Is cryptocurrency Haram in Islam?

[farishta]

I see some fatwas and also some videos of scholars saying ‘CRYPTOCURREY IS HARAM’

I’m not a trader, but am an airdrop farmer. I do crypto airdrops, testnet etc and then the project gives us some % of their tokens total Supply. In my opinion, if the project is not gambling and it’s not using haram things and hasn’t allowed Riba (interest) then it’s Halal. But the main thing is, If the CRYPTOCURRENCY is not HALAL then how can airdrop be HALAL?

Please answer my question with detailed explanation, I’m so confused. Jazakallah!

 

[i_labyu]

@farishta i have searched around this topic alot and here is what i found

there is mainly 2 school of thoughts

those who outright ban all of them

they ban cause of either direct causes of the Coin itself, like the project

or indirect relations, like their effect on governments and society , and they are not yet widely accepted among humans, among other reasons

those who says Halal

but only when under certain contexts, which is subject case by case to each individual coin

in my heart, i follow the second case, i usually check 2~3 websites, if one of them say a coin is Haram i dont buy

 

[gape3434]

@farishta If cryptocurrency is haram, then US Dollar is more haram than cryptocurrency.

 

[wantingtobehis]

@gape3434 Literally all of Fiat is haram in that case haha , all based on interest and debt

 

[santana27]

@gape3434 I keep seeing this argument but I don’t really understand what it is based on. Can someone explain it to me? Why would fiat currencies be haram?

 

[gape3434]

@santana27 USD is created out of nothing and infinite. Jerome Powell can print as much as he wants. Taxes are a psyop to make believe our money goes into welfare, and to keep us poor. All welfare state programs rely on the printer. USD has no upper ceiling, every 3 months, we create $1T of debt, where do you think that money came from, nowhere. And the US gov can owe infinite amount of money, because FED is the US gov.

Gold needs to be dug from the earth, is finite and cannot be minted or created out of base metal.

Bitcoin is finite, miners ( like gold ) need to spend energy to solve cryptographic puzzle to create it. Complexity keeps increasing, which means more ans more energy is required to create Bitcoin. Check Bitcoin halving where block rewards get reduced by half for miners, so every 4 years they have to “work” twice as much to create Bitcoin.

Ethereum is deflationary, which means the supply keeps decreasing, not increasing. Its supply gets burnt or destroyed. Imagine gov burning USD, thereby decreasing supply, and therefore increasing value of USD holdings because of scarcity.

Any other crypto currency, that satisfies USD, is at least as haram as USD, not more.

 

[onestrongwriter]

@gape3434 Do you see the US dollar as a speculative and volatile asset that you buy in hope of a lucky profit as in gambling?

 

[simplymeandhe]

@onestrongwriter Yes, it's called FOREX and stock options etc..

 

[onestrongwriter]

@simplymeandhe Those are haraam. USD is mostly used for buying and selling material goods which is the halal and mainstream use of the currency. Why choose a specific ad-hoc non-general use of the USD to equate its general nature to that of cryptocurrencies? Is that a fair assessment in good faith?

 

[simplymeandhe]

@onestrongwriter You're trying to make a knife haram because people can kill with it. Just like the ottomans deemed the printer haram because people could fake Quran with it. Bitcoin is like any fiat currency, how people use it is not an innate characteristic of the currency, you can use it to hire hitmen, you can use USD to hire hitmen. You can use it to hedge against inflation, you can use gold to hedge against inflation, gold has a cycle just like bitcoin, gold goes down and get lows then goes up and get new highs, the same for bitcoin, why is it halal to trade gold but haram to trade bitcoin? If I told you gold these days is used mainly to fund Russian army and black market weaponry would gold be haram? Or using gold for this is haram? Matter of fact gold's usage outside trading and hedging is significantly small, it has trillions of dollars as capital and maybe like 20 or 30 billion as industry usage or using it for jewelry and fashion, and it as a commodity is extremely volatile as well..

If bitcoin is haram because it can be manipulated, well the US stock market is heavily manipulated and mainly it's because the FIAT nature of the USD..

USD is heavily used in trillions for the US government debt which is the leading growth factor of the US army that fucks the earth up, it's so easy to think that the USD is mainly used for normal day to day buying and selling without factoring in the HUGE AMOUNT OF USDs that are running in the US to just fuel the US army structure, and the USD is designed for that.

 

[onestrongwriter]

@simplymeandhe You are not listening. I'm telling you that you're making a false equivalence. A Bitcoin is not haraam. It's just data. Trading Bitcoin might be haraam because its volatile and speculative nature is akin to gambling. See the difference? Approach topics in good faith. Buying goods with Bitcoin, USD or grass is not haraam per se. Don't make a strawman argument.

 

[simplymeandhe]

@onestrongwriter I'm missing something? The question is about bitcoin is it halal or haram, is it about trading? I personally neither have bitcoin nor is actively trading bitcoin so don't worry about the good faith part.

On the trading part now, what's the difference between speculation and volatility of trading gold, and speculation and volatility in trading btc? Or even trading a stock? What's the telling difference that makes one or many of them haram? Or are all of them haram?

Like I personally wait gold cycles to sell and buy gold, is it haram? I see the same cyclic pattern in BTC, tech stocks, semi conductors and other cyclic assets.. so is all of this haram? Or is it just trading?

 

[onestrongwriter]

@simplymeandhe The question was about an unspecified cryptocurrency. My initial comment was questioning the false equivalence someone made between cryptocurrencies in general and a fiat like USD.

Currencies like USD are mainly used to acquire goods, and not mainly as a speculative asset for futures trading. Which is already a significant difference.

The differences between most crypto and assets like gold are at least twofold: 1) Gold has intrinsic and utility value in the present. 2) Gold is not highly volatile (or to be technically accurate has low volatility). This is why investing in gold cannot be gambling per se. This is important because the reasons why any financial move can be haraam are: usury, gambling and buying haraam goods (alcohol, drugs etc).

My point was not that "crypto are haraam". The point is if a crypto doesn't have intrinsic and utility value (e.g backed by actual goods) then its nature is basically determined by use. So some crypto can be speculative assets, some can be Ponzi schemes, and others can be just money. So you can't tell whether dealing an unspecified crypto is halal or not.

Investing in Bitcoin is not haraam per se. Dealing in Bitcoin or stock or other halal assets could be haraam if using any haraam financial move akin to usury or gambling like futures/options/margin.

 

[simplymeandhe]

@onestrongwriter Bitcoin in its own can buy and sell you goods just like USD, and can be used in a speculative manner just like USD in forex, and even just like timing gold rallies and gold dumps. And I argued above that the use cases for USD as stock trading or forex is by far huge. You just dismiss it because to everyone it's just some random number on the news, but you go out and see everyone buying goods with the USD. This is not the case.

Gold is volatile, extremely volatile some times too, and its cycles are becoming increasingly difficult to time and expect, I've been trading gold for a while now.

Trading in general has gambling element to it, else if everybody saw what is coming next no one would gain profit. And retail investors never have any insight or insider info. Like take the last gold rally, no one saw it coming, who knew the Chinese after 3% deflation will go and hoard gold? I don't think alot, and whoever was buying gold got lucky, and now people wanting to buy gold waiting for a correction are gambling, no one know where and when will this rally end so if I buy gold today, I am just trying my luck.

I agree that pump and dump shit coins are pure ponzi schemes, but BTC is starting to behave just like gold with little more hype, heck, even gold now is having attention like never before.

I think what haram gambling is, is just trades that leaves you with nothing after your bet is lost, like options or futures, because the value of the contract is nothing. But let's say you bough gold with 1300 usd/oz and you think it will go to 2000 usd/oz but you bet wrong and it went to 1000 usd/oz, you still ended up with the gold you bought, same for bitcoin, but not the same with options/features. Because your contract will be void and you will end up losing money without an asset.

But let's say I bought BTC when it was 16k USD and sold it when it's 70k USD, it's just like when I bough gold when it was 1300 usd/oz and sold it when it was 2300 usd/oz.. And gold and btc both can buy and sell you good, and both have value.. Gold's value is seriously just a hedge against inflation, and btc is trying to be like that. So what makes the first transaction haram and the other halal?

 

[onestrongwriter]

@simplymeandhe You're right, gold is volatile. Just incredibly less volatile than Bitcoin.

I think you make a valid point. But just for the sake of clarity, all uncertainty is not gambling. As you point out yourself. What you call haraam gambling is in fact the definition of gambling: when you're paying for an asset of no intrinsic nor utility value and in hope for a payday (and of course gambling is haraam). What you meant to say was that all trades involves risk. And that's right.

As I said, investing in Bitcoin or some other cryptos is not necessarily haraam. For those reasons. As long as it's acquired via halal transactions. If it has history and uses that have proven a utility value as an asset or tool. This is very important. For any unspecified crypto you can't say the same. While gold has an intrinsic value (it's material + you can literally use it without selling it), the same can't be said for a random crypto asset e.g shitcoins. So how would you characterize the action of buying a value-less coin (no intrinsic, nor utility value) while hoping for a payday ? It's the same as buying casino chips or lottery tickets, effectively gambling.

 

[princesst1]

@simplymeandhe

Just like the ottomans deemed the printer haram because people could fake Quran with it.

That is NOT the reason the printing press took decades to implement. Who told you that lie?

 

[simplymeandhe]

@princesst1 Why was it banned thought?

 

[princesst1]

@simplymeandhe Simply, the debate between diffusion of knowledge based on memory vs written books, and a whole industry destroyed with thousands left with no work thereby crippling the economy.

did you know then started allowing books of knowledge (not the Qur'aan) to be printed the copyists held a mock funeral to denote the death of their profession.

Further reading:

https://www.dailysabah.com/feature/...bout-the-printing-press-in-the-ottoman-empire

 

[simplymeandhe]

@princesst1 I think it was much more problematic than that, I recall I read somewhere the sultan even sentenced people to death over it.

Check this video:

 

[didigetitwrong29]

@gape3434 This tbh