Topic: Islamic Bank of Bitcoin (Read 4208 times)

I have a huge plan for making real estate investment, turn a profit here in Europe. I will need a Bitcoin Loan to make it do so. I will PM you some of the details.

AsSalam aleikum, (May Peace(one of the names/attributes of Allah) be upon/with you)

     I have been researching this topic since it is my sincere desire to comply with the will of the Most High and, wAllahi, if I truly believed bitcoin was inherently haram (forbidden) I would sell everything right now and donate the proceeds to charity.

      The case for fiat money being haram is much stronger since in its most benign form it represents trading in debt, and when it is issued based on the issue of Federal Reserve notes that represent interest denominated debt, even more so.

     The mathematics that underly bitcoin, just like gold, are not the creation of Satoshi Nakamoto, but the creation of the All Powerful and All Knowing. Just like the properties of the physical universe that cause an airplane to fly, it is merely the discovery by humans of the knowledge given to us by the Creator and Sustainer of the universe that allows us to fly around the planet.

       As Allah via the Archangel Jibril (Gabriel) via the Holy Prophet Muhammed (may peace and prayer be on him) tells us in Ayat al Kursi, the Verse of the Throne, (2:255)

"And they comprehend not anything of His Knowledge save as He wills."

       It was Muslim mathematicians who introduced the algorithms that form the basis of both modern computer science and the bitcoin protocol.
The mining of bitcoin also represents the maintenance of the bitcoin network, so it represents real work, not gambling.

  Gambling is a win-lose transaction. If you win in gambling, it is because other people lost. It is also addictive, and these are among the reasons it is forbidden- because the divine law (shari'ah) is guidance and mercy on us to live in the best way for ourselves and for others, in this life and in the future life.

    No one loses when a bitcoin mining award is given to a miner or pool. The miners work to maintain the network, and are rewarded with bitcoin. This wealth is not removed from anyone.

   Purchasing bitcoin with fiat as a store of wealth is no different than trading silver for gold, except that lawfully obtained silver or gold are unquestionably halal (permitted), whereas the permissibility of paper currency issued by national central banks is more questionable.

    Furthermore, bitcoin allows Muslims to do business without dealing with immoral institutions like almost all modern banking institutions and thereby supporting these institutions.

   That being said, if you purchase bitcoin with the belief that the price will go up or sell it for fear the price will go down, this transaction would fall under the category of speculation and be haram. As narrated by Omar ibn al-Khattab, may Allah be pleased with him, the Prophet of Allah said  "Deeds are [a result] only of the intentions [of the actor], and an individual is [rewarded] only according to that which he intends."

    If you purchase bitcoin with the intent of conducting business in a more lawful way, to avoid supporting the tyranny of the current monetary regime as instituted by the U.S. and Britain, where the IMF and World Bank were created, and you do this for the sake of Allah, glory be to Him, then this could be, inshaAllah, a form of ibadah (worship). 

    If you purchase bitcoin because you want to get rich and you think price is going to go up, this purchase becomes speculation, and could be a sin.

   On the other hand, bitcoin could also be considered a joint venture, like a stock, and most scholars agree purchasing shares in a company is permitted. After all, bitcoin is also a collective enterprise whose success depends on all of the bitcoin owners and users. In this sense, even if the price goes up it could be regarded as lawful.

I BELIEVE FIRMLY THAT ZAKAT ON BITCOIN IS OBLIGITORY.

   I am not a scholar and I have no authority to transmit legal opinion, but I have spent many hours of research on this topic and perhaps this can be of use to my believing brothers and sisters and those who hear the call to Islam. Anything correct in this statement is from Allah and any error is my own human weakness.

      Thank you for reading, and may Allah guide us toward what is lawful and good and protect us from that which is harmful and forbidden and may Allah guide us to good works and paradise. And all praise is due to the Lord of the Worlds. Amin.

   

1.6 billion muslims or 23% of the world's population likely do not agree with the above statement

I don't know about that - I imagine that the Muslim community will probably come to a general consensus on bitcoin in the near future. The majority will likely find that it is sharia or haram (forbidden). Given that there are a lot of wealthy investors in the middle east (UAE, for example) who will not want to miss out on what American, European, Asian, etc speculators are profiting from, I believe that this will come sooner rather than later.

Bitcoin shouldn't be brought in contact with religious mumbo jumbo

I don't know why do you need a Fatwa on Bitcoin, it is the same matter as Gold or any other product, demand and supply give it a value the same as gold and silver, the creation of Bitcoin is the same as mining gold.

the problem with Muslim world is that these things wont spread that fast, and when it gets popularity just then Big Imams starts researching the subject and yet you will hear 10 versions of it.

Hi ,

I want to learn fatwa of bitcoin. I mean Im not 100 %  sure of it , because ( I think)  the way how  bitcoin created and value of it  is not so clear.

Is there any fatwa that you know from some hanafi(or other Islamic) scholars? Although , Im fan of bitcoin and also investor of it. I cant spend it with inner calm.

Glad to see IBB is back up and running again. And it looks to be in the hands of someone that shares its vision.


In the world of currencies bitcoins are closer to gold than they are to fiat. They are naturally limited (just like gold), but still very easy to transfer between people. It will never be much good for instant transactions, like buying a coffee with cash, but there are many workarounds for it, with IOU notes from 3rd parties, like a bank such as IBB. If you and the person you are buying from both have accounts with IBB, you can still get instant transfers if IBB handles the transaction between  your accounts (and has appropriate authorization from you).

If you have any question/suggestion/concern feel free to contact me over PM.

   I don't think there are many yet, but there will be InshaAllah and we will work on promoting it. If you want to collaborate on the exchange maybe we can talk.

   Yes, it is the same one.


   Or an awakening.

off topic: how many Arabs/Muslims are around Bitcoin and how do they buy-sell it, I am working on developing an Arabic exchange and would like to get a picture, suggestion, inputs... about this topic.

      I think bitcoin is huge for Muslim businesspeople. We have been forced to conduct transactions using fiat currency which is generated using interest based debt swaps, and while the gold dinars is a good idea, they are not divisible or transferable enough to be competitive in today's fast moving global market. So we were forced to use fiat, which not only props up the power of unjust regimes who kill Muslims for profit by increasing demand and therefore value of their currencies, it is also based in interest, as well as having portraits of living creatures on the bank notes! Not to mention symbology of secret societies who engage in magic/shirk...

     Using this money has deprived our transactions of much baraka (blessings). I see a new era of Islamic business beginning. Bitcoin has one danger though- the risk of gambling due to volatility. So it is important to try to clear your niyah (intention) and not sell BTC for fiat no matter how high or low it goes except when necessary.

   To some extent we can see bitcoin being similar to the currencies used in the time of the Prophet, SallAllahu Alaihi waSalam (May Peace and prayer be on him.) While bitcoin has the property of gold and silver of having a fixed supply, gold and silver never saw parabolic price rises relative to other commodities. However the hadith tells us that grains were also used as currency in the time of the Sahabis (companions of the blessed Prophet, SallAllahu Alaihi WaSalam.

Abu Dawud, Book 16, 3343

Narated By Ubadah ibn as-Samit : The Apostle of Allah (pbuh) said: Gold is to be paid for with gold, raw and coined, silver with silver, raw and coined (in equal weight), wheat with wheat in equal measure, barley with barley in equal measure, dates with dates in equal measure, salt by salt with equal measure; if anyone gives more or asks more, he has dealt in usury. But there is no harm in selling gold for silver and silver (for gold), in unequal weight, payment being made on the spot. Do not sell them if they are to be paid for later. There is no harm in selling wheat for barley and barley (for wheat) in unequal measure, payment being made on the spot. If the payment is to be made later, then do not sell them.

Also there appears to have been dramatic price spikes in grains due to shortages that were exploited by traders, as shown by this narration of the noble actions of Uthman, RadiAllahuanh (May God be pleased with him)


"In the times of Umar (Radiallahu Anhu) there was a severe famine. All the people of Madinah were suffering due to the shortage of food. A caravan made up of a thousand camels loaded with a large stock of food grains belonging to Uthman (Radiallahu Anhu) arrived from Shaam (Syria). Several merchants offered to buy all of it. He asked them what profit they would pay. "Five per cent," they said. He answered that he could get higher profit than that. They began to argue with him, saying that they did not know of any merchant who would offer him more than their quote. He said to them, "I know of one who repays a profit of more than seven hundred to a dirham (Arabian currency)." He then recited the verse of the Noble Quran in which Allah Ta'ala mentioned this profit. "The likeness of those who spend their wealth in the Way of Allah, is as the likeness of a grain (of corn); it grows seven ears, and each ear has a hundred grains. Allah gives manifold increase to whom He pleases. And Allah is All-Sufficient for His creatures' needs, All-Knower." (2:261).

"O traders! Bear witness with me that I donate all this to the poor people of Madinah!" said Uthman (Radiallahu Anhu).

Source: Related by Shaikh Habibullah Mukhtaar in his book "Bringing Up Children in Islaam" in the chapter of Generosity."

  Furthermore, this narration shows that price controls are prohibited under sharia law so parabloc price increases are just part of the natural function of markets.

Narrated Anas ibn Malik: The people said: Apostle of Allah , prices have shot up, so fix prices for us. Thereupon the Apostle of Allah (peace_be_upon_him) said: Allah is the one Who fixes prices, Who withholds, gives lavishly and provides, and I hope that when I meet Allah, none of you will have any claim on me for an injustice regarding blood or property. 

      So to conclude I think that while bitcoin is not exactly like gold, dealing with bitcoin is much closer to the business practicesses of the Sahaba, since the supply is fixed and we do not require banking institutions to issue it, and its supply is not tied to the fate of any nation.

seems like there's a resurrection to it

Is this the same one?

https://bitcointalksearch.org/topic/islamic-bank-of-bitcoin-21732

Alhamdullilah, good to see the world of bitcoin in the muslim world

Do you believe bitcoin is the new gold? Considering the first legitimate currency we're using back in the old days are gold or silver?

IBB Update 9 Muharram 1435 A.H.
                14/11/13

   Bismillahi Rahmani-Rahim


      First off, apologies to all of the shareholders for the delay in the dividends and for the lack of activity. Danijel, apparently for personal reasons, has no longer been able to serve in his capacity as IBB CEO, and after expressing interest in being involved with IBB I will be taking over operations until Danijel comes back online and we can reach a permanent arrangement.

    Here is some quick financial updates:

Income:
 Nasty Seats: 2.23975213 BTC
 Loans/Other Holdings: 4.17973646 BTC
 Money Saved for website: 6.6 BTC

Total cash holdings: 13.01948859 BTC

6.6 BTC retained for website development

Expenses:
   Transfer fees: .00012 BTC
   Charity: .16 BTC (Amani Kinderdorf - www.amani-kinderdorf.de - This donation was to compensate for dividends mistakenly paid to IBB with the proceeds of interest based transactions.)
    
       Dividend Paid Today: 1.22660370

Pubicly Held Shares: 1,017
Dividend paid per share: 0.00120610 BTC


Before this week, the stock was last trading at .01. At this price, the averaged 52 week yield is approximately 140%. At the 52 week high of .6 BTC, this is only 2.3%.

     While this is good news for the shareholders who bought in later, it is not adequate performance for the shareholders who funded the initial fundraising and who are still holding. The good news is that we have held the 6.6 BTC that were set aside for the website, and due to the recent rally, these are now worth considerably more than they were. Now we can start work on improving the website, and any recommendations for skilled and trustworthy web designers and input regarding content would be much appreciated. I would suggest the following strategic moves to boost revenue, and thereby share price and dividends.

      Online Exchange with Language Support for High Growth Potential Countries

     One way to expand revenue would be to provide a simple, user friendly exchange interface in Urdu, Turkish, Malay, and Arabic. I will begin research on which target demographic has the highest transaction volume potential, since fees will be based on percentage. Obviously, most bitcoin users in these countries are probably already proficient in English, but some will prefer to support a Sharia compliant company and may prefer the comfort of working with their native language. If we can attract one or two wealthy clients, it will more than be worth the investment in translation.

         I am sorry to say I lack technical expertise when it comes to setting up an exchange, but I am suggesting little more than acting as a portal to Bitstamp for a small fee.

  
       Hybrid Ewallet Service

       Offering a secure online wallet service with language support for our target demographics. This is another way to work on building a loyal customer base and build a reputation to gain the trust of less tech savvy bitcoiners. This will also increase income from transfer fees.

       Expanding Basket of Sharia compliant securities

        As more Muslims begin to use bitcoin and look for bitcoin related  investments, we can poise ourselves to lead the market in providing access to a selection of Sharia compliant bitcoin related and denominated securities. This will save Muslim investors the time of having to research individual bitcoin companies to see if they are up to the standards of Islamic law. This will support the development of bitcoin infrastructure which will be good for the Bitcoin community in general, and will increase awareness of Isamic principles in business.

       Public Relations Campaigns

      A smal portion of funds can be set aside for advertising, focusing in particular on countries with restrictive banking regulations, large Muslim populations, and high inflation. For example, we can pay people .001 BTC per forum post on Iranian, Egyptian, Libyan, and Sudanese forums explaining what bitcoin is, how it can help, and linking to our website. Once at our website, users will be able to purchase bitcoin, store them securely, conduct transactions, and recieve clear directions on how to purchase shares in IBB.
      

           These are just a few preliminary ideas of how to get IBB back on track to be the worlds premier Shariah compiant bitcoin based financial institution. I would suggest in sticking with Danijel's plan of compensating all labor with a mixture of BTC and stock. Any suggestions, questions, or feedback will be very welcome from any current or potential shareholders.

    And all praise is due to Allah, who alone is worthy of all worship, Lord of the Seven Heavens and all that exists.

Thank you!

Ibrahim - Interrim Director

IBB - Islamic Bank of Bitcoin
www.ib-bitcoin.com