Topic: Islamic Bank of Bitcoin{}بنك بتكوين الاسلامي - page 28. (Read 112785 times)

I loved the concept.

Too bad I dislike the name.

I think it would be nicer something like Yahwehists bank.

Or Abraham sons bank.


Since the rules actually apply to Jews, Islamists and Christians too. (at least, it should apply... but :/)

I have not reviewed the entire Jak concept but a cursory glance at it makes sense. The longer a member has had a savings deposit with the bank the more available loan credits they are entitled to. Is this the general premise? I will review the entire concept a little later but it looks promising.

I have been thinking of another way to encourage loan repayment and community/bank participation and subsequent trust reward but I have to think it through a bit more before I post it here.

@senbonzakura I can send 3 BTC now of my conditional 10 BTC pledge if you would like. I would just consider it lending you 3 BTC for the moment at 0% interest until you get the shares/etc worked out and convert it into shares. You can use it for expenditures as needed and if the project dies I will accept a shared loss. If you have another proposal I am open to it.

If you want me to send 3 BTC now please post an address I should send to publicly here on this thread to make such transaction transparent.

If i may jump in with an idea on the "reputation/risk" side... from the JAK Bank http://en.wikipedia.org/wiki/JAK_members_bank

They have a wonderful "self-rating" system:


I think this model could work excellently for your project as well, members who have deposits for a longer time generate more points than someone who has deposited only little or for only a short time. And can therefore be more trustworthy because they had put trust in the system in the past and can borrow more. Also interesting is the "Aftersavings" concept.

For the record, i'm interested in investing in this project, once there is a clear model/infrastructure to operate it.

"Okay, let's say I get a loan from IBB. Am I free to buy myself a beer?"

No , you can only buy pepsi.

 

Just joking, yes you can buy what ever you want, its your money.

Okay, let's say I get a loan from IBB.
Am I free to buy myself a beer?

Imagine though if you didn't have to trust, or even know the person you lent the money to, and didn't care about their reputation at all. You could achieve that by creating bitcoin transactions that paid the correct amount back to the investor, based on something like this:
http://forum.bitcoin.org/index.php?topic=6900.0
Possibly with the "referee" being a piece of software instead of a person.

Interesting idea, i'll keep an eye on this

I still don't have a full grasp of how bitcoins work, but it seems to me like integrating some of its "contract" functionality would work here. If you created bitcoin transactions (similar to the ones described in the betcoin thread) that were tied to the accounting of the lender, then payment back to rabb-ul-mal could become more automatic.
So lend the money at 0%, but have the loans bitcoins tracked through software and conditional transactions that paid back the appropriate amounts to both the investor and mudarib.

Just lending out money over the internet at 0% interest with nothing but faith in your fellow man as collateral seems like a bad idea to me and my atheist sensibilities.

Good idea I am interested in Bitcoin banking

Watching this thread. Will chime in when I've read more into islamic finance. Sounds great though.

Yes, I would invest/buy shares, not interested in operating it, however I have a condition. I would want to get to know and feel comfortable with the operator of the project pretty well. If it was yourself then I would not hesitate to invest. If someone else comes along that would operate it I would need to get a good feel for their principles and background before investing.

So tentatively/initially I would invest ~10 BTC but it would be contingent on who is the operator and whether I feel comfortable with the operator. You could list it as a conditional pledge if you wish.

Yea, that is what it seems like. I suppose there is only a certain select few who would get the reason for such a loan (lend). Folks that don't understand the principles behind such seem to think there is a catch. I felt it would have been a waste of my time to try and convince the borrower otherwise so I didn't bother.

Trust me, some will refuse a 0% interest loan.

http://forum.bitcoin.org/index.php?topic=4946.msg79764#msg79764

I pledge 2 BTC if its implemented in right spirit

More will come as the idea progresses

Sharing in the profits (and loss) would certainly demand responsible banking.

What would you expect from a more than 1000 years book? Rules adapted to the current society? That's why you either "interpret the book" at your convenience (most christians do that) or you build a workaround which is purely artificial (like the muslim banking).

If you work at a place such as a convenience store which sells alcohol, then its ok, because you dont own the shop and your not selling the alcohol the shop is. Ofcourse then you could say the profits from sale of alcohol would go towards your salary, if you feel uncomfortable and you are religious then you could work somewhere else, if staying because you need the job then in my opinion its ok. If you own the shop and you sell alcohol then yes you are in violation of shariah.

Muslim follow the laws in the quran. Allah would be unhappy with us if we dont follow the laws he gave us. Even if both parties are fine and happy with the interest on loan, god would be angry/punish you for violating his laws.

""how will you compensate for loans that default ? If you don't charge anything for lending out money your net result will be negative.""

The borrower only needs to pay back the amount owed to the lender, but the borrower can choose to pay the lender a small amount of money to serve as a gratuity. Its just an idea for the islamic bank, we wouldn't give away like 20 btc or 100 btc , small amounts less than 10 say 2 btc or 5 btc. These interest free loans is there to attract customers and also give back something to the bitcoin community.

""how will you compensate for loans that default ?""

I was thinking maybe at first when the bank is new and growing, you must be a member of this forum and have at least 100 or 200 posts (or ebay feedback?) and be on the good list. So at first maybe give away a total of 20 btc -> 2 btc to each customer. They would pay back after 1, 2 or 4 weeks. Once the btc is paid back, it will be available again to other customers to use. To compensate , we could have ads on the website which would help, if customers visit the site for loans, they see/click ads, which would mean revenue. Hopefully they wont default, revenue from other services/sources will be profit direct to the share holders as dividends.

Again all this needs to be discussed further and its not concrete.

""and i do know that todays modern "Islamic Banks" (are not Islamic at all) those banks "resell properties at a premium for longerterm periodic payments" making it equal to usury (but on paper they can say "hey we're 100% Sharia we don't charge interest!")""

yes, islamic banking is recent/new, most muslim countries have conventional interest-based banks, the above 'could' be considered unislamic. Many islamic banks say they are 100% shariah but they aren't. In my case the bank would offer 0% fee 0% interest on loans. They probably are 90% shariah based, that is they dont deal in pork/alcohol etc.. but other products/services such as the above COULD be deemed unislamic.

""But it gets complicated, you plan to offer this service to anyone ? (some anonymous person can request an investment in a project, commerical or consumer) ? I think this seems like a very risky business. How will you deal with reducing fraud/abuse ?""

It was just a suggestion i put forward and needs to looked upon further. As I said earlier , be established in the forum, 300+ posts? show us the business plan / project and how much btc you willing to put in, then IBB (islamic bank of bitcoin) will decide if the project has potential and invest accordingly.

While your question was addressed towards senbonzakura, i feel competent enough to answer it as someone who has studied all of the 3 religions that build on the same idea. (before you read further keep in mind i consider myself a free-market anarchist, not a anarcho-capitalist there's a big difference i shall not go into now).

The problem that those 3 religions is trying to solve is human greed. Under that philosophy it does rightly condemn interest, for the reason that interest places the "haves" infront of the "have nots". If you read the books of ANY of the prophets (including Jesus who is by Muslims considered one of the greatest prophets) the points is to equalize humanity towards singularity and the best way to do that is of course. To tell the haves to share rather than accumulate more wealth. From a humanitarian-philosophical perspective this makes perfect sense, from a capitalist perspective it doesn't (that's because capitalism leads to greed which is incompatible with any of the 3 religions).

My bottom line on this issue is this, if you want a monetary singularity (For which bitcoin has a great potential) you don't want debt based banking, what you want instead is investment based banking. Investemnts makes everyone enjoy the fruits of speculation, debt on the other hand only allows the lenders to enjoy the fruits (because they set the premium).

For the record, i'm not a religious person, i'm trying to be a spirtually good person but i'm religiously opposed to religions (with that said i have full respect for both relgious as well as atheist individuals).

So Muslim clerks at convenience stores and bodegas all over the U.S. are in violation of Sharia?

What is interest if not a risk premium? Lenders profit when they price the risk of loan repayment correctly and lose money when they do not. Why is this contrary to the good of humanity? Borrowers obviously consider themselves better off for taking out a loan, otherwise they wouldn't apply for one. So if the lender is happy and the borrower is happy, why would Allah be unhappy?