] said it’s haram.

So, if you want to do this, give it a shot. Give it a try. Okay, so let’s talk about cloud mining. I want to talk about cloud mining now.

Bitcoin Cloud Mining

All right, so now that we’ve finished covering bitcoin mining as it relates to purchasing your own equipment, building your own mining rig, now we want to touch on cloud mining.

Now, when it comes to cloud mining – let me go ahead and click on the blog tab here – now, I had published a blog post sometime back that was called, “Should I Cloud Mine?” – let me go ahead and click on this – “Should I Cloud Mine?”

And in this blog post I covered my experience with cloud mining, and I cloud mined with Genesis. So, let me go ahead and lower the volume here just to show you that – let’s see here. Where do I want to go? Let’s try, is it here? We’re just doing some guesswork here. So, let’s wait for this to pull up, yes.

So, in this blog post, again, I talk about my experience with Genesis Cloud Mining. It’s a very thorough video that I produced. Very long, about 45 minutes long. I know, very long. But in the video, I actually do cover my experience with Genesis.

As you can see here, I even get into showing you the daily payouts that I was paid from my cloud mining. Again, you get to see the dashboard. You get to see all inside my account. We talk about the pricing of the contracts. It’s a very very thorough blog post. I definitely would say that you should go ahead and check that out.

But now as I’ve gained more knowledge in regards to how cloud mining works and my studies in Islamic Finance, I’ve now come to the conclusion that I believe that cloud mining is no good. And I do not recommend cloud mining and that led to a blog post that I published called, “3 Reasons Why You Should Not Cloud Mine.” “3 Reasons Why You Should Not Cloud Mine.”

And the number one reason that I would say why you shouldn’t cloud mine it because of what it’s called “gharar”. Gharar means uncertainty. Technically I believe it means deception but according to Islamic Finance when you are dealing in contracts, gharar is normally understood to mean uncertainty.

Now, when you purchase a cloud mining contract, there is no way for you to truly verify that the bitcoin you are receiving is from that company actually performing any mining. There is no way for you to really authenticate, to verify that the bitcoin that you are receiving or any of the altcoins that you are mining for.

There is no way for you to truly authenticate that they are actually mining those coins and that the payout that you are receiving, that the bitcoin that you are receiving, is actually from, actually from them mining.

Now what’s interesting is, don’t just take it from me, there’s a gentleman by the name of Andreas Antonopoulos – I’m going to turn up the volume here and just play for you a segment of this video that I published, and you can always go back and check it out for yourself. You can check out the full blog post, the full video here.

I just want to play a portion of it for you so that you can see, you can see for yourself – if I can get it here. Come on. – All right, so you can see for yourself Andreas, his take on cloud mining. So, we’re going to play that right now.

“Yeah, 95% of cloud mining schemes are scams. They are straight up Ponzi schemes and the reason is, there is no effective way to prove whether the money you’re making comes from the mining share that you’ve invested in or simply from the money that the people after you are investing into the same scheme which is what a Ponzi is.

Cloud mining in itself is almost always a Ponzi. I have not seen a single one that I would trust, yet, I’ve seen hundreds of examples of them collapse. So, if they’re making money from mining but they’re not actually running any hardware, they’re just putting some money in and money keeps pouring out every month, I would take a 95 to 5 percent bet on that myself that it’s a Ponzi scheme.” ~ Andreas Antonopoulos.

Conclusion

All right, so there you have it. Now, what he touched on is what we would call gharar. And again with an Islamic contract, when you’re doing business between two parties, there shouldn’t be gharar in the contract. The element of gharar should not be in the contract. Now with that being said, I completely understand that the sharia does allow for some percentage, a small percentage of gharar depending on the circumstance.

So, what do I mean by this? I will share with you an example that was provided to me by my teacher. Now, let’s just say you are a grocery store owner. You own multiple grocery stores and you are interacting with a farmer and you’re purchasing barrels of apples from a farmer.

So, you’re purchasing apples from a farmer and the farmer is selling you one hundred barrels of apples. And let’s just say maybe each barrel weighs about 50 pounds and you’re going to distribute these apples all across the different stores that you own throughout the city.

Now, what happens is, when you go to purchase those apples from that farmer, 9 times out of 10, most of the time, you are not going to open up all 100 barrels and check each and every single apple to make sure that all the apples are in good quality, that they’re not rotted, that they’re not damaged, or to even check to make sure that there are apples in the barrels.

Realistically you are not going to do that. You may randomly check some barrels here and there, but most likely you’re not going to open up each and every barrel and check every single apple, you’re not going to do that.

And the fuqaha realized that for sake of practicality, for sake of ease, you’re not going to do this. So, this type of uncertainty is allowed. This is a slight uncertainty that is permissible.

However, you can argue that cloud mining is different. Cloud mining is different. You’re not opening up, it’s not like you’re dealing in barrels of apples. You’re giving money to someone trusting that that person is going to mine bitcoin for you and there’s no way for you to verify that the person is actually mining bitcoin for you.

You don’t know whether they are doing that or just giving you your own money back in small proportions as bitcoin and telling you that you are actually receiving bitcoin from their cloud mining services. You simply just don’t know. It’s an uncertainty that is just there. At least I believe so.

So, just to wrap things up, when it comes to the question, is bitcoin mining halal or haram? Generally speaking, we can say that there is nothing haram about it if you purchase your own mining rig and you have your own equipment or let’s just say you are paying someone else to cloud mine for you but you actually can, maybe you can go to their house or their apartment and you can actually look at the mining rig itself and you trust this person and you know that you are actually receiving bitcoins from their cloud mining process.

However, when it comes to these organizations [companies] that are out there in other countries that you yourself, you can’t visit their location, you have no way to verify whether or not you are receiving bitcoin from their cloud mining services, this would be known, at least from my understanding, this to me seems to be gharar.

And I do know that in Islamic Finance when you have a contract between two people, two parties, the element of gharar should not be there. So, that wraps it up for this blog post when it comes to, “Is bitcoin mining halal or haram?”

Insha’Allah you found benefit in it. I ask that you do share this. Again, especially if you found benefit in it. So now we see that we’ve advanced in our series, the, Is Bitcoin Halal Series. The first blog post that we had dealt with currency, “Is classified as money according to the Sharia?” The second blog post we touched on trade.

In this blog post we now touched on mining, bitcoin mining. And in the next blog post that we have coming up we’re going to touch on investing in bitcoin, “Is Investing in Bitcoin Halal or Haram?” Please stay tuned to check that out. That blog post is coming up sooner than later insha’Allah and I just wanted to thank you for checking out this blog post today.

Assalaamu Aleikum and welcome to part 2 in our 4 part Is Bitcoin Halal Series. Insha’Allah today we’ll talk about trading bitcoin. We’ll take a look at how the fuqaha (scholars) view bitcoin and what this means when it comes to trading bitcoin.  

Many Muslims are asking the question, is bitcoin trading halal or haram?

As of the making of this blog post, there is still no consensus among the scholars that bitcoin can be classified as money. Therefore, bitcoin cannot be subject to the rules of riba al buyu. So, we can say that, at this time, trading bitcoin is not haram.

Now, some scholars have given fatwas that bitcoin is haram and others say bitcoin is halal. But again, there is no consensus that bitcoin is haram, and in Islam, we always start with the Islamic principle that things are considered permissible until proven otherwise.

I agree with the scholars who say that bitcoin is halal since I believe their argument and understanding of bitcoin is more accurate than those scholars who argue the opposite. Not only do some scholars see bitcoin as halal, but they also see that bitcoin can be classified as money.

And if the scholars reach a consensus that bitcoin can be classified as money, then not only is it permissible to trade bitcoin, but then we must now also apply the rules of riba al buyu when trading bitcoin.

To learn more about trading currency and how bitcoin comes into play. Please watch the video below or read the article below as we discuss what are the rules of trade in Islam.

Video Transcript

Assalamu alaikum and thank you for joining me for today’s blog post here with the Islam a Bitcoin project. Today is the second blog post in our 4 blog post series. Our series is called, Is Bitcoin Halal Series.

Now, in our first blog post of the series we talked about currency. We talked about how does the sharia define money? What is money? What is a currency? And where does bitcoin fall into that? And what do the fuqaha (Islamic scholars) have to say about bitcoin as it relates to money according to the sharia?

Now, if you’ve missed that blog post please do go ahead and check it out. As for today, we are going to step into blog post number two in the series and we’re going to talk about trade.

Now let me just start off by saying that this is not meant to be a fatwa series. I’m not here to give a fatwa. I always say I’m not a mufti. I’m not an alim. I’m not a big time sheikh. I am simply a student of knowledge sharing with you information that I have learned from my teacher in my studies as it relates to Islamic Finance with the hopes of benefiting myself first and foremost and all of you out there as well.

Keep in mind that even though I may share with you information that I have learned from those teachers, scholars, that I’ve taken knowledge from it may be that another scholar out there has a difference of opinion and this is quite normal in Islam.

It is quite normal for the fuqaha to have differences of opinion amongst each other so no need to get into squabbles or some extreme debates over the matter. So, let’s hop in today’s topic of discussion right now. Is trading bitcoin halal or is it haram? what does the sharia have to say about trade as it relates to bitcoin? What do the fuqaha have to say about trade as it relates to bitcoin? Let’s go ahead and take a look at that right now.

Is trading bitcoin halal or haram? So, that’s what we’re going to look at with this blog post. The first thing we’re going to do is take a look at some hadith that the fuqaha normally look at when it comes to trade.

After that we’re going to talk about money and see how does trade come into play when we are talking about money and where does bitcoin fall into that. And after that we’re going to look at some basic principles in Islam when it comes to trade; when it comes to things such as futures, short-selling, binary options and the like. So, without further ado, let’s go ahead and move ahead and hop right into it.

Hadith About Trade and Riba Al Buyu

Okay, there are two hadith that the fuqaha normally look at when it comes to trade and both of them can be found in Muslim. This first one we’re going to look at is Muslim, Hadith number 1587 and this is narrated on the authority of U’bada ibn al-Samit (May Allah be pleased with him) and he said that the messenger of Allah said, (may peace and blessings be upon him).

Gold is to be paid for by gold, silver by silver, wheat by wheat, barley by barley, dates by dates and salt by salt; like for like and equal for equal, payment being made hand-to-hand. If these classes differ then sell as you wish if payment is made hand-to-hand. (Muslim 1587)

So, right here we can see that there are six items that are mentioned in this hadith and these six items are what the fuqaha look at to derive rulings when it comes to trade and if you see that the messenger of Allah (may peace be upon him) is saying when you’re trading like for like, gold for gold, silver for silver, wheat by wheat and so on, that the trade should be equal for equal and the payment should be made hand-to-hand.

Meaning it should be on the spot trading and then he (pbuh) says, if the classes differ, then sell as you wish so long as the payment is still being made hand-to-hand. And we will take a look at what these classes are as we move along further here in this blog post.

The second hadith that the fuqaha look at his also found in Muslim and this is Hadith number 1584. This one is narrated on the authority of Abu Sa’id al-Khudri (may Allah be pleased with him) and he said that the messenger of Allah (may peace and blessings be upon him) said,

Gold is to be paid for by gold, silver by silver, wheat by wheat, barley by barley, dates by dates, salt by salt, like by like, payment being made hand-to-hand. He who made an addition to it or asked for an addition in fact dealt in riba. The receiver and the giver are equally guilty. (Muslim 1584)

Now we can see here that this hadith also mentions the same six items that we found in the previous hadith. The only addition to this hadith is the introduction of a riba. And what type of riba are we discussing here?

We are discussing riba al-buyu and riba al-buyu is trade where an increase takes place and where this increase is not permissible. Riba al-buyu is seen as haram. This ruling of riba al-buyu applies to the trade of items that fall within a particular category or class of items. Now, if you remember the two hadith that we just took a look at it mentions six items of trade.

These six items fall into certain classifications and we’ll take a look at this as we move further along in the blog post. But just know that because these items fall into these particular classes the fuqaha will take a look and see if riba al-buyu is the end result when trade is taking place when it comes to these items.

And again, we said that riba al-buyu is haram. So, what we need to do now is also see where does bitcoin come into play as it relates to riba al-buyu, but for now let’s take a look at the six items and have a little discussion on this further.

Six Items of Trade

Now here we see six items of trade mentioned in the Quran and/or hadith and these six items are gold, silver, wheat, barley, dates and salt.

Now as previously mentioned we said that the six items that were discussed, talked about, in hadith fall into two different classes and we can see what these classes are. Right here over to our left we see that we have the class of items that are measured by weight.

That being gold and silver and over to our right we can see items that are measured by volume. That would be wheat, barley, dates and salt and these are the two classifications that all these six items fall in and this is what the fuqaha will take a look at and use this as the foundation of how to make ruling when it comes to trade.

Now out of these items, gold and silver, the items that are measured by weight, these two items are seen as money; money being a medium of exchange. Over history though, sometimes salt was also used as money. But by and large all throughout history even until today gold and silver still rule and they are still seen as money

This piece of paper is normally used as trade in the marketplace to purchase an object of sale, but it’s not an item that we normally say falls under the category of being measured by volume nor do we say that the piece of cotton paper is something that’s normally measured by weight. So, what do we do with this?

The fuqaha, well, first of all, know that the- a piece of paper would normally be considered a countable item and countable items are things such as books, pens, shoes, an article of clothing, a car, a house and the like.

But the fuqaha said, wait a minute, we’re not going to look at this piece of paper that is called the U.S. dollar, we’re not going to look at this as a countable item because at one point the U.S. dollar was backed by gold and this U.S. dollar is being used as the currency of a government, of a Nation; therefore, because of that, the fuqaha have now shifted the US dollar, the US Federal note, and all [paper] currencies of all governments, they have put them in the category of gold and silver.

That category being items that are measured by weight. They have made an exception for paper currency to fall under this category and the rules of trade would apply to these currencies as such; the same rulings that apply to gold and silver.

How Do We Classify Bitcoin?

Now we introduce bitcoin onto the scene. And most people will ask, “How do we classify bitcoin?” Do we say that bitcoin should be an item that is measured by weight or do we say that bitcoin is an item that is measured by volume? Well, clearly we can see that bitcoin can be used to purchase an object of sale.

We also know that bitcoin is commonly compared to gold. Bitcoin is regularly called digital gold. We also know that, in quite a few countries, bitcoin is legal to use as a form of currency and it is even seen as an asset class and you can invest in it. We can also perform currency exchange with bitcoin. So, with that being said, clearly we can see that bitcoin should be categorized as an item that is measured by weight. 

And if this is indeed what you believe, then you would be…wrong. You would be wrong. Incorrect. In fact, at this time bitcoin does not fall into either of the two categories that scholars look at when it comes to trade which is, items measured by weight or items measured by volume.

Now some of you will say, “Well why not?” Well, that’s because our scholars have not classified bitcoin as money, and I touched upon this in the first blog post of this series, of the Is Bitcoin Halal Series.

We talked about bitcoin and how the fuqaha look at bitcoin whether it’s classified as money. Whether it’s halal or not. You can find all of that out in that blog post so if you missed it please do go and check it out, but know for now, as of now, our scholars have not classified bitcoin as money therefore we cannot say that bitcoin must follow the Islamic rules of trade.

Now with that being said, if we know that the fuqaha have not defined bitcoin as money, if we know that the fuqaha, our scholars, do not place bitcoin in the category of items that are measured by weight, if they do not classify [it] in the category of items measured by volume, then we say that bitcoin is not subject to the guidelines of riba al-buyu. Riba al-buyu applies to items of trade that fall into either of the two categories- items measured by weight or items measured by volume.

Bitcoin falls into neither therefore riba al-buyu does not apply.

Now in time this may change, but again, as of now, as of the making of this blog post, we can say that we cannot enforce the Islamic rule of trade upon bitcoin because again, one, it’s not classified as money and two, it does not fall into either class mentioned by our scholars.

So, is trading bitcoin halal or haram? As of the making of this blog post, we can say that as of today, there is no consensus amongst the fuqaha that trading bitcoin is haram. And now that we’ve taken a further look at the rules of trade, we can now see that the fuqaha do not classify bitcoin as being an item that is measured by weight or an item that is measured by volume; therefore, we can say that the rules of trade do not apply to bitcoin.

We can take it a step further and say the rules of riba al-buyu, they also do not apply to bitcoin. So again, is trading bitcoin halal or haram? We can say that, with certainty, as of the making of this blog post today, that there is no mashoor (popular) opinion, there is no consensus, no popular consensus or ruling that bitcoin, trading bitcoin in and of itself is haram.

Now let’s take a look at some basic rules of trade that apply to currency since many of you out there are involved in currency trading.

Hand to Hand (Spot) Trading

Know that hand-to-hand trading or trading within the same sittings, many times called spot trading, according to the fuqaha, this is permissible; not only permissible, but it is actually a requirement when it comes to currency trading because currency falls under the category of items that are measured by weight.

Now when it comes to the time period that is allowed for trading hand-to-hand, for spot trading, for trading in the same sitting, the fuqaha say, up to 48 hours is allowed to conduct the trade. If it falls within that time period it is considered a halal trade and a person may say, “Why are we given 48 hours? Why are we given so much time?”

The reason being is because the fuqaha realize that nowadays people live all over the world and we have people that live in different countries exchanging currency with one another and it might be that the person who lives in England is conducting trade with someone who lives in Saudi.

And it might be that the person in England, when they initiate the trade, the bank is open, but for the person in Saudi the bank is closed, or it might be vice versa- the person who initiates the trade in Saudi the bank may be open there, but in England, the other person who has the bank account in England, that they’re conducting trade with, the bank there is closed.

So, the fuqaha realize that time must be allowed for business hours to be open where the trade can be conducted.

They also realize that trade nowadays is done over the internet and different software applications are used to conduct trade and it might be that the software application will say that, your trade will be complete in 45 minutes, or it might be complete in one hour or it may take 15 minutes to complete.

So, the fuqaha realizing this say, well, you are given up to 48 hours to conduct your trade and this will be categorized and classified still as hand-to-hand trading; trading that is done within the same sitting or what is also called spot trading.

Short Selling and Futures Trading

Now when it comes to short selling the fuqaha say that short selling is haram. They say that it is haram. Why? Because many people who engage in short-selling, when it comes to currency, the trade is being conducted while the person does not have complete or full possession of the currency and the fuqaha say that you can only trade what you have when it comes to currency trading.

You must be in full possession of the currency before you can actually trade it and many times when it comes to short selling this is not the case; therefore, the fuqaha say that short-selling is haram.

Now what about futures trading? This is the same thing. You are initiating a trade now but the completion of the trade will not take place until a future date. It might be one month from now. It might be 6 months from now. It might be one year from now.

You’re conducting currency trade where, again, the trade- you will exchange the item of the currency far out, in a far future date. The fuqaha say that this is considered haram. You cannot do this. You cannot do this.

Again, the trade must be conducted hand-to-hand, spot trading, in the same sitting and you are given an allowance of up to 48 hours to conduct that trade and doing so within the 48 hours is deemed permissible. 

Binary Options

Now what about binary options? Now, I’m not going to explain in detail what binary options is. As a matter of fact, I’m going to share with you a link to a video (The Truth About Binary Options) that does an excellent job of explaining what binary options is but know that binary options basically is a form of gambling.

Binary options is basically a form of gambling and gambling is haram; therefore we say that binary options is haram because it is like gambling. Now if some of you out there can prove to me or show me that binary options is not gambling then please do leave comments in the comments section of this blog post but from everything that I have seen binary options is gambling and gambling is seen as haram.

Conclusion

And that will do it for today when it comes to bitcoin and trading bitcoin and what the sharia has to say about trade as it relates to bitcoin. Insha’Allah I was able to bring some clarity to the matter.

Hopefully you leave here today with a better understanding of how digital currency, how bitcoin works as it relates to the sharia in particular when it comes to trade. So now we’ve talked about currency and we’ve talked about trade and the third topic that we’re going to get into is bitcoin mining. Is bitcoin mining halal? Is it haram?

What are some things that you may want to think of and pay attention to if indeed you are thinking of stepping into bitcoin mining. We’re going to discuss that in our third blog post that will be coming up soon enough insha’Allah.

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Assalaamu Aleikum and welcome to the first blog post of our new, Is Bitcoin Halal Series. Part 1 of our series will take a look at money.

Is bitcoin classified as money in Islam?

Even though bitcoin does have all of the characteristics of what is considered money in Islam, at the time of writing this blogpost, there is still no consensus among the scholars that bitcoin is money. I believe that this will change.

But is bitcoin money? Does it spend like money? What is money in Islam? Watch the video below or read the video transcript below to see why I believe that bitcoin should be classified as money in Islam.

Video Transcript

As-salamu alaykum! And thank you for joining me for today’s blog post here on Islam and Bitcoin. And today’s blog post is the first blog post in a series of blog posts. A series that we are calling Is Bitcoin Halal Series.

Now, as many of you know, I posted a blog post sometime back called Is Bitcoin Halal? And we talked about Bitcoin in Saudi Arabia, Bitcoin mining. We touched a little bit on all those things.

Well, this blog post, in this series for that matter is an update to that. Now that I have finished my first round of studies with Islamic Finance, I wanted to share with you what I have learned with the hopes that it will be a benefit to all of us.

Now, keep in mind that as we go to this series keep in mind that this is not meant to be a fatwa (opinion from an Islamic scholar or Islamic body of scholars) series. I’m not here giving a fatwa. I’m not a big-time mufti (a Muslim legal expert who is empowered to give rulings on religious matters). I’m not some big-time sheikh (scholar).

I am simply a student of knowledge sharing with you information that I have learned from my teacher and other scholars that I have taken knowledge from, again, with the hopes that we all find benefit from it.

Also, another thing I would like to add is, in Islamic Sciences when we study a particular topic, we know that there are always differences of opinion. So, it maybe that what I study from my teacher or some of these scholars I’ve taken knowledge from, it might be that, they say one thing but you look at another scholar and they have a difference of opinion.

And alhamdulillah, it’s all good. This is the nature of things within the Islamic Sciences so nothing wrong with that. I just wanted to put that out there to make sure that we’re all on the same page moving forward.

So, with this, first blog post, we’re going to take a look at currency. Now, why currency? The reason why we’re going to look at currency first is because this will lay the foundation for us as we move further into the Is Bitcoin Halal Series. So, we’re going to look at things at bitcoin mining, trade, investing and at the heart of it, at the foundation of it is money. So that’s why we’re going to talk about it first.

Now, when people think of Bitcoin, what do they think of? They think of money. They either think of spending bitcoin as money. They think of trading bitcoin to make money or again investing in bitcoin at the end, to do what? To make money.

So, money is the reason why a lot of people are really interested in Bitcoin. So, this first blog post, we’re going to look at currency and money and what Islam has to say about money and then take a look at how it all relates to Bitcoin. See… or rather see, how Bitcoin relates to the sharia.

Now, with that being said, when it comes to currency, there are three questions that we’re going to cover today. Three questions that people normally ask when it comes to money as it relates to the sharia. I’m going to highlight those questions.

I’m going to highlight those questions. We’re going to look at it, explore it to some degree, and at the end of this blog post, at the end of this video here, we’re going to wrap things up and see how this will help us move forward when it comes to understanding Bitcoin as it relates to the sharia.

Our hope is to now start delving in a little bit deeper in understanding this new technology as it relates to sharia.

So, without further ado, as they say, let’s take a look at the first question right now. Let me pull up my notes as we hop in to the first question. Here we go, all right. So, let’s take a look at the first question, right now.

What is Money in Islam

Ok, so let’s take a look at the first question here, again, going back to my notes. The first question being, “How does the sharia define what is a currency and if that currency is permissible to use?

Well, it’s really easy. The fuqaha (body of scholars) define money as the following- They say money is a means. Money is a means used to purchase an object of sale. Again, money is simply a means used to purchase an object of sale. How do they define currency? Again, really simple, they say currency… currency is what is commonly used amongst the people to purchase an object of sale.

So, now we have to look at Bitcoin and we have to ask our self to follow a question. When we look across the world, is bitcoin commonly being used, is it commonly being used by the people to purchase an object of sale? And the answer is yes.

Yes, it is. We can clearly see that bitcoin is being used to purchase things like airline tickets. It’s being used to purchase coffee. It’s being used to purchase pizza. Some people even get paid their salary in bitcoin and depending on what country you live in, people are even paying their bills in bitcoin. So, we can see that, yes, people across the world are using bitcoin to purchase an object of sale.

Now, somebody might say, well, that’s great. That’s great Andre but what I want to know is when is currency or money haram? How does the fuqaha define money that is haram? How do they view haram currency or haram money?

Well, it’s really easy. The fuqaha, what they do is they take a look at the object. They take a look at the object that is being used for money, that is being used for currency. Now, let’s just say in your marketplace where you live, people are using a bottle of wine, alcohol, khamr (literally means covering. Commonly referred to as wine or intoxicants), khamr meaning alcohol. If where you live people are using a bottle of wine, the fuqaha would say that this is haram. It’s haram. You cannot use a bottle of wine as currency.

So, what does this mean for bitcoin? Bitcoin is clearly not a bottle of wine.

But what is bitcoin exactly? Bitcoin is nothing more than digital characters. Bitcoin is nothing more than digital characters and digital characters in and of itself is not haram. We can’t say that digital characters is haram. So, right now, again, we’re seeing that bitcoin seems to be falling in line with the sharia and the fuqaha defined as being money.

But wait, let’s not jump to conclusions just yet. There is one other aspect that we need to explore in order to see where bitcoin falls into this whole definition of money as it relates to the sharia.

Now, remember I said that the fuqaha said that when it comes to currency, they say that currency is what is commonly used amongst the people in order to purchase an object of sale. Now, the fuqaha, when they say people, they define people as, government.

They define people as government. So, not like you and me. So, you and I, we just can’t walk up into the marketplace and say, “Hey everybody! Today we’re going to use marbles and rocks. Marbles and rocks as currency. This is what we’re going to use today and let’s just call that, let’s call it a day.”

The fuqaha will say “Hey, slow your roll. Pull back on those horses young man. That’s not what we mean here when we say people. We’re not talking about you. We are talking about the government.”

So, the next question that we have to ask our self is the following. Is bitcoin used across governments worldwide as money? Meaning is it legal in governments across the world to use bitcoin? The answer is yes and no. Yes and no.

So, if you live in countries like the United States, Canada, UK, Germany and some other countries, then yes, it’s legal to use bitcoin. But if you live in some other countries, there are some other countries where it is not legal to use bitcoin.

Now, what I’m going to do is I’m going to share with you an article. I’m going to post it in this blog post, an article that I want you to take a look at. It is written by a Muslim sister. It’s a wonderful article (These Are the Top Countries Where Bitcoin Is Legal and Illegal) and I highly suggest that you check it out.

This article- she highlights the countries where it is legal to use bitcoin and illegal, meaning you cannot use bitcoin in these countries. She has written a wonderful article on this and I highly suggest that you take a look at it. I mean it would help you begin to see where you live- where you live, if bitcoin is legal or illegal to use. All right?

So, in this first question, now that we’ve taken a look at bitcoin and we see how is it that bitcoin relates to…how we can relate it to money as defined by the fuqaha, as defined by the sharia, this is now helping us begin to have a deeper look at this.

And we’re seeing that generally, bitcoin does seem to lend itself to how the fuqaha define money. However, there’s another question that comes up regularly when people talk about currency and what is permissible to use as currency and how you define currency. So, we should take a look at that second question. Let’s take a look at that right now.

Currency Backed by Commodity

All right so question number two that people normally ask is, “Does the sharia require that currency needs to be backed by a commodity such as gold, silver, oil, etcetera in order for it to be permissible, in order for it to be permissible to use?” The simple answer is, no.

No, it does not. Now, this is something that I find fascinating because you’ll read– I saw– I’ve seen articles out there where people sincerely and do believe that money has to be backed by a commodity. “It’s got to be backed by gold, brother. It’s got to be backed by gold. If it’s not, it’s not considered legitimate. It’s considered haram.”

Well, according to my teacher who I’ve studied with and other scholars who I’ve taken knowledge from, they said this is actually not the case. Money doesn’t need to be backed by gold, silver or any commodity whatsoever.

Money is simply an object. It’s simply a means used to purchase an object of sale. It doesn’t need to have any intrinsic value. It doesn’t need to be backed by anything.

There’s a really good article and again, I’m going to include this in the blog post it’s called, The Concept of Money in Islamic Finance, (correction: The Concept of Money in Islamic Economics) written by a brother and I do highly suggest that you check it out. But you know short answer is does money need to be backed by any commodities such as gold and silver and the like? The answer is no.

Is bitcoin backed by anything? No, but it doesn’t need to be so we don’t necessarily need to factor that in when we are looking at bitcoin and other digital currencies like it, looking at it to see if it qualifies as money according to the sharia. So again, simple answer is, no, it does not need to be backed by any commodity whatsoever.

Now let’s take a look at the third question because there’s still yet another question that comes up where people are like well… well, what about this question? What about this? So, let’s take a look at our third and final question right now.

The Production of Money

All right. So, our third and final question that we’re going to look at in this first blog post is the following- Does the fuqaha place importance on how the currency is produced in order to determine whether it is permissible or not?

Meaning, does the fuqaha look at whether the money comes off of a printing press, or do they look to see whether the money was created by physical labor or do they look to see if the currency or the money was produced by a computer? Do they look at all of these factors to determine whether it is permissible or not? And the answer is, no.

According to who, again, my teacher who I have taken my knowledge from, the answer is, no. Again, they simply look at the object.

So, take for instance, this right here. What is this? This right here is a US bank note. It is a $10 United States bank note. And what is this? This is simply a piece of cotton paper. That’s all it is. It’s cotton paper. Cotton paper in and of itself is not haram. It’s not haram.

This piece of paper has numbers on it. It’s the color green. It has a face on it. It has some writing on it. But in and of itself, all it is- it’s a piece of paper, cotton paper. And this in and of itself is not haram. It’s not haram. So, what does this mean for bitcoin? Remember, we talked about this already. What is bitcoin? We said earlier that bitcoin is nothing more than digital characters. Digital characters in and of itself is not haram.

So, when we take a look at these three questions, this now is allowing us to see how bitcoin falls into the definition of money according to the sharia. So, let’s do a quick wrap up to put it all together, Ok? Let’s do that right now.

No Consensus that Bitcoin is Money

All right, so someone is going to watch this and say, “All right, brother, I heard everything you just said so wrap it up for me. What does this all mean? Can I use it? Can’t I use it? What’s going on man? I just want to know, can I use it or not?”

All right, so as a wrap up, we understand that bitcoin so far is being used as money. So, we said in this blog post that bitcoin is currently being used worldwide to purchase an object of sale which so far checks off one box in regards to permissibility in Islam.

The second thing is we do know that some governments permit it to be used but some governments do not. So, some governments, yes, other governments, no. All right?

Third thing is we understand that bitcoin does not need to be backed by any commodity in order for it to be legitimate.

And we also talked about saying that the fuqaha they do not look to see how the currency itself is being produced in order to determine whether the object that’s being used or that currency is haram or not.

So, generally speaking, we can say that bitcoin is neatly falling into the package. Or falling in harmony into what we can consider money as defined by the sharia. But what did the fuqaha say about this? What did the fuqaha say? Because even though we can see this, we need to, we need to hear from our shuyukh (religious scholars), we need to hear from the fuqaha to see what is their take on this.

Believe it or not, even though we can see that bitcoin, again, does fall in line, in harmony with what the sharia defines as being money, the fuqaha, across the board, I have not seen, I have not seen a consensus or a decision across the board where the fuqaha actually classify and define bitcoin as money.

So, as it stands right now, the fuqaha have not classified bitcoin as money. And if you find somewhere where there’s either one scholar or a shura (a consultative council). A council of scholars that classify bitcoin as money, please let me know because I haven’t seen that. And what does that mean?

Some people might be scratching their head and say, “Wait a minute. You just said that it does XY and Z. People spend it, it doesn’t need to backed by gold, some governments find it permissible to use, you don’t need to worry about how it was produced, they’re not looking at that. You just said all these things brother, so what do you mean that the fuqaha they don’t classify it as money? Why not?”

Well, here are some of the reasons why. Let’s talk about that right now. First and foremost, let me take a look at my notes again. Ok, first and foremost, the reason why, again, goes back to the volatile nature of the pricing of bitcoin.

And the reason it is so volatile is because the fuqaha say that the market for bitcoin is speculative. It’s highly speculative. It’s a highly speculative. And because of this, the prices just go up and down and so drastically and I would agree with this. I think there are many people who are looking at bitcoin as a vehicle to make quick money.

So, you got people coming in and out of it, how can I make like a quick buck, how can I make fast cash? How can I make money? I want to make quick money get in, get out and that’s all I want from it. There are some people out there who don’t care. They’re not looking at bitcoin as the potential of how the technology of Bitcoin can be of benefit to humanity at large and there are people who don’t care; Muslims and non-Muslims alike.

There are a lot of Muslims out there who are simply hopping in and out of bitcoin to make money. There are a lot of Muslims who don’t care whether this can help humanity or not. They don’t care. They’re like, “I just want to make money. That’s all I’m concern about making money. If it benefits someone else, great, if not, whoopty doo, whatever, I want to make money.”

So, the fuqaha say that right now it is highly speculative and they don’t really view it as something that is really stable right now. So therefore, they’re hesitant. They’re hesitant to make the ruling in classifying it and calling it money.

Now, the second reason is because of the market capitalization of bitcoin. Heck, the market capitalization of all digital currencies as a whole. Now, what do I mean by this? If we look at bitcoin at today when this video was being made, the market capitalization of bitcoin sits around $40 Billion plus. It’s $40 Billion plus. That’s just what it is right now.

The fuqaha will say, when you compare this to the money that circulates the market worldwide- we’re talking about trillions of dollars. Trillions! 40 Billion? They look at it like, 40 Billion? That’s nothing. So, the fuqaha will look at this and say, “That’s nothing. That’s a drop in the bucket.”

Heck, we can look at Forbes magazine and see that Bill Gates, I think one time I looked and it said that Bill Gates, the net worth of Bill Gates was 52 Billion. So that means that one person in the world has more wealth than the entire marketplace of bitcoin.

Meaning the pool of money that sits in the marketplace, bitcoin. The value of it only comes out to 40 plus Billion dollars. And the fuqaha, some of them will say, “Well, that’s just simply too small. It doesn’t really make a dent in the world economy. It’s not really making a dent in the marketplace right now.” So, this is why they have been hesitant to give the thumbs up in saying that it is money.

The third reason that some of the fuqaha again, another reason why they’re hesitant to classify it as money is because some fuqaha will say, well, they don’t like the system in which bitcoin is being used. And what do they mean by that? They mean that bitcoin, they see it as being used for illegal activity.

They may say, “Well, bitcoin seems to be mostly used for crime, maybe buying drugs, maybe prostitution, a whole number of schemes that is just illegal and just flat out haram.” So, we know when bitcoin first came on to the scene, if any of you remember, there was this whole big thing about Silk Road and Silk Road was this one underground website where people were using bitcoin for all these nefarious, shady criminal activities.

Well, a lot of the fuqaha, I can’t say a lot of the fuqaha, but some of the fuqaha look at that and it makes them hesitant to classify this as money.

Now, with that being said though I think we are actually at a place now where I think bitcoin is now sort of coming out of that negative image. As we said earlier, people are using bitcoins in buying airline tickets. People get paid their salary in bitcoin.

They’re buying their groceries. They’re buying candy out of a vending machine with bitcoin. So, bitcoin has now, I think bitcoin has evolved to that place where people realize that people just don’t use bitcoin for haram or illegal activities.

Bitcoin is used for very legitimate purposes and we can even take that a step further. We now see that there are governments out there. Let’s take a look at the United Arab Emirates, for example. Take a look at the Emirate of Dubai.

The Emirate of Dubai is now utilizing the technology behind bitcoin. They’re looking to implement this technology into their government agencies in order to make things more efficient with their government services.

We can take a look at places like China. China is now implementing Bitcoin technology or blockchain technology into their banking system. And we also see that this is being done worldwide.

So, I think the latter reason where some of the fuqaha will sort of look at Bitcoin as some kind of criminal tool for criminal activity, I think we can kind of say that we’ve kind of moved beyond that right now. I think that’s safe to say- That’s safe to say.

So, what does this mean? All in all it simply means that bitcoin right now is not classified as money. Now, does it fit the guidelines according to the sharia as how the sharia would define money? Yes, it does. It actually does.

And there may come a day when the fuqaha do categorize it as money. But as of today, they do not. So, you might say well, ok well, is it permissible for me to use it or not? Well, one of the good things is this, the fuqaha have not said that Bitcoin is haram.

Their approach tends to be more of caution. If you’re going to use this, be cautious. And if you’re going to use this, pay attention to the laws of the land where you live in. Pay attention to the laws of the country where you live in. So, if you live in a country where Bitcoin is legal, Ok, alhumdulilah, we’re not saying it’s haram. You can use it but be cautious.

However, if you live in a country where the law of the land says that Bitcoin is illegal, then leave it alone, leave it alone. I highly suggest to anyone if you’re looking to step into using Bitcoin, pay attention to the laws of the country where you live in. You don’t want to get yourself in trouble. You don’t want to get yourself in trouble.

But again, as a wrap up, the fuqaha have not classified bitcoin as money, however they haven’t ruled it as being haram. They haven’t ruled is as being haram. It’s more of use it but with caution. Use it but with caution.

So, this is going to wrap up the first blog post we have in the series that we’re calling Is Bitcoin Halal Series. And this first blog post dealing with currency now lays the foundation for us to explore and understand better how we look at things like bitcoin mining, trade and investment. All right? So that is going to do it for today with this blog post.

Again, I always say if you found any benefit in this whatsoever, all benefit is from Allah, Subhana Wa Taala. Any mistakes I have made is all from me and I ask that you make du’a for me. I always say that if you found benefit in this, then share.

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So again, I wanted to thank you for checking out this latest blog post. I hope you found benefit in it. And as always, I leave you in the way that I greeted you, As-salamu alaykum wa rahmatullahi wa barakatuh ma’salama.​