Who is more “halal” for BTC and ETH?
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Does the digital currency also have a distinction between halal and non-halal?
As the development of cryptocurrencies and blockchains swept the world, the Islamic world, the world’s fastest-growing religious world, was also “invaded” by cryptocurrencies.
But according to its Islamic law based on the teachings of the Qur’an, Muslims have a taboo for the financial world similar to the “food world”: in Islam, the process of usury, the process of obtaining interest through loans. Is considered sinful.
Before this, the appreciation of real-life support assets such as real estate or gold is in accordance with Islamic law, but most cryptocurrencies are considered illegal because they do not have physical asset support and usually represent a pseudo-fiction to the company. investment.
But recently, the famous Muslim scholar and financial adviser Amanie published a white paper stating that Ethereum is “halal” according to Islamic law. For Muslim buyers, this clarity may stimulate Additional needs of Ethereum.
Ethereum of Halal Certification
Muslim Scholar Amanie judged ETH as “halal” because ETH represents a “functional token” and serves as a currency for the Ethereum network. Therefore, having ETH is legal. However, he also has reservations about the specific use cases of ETH because there are many other tokens running on the agreement. In some cases, if the token is used to raise funds for the company (which looks a lot like interest), then this behavior is considered illegal in Islam.
More subtly, although he ruled that Ethereum’s PoW mechanism and PoS mechanism are in line with Islamic law. However, once ETH 2.0 goes live, the act of “locking” tokens to obtain pledge rewards remains a controversial issue.
But at least he still expressed a positive attitude towards ETH. Amanie is highly regarded in the Islamic financial communityCharacter. Although this view is not final, it is still very weighty among devout Muslims.
According to the Pew Research Center, Islam is the fastest growing religion in the world. There are about 1.6 billion Muslims in the world, accounting for about 23% of the world’s population. Most Muslims in the world live in Asia Pacific in countries such as Indonesia and India. area. Given its large audience of believers, this white paper is likely to have a substantial impact on the demand for ETH.
Who is BTC and ETH more “halal”?
In fact, the controversy over whether the two major digital currencies, Bitcoin and Ethereum, are in conformity with Islamic law has been particularly prominent.
American engineer and special project leader of the Ethereum Foundation Virgil Griffith first studied this issue in October 2017.
He cites the definition of “money” in Islamic law: (1) as an exchange medium; (2) money is durable and does not destroy or corrode; (3) money is precious metal or food; 4) The ownership of monetary assets is clear and endowed with valuable value by God; (5) rich in funds and freely available; (6) money has intrinsic value.
He believes that Bitcoin and Ethereum both meet the top five. In the sixth article, Ethereum is more halal than Bitcoin. The reason is that the POW mechanism of Bitcoin does not give its value, only exists as a kind of exchange medium. However, Ethereum has the intrinsic value of driving diversification procedures compared to the former due to the existence of smart contracts.
It turns out that Virgil Griffith has been rushing for his arguments. In July, according to Coindesk, Virgil Griffith said the organization is working with financial experts along the Gulf Coast to prove that the Ethereum blockchain is in compliance with Islamic law.
Is that bitcoin halal?
Cointelegraph interviewed Matthew J. Martin, a financial technology startup from Indonesia.
Matthew is a Muslim American from Indonesia who believes Bitcoin can be divided into currency and payment networks, and the Sharia principles apply to both.
He believes Bitcoin as a payment network, “is halal. Bitcoin goes beyond traditional closed banking networks. Traditional banking networks use private ledgers, and there is no guarantee that the promoters actually own the assets, while Bitcoin Mathematical certainty guarantees that the originator of the transfer has the relevant assets, and the traditional bank operates on the principle of partial reserve, which is prohibited in Islam.”
Bitcoin may be more halal than modern legal tender. He said, “modern masterThe currency of rights is based on debt and usury, which is strictly prohibited in Islam; on the other hand, bitcoin is not based on debt – it is based on proof of work – and this is at least not illegal”
But as a currency, Bitcoin is not recognized as “halal.” He says. “In history, Islam only recognizes goods with intrinsic value as currency, including gold, silver, rice, dates, wheat, barley, and salt. In a strict sense, bitcoin may not meet the currency standard.”