The Case For Bitcoin

So I just want to quickly touch on what is it that would make cryptocurrency halal or haram? Because I know that's going to be the foundation of the Islamic case for Bitcoin and for all cryptocurrencies. So, in order to frame an Islamic ruling on something, the first question you need to ask yourself, is this an act of a Buddha when of itself or not? So an activity by the window itself, Salah, zikr, hudge, fasting, those are activity by the witness themselves, then you have acts that are not actively by the witness themselves, but can become due to their intention, eating, drinking, sleeping, your intention behind them, is to get energy so that you can worship Allah, it

becomes an activity, but if your intention behind them is not present, or even for dunya, repurpose, that's perfectly fine. You're just missing out on the reward, you're not being punished for it. So when we look at something like cryptocurrency, is it an inherent act of EBA? Yes or no?

What do I say?

It is an inherent activity by the who said yes? You said yes. How?

If I use cryptocurrency is Allah subhanaw taala going to reward me?

Wanna Tsukuba? Mama? Yo Yo? Amati Lillahi Rabbil Alameen assent This is an Ayah from the Quran. But in using cryptocurrency is Allah subhanaw taala gonna give me a jet.

Yeah, using in a halal way.

So with intention, but when of itself? No, correct. So cryptocurrency and wealth in general is not an inherent act of Riba. It is not an inherent activity bada. So now once you understand this, we have a default ruling that is established, which is the matters of the dunya are halal, until proven haram, whereas murders of IBA are haram until proven Khaled so if someone comes to you and says, I'm going to pray five records for Salah toto are they allowed to do so? They're not allowed to do so? Because we know that a lot of the herd is for raucous. If they want to add something, they have to bring the lead for it. They have to bring evidence for it from the Quran, from the Sunnah, from the

consensus of the companions. When it comes to eating and drinking. Someone says I want to drink water. Someone says I want to drink juice, do they have to bring evidence to prove that water is permissible or juice is permissible? They do not because the default ruling is that it is halal until proven haram. So now once you've established this base case, we now go on to Are there any conditions that need to be met? Are there any conditions that need to be met? There are five conditions that need to be met. Some are specific to wealth, some are specific to cryptocurrencies. So with regards to wealth, there has to be a medium of exchange and a store of value medium of

exchange store value. Ferris spoke about that in his presentation, so I'm not going to repeat that. What becomes specific to cryptocurrency over here and this is in contrast to the fiat system is that wealth in Islam is meant to be deflationary by nature. So you know, Amendola was speaking about the concept of inflation. You actually have two main schools of thoughts within economics, you have the Austrian school of thought. The Keynesian school of thought. One is pro inflationary, one is pro deflationary. The Islamic position is that it is actually meant to be deflationary. Based upon the fact that wealth in Islam is meant to be commodity based it is meant to be commodity based. So now

when you apply this cryptocurrency, there's two main ways that they do this. You can have a limited supply like you have for Bitcoin 21 million approximately, or you can have a burn rate, meaning that as the amount increases, they burn parts of it to bring it back. So it makes cryptocurrency not all of them, but at least Bitcoin and Aetherium deflationary in nature. So that's number three. Number four, we talked about tokenomics which is what exactly is happening with these cryptocurrencies. And the main thing we want to look at over here is that it's not a Ponzi like scheme. So for example, I'm starting up a new cryptocurrency I'm going to call it navaid coin. And I know a man Allah

mashallah he's very connected in the community. So I tell him, I know Allah, You know what, next week on the member, I want you to really push out navaid coin. And for every person that buys navaid coin, I'm going to give you a percentage of it. And you saw this done with a whole bunch of influencers and all those cryptocurrencies, you know, went to nothing. So this is a Ponzi scheme. So one of the things that we want to look at is that the tokenomics are not Ponzi esque. So it's not a Ponzi scheme behind it. And then the last condition is that it has to have a real use case. So for Bitcoin

I will advocate is that it is a currency Aetherium is a technology and this is my very simplistic limited understanding. Both of these are real use cases, but I come up with navaid coin, what is the value of the Bitcoin? What is it actually do what purpose is it serving? Right other than the fact that I named it after myself. It has zero purpose zero world usage whatsoever, right? So in order for it to remain wealth in Islam, and for it to remain halal, it has to have a real use case behind it. So now this is the simplistic conditions. I'll give you an even simpler way. You're interested in a particular cryptocurrency is there a shortcut to finding out if it's halal if it has a large

market capitalization? Islamic finance guru has the top 50 cryptocurrencies by market capitalization that tells you if it's halal or haram based upon these criteria. So all the major ones that you heard of like Solana like Aetherium,

like Dogecoin, all of those ones that have larger macro market capitalizations, they will tell you if they're halal or haram, that is the simplistic way behind it. So with regards to what drives the price of Bitcoin, and what makes it halal or haram in terms of its profit. So Bitcoin, as far as I mentioned, is most closely equated to a commodity, and the prices of commodities are driven by supply and demand. So the more demand that is created for the commodity, the more money people are willing to pay for it. As the supply decreases, the more the supply increases, and the demand decreases, then the more the price will drop. Now, I think something important to understand what

Bitcoin has working for it is the fact that not only are there a limited amount of approximately 21 million, but the fact that within the past year 70% of Bitcoin has been illiquid, meaning it hasn't been transacted with it's being stored and people are not using it. So only 30% of it is actually currently liquid, which means the supply has decreased, and the usage of Bitcoin has increased. So the demand has gone even higher. So now the EFT or the ETF is obviously a big discussion, the United States that as soon as that becomes interplay, and becomes readily available, what the impact is going to be on that a lot of economists are arguing that the price of those ETFs has already been

taken into consideration, and that's what's driving it. But there are other forces as well as other countries, you know, coming into play, Argentina just had a major election, and this new prime minister of theirs is very anti, you know, inflationary mechanisms of currency. So he may not directly push for Bitcoin itself, but it will be one of the things that is encouraged. So that could be another thing. So there's a lot of things in play, that will increase the demand of Bitcoin. And if you understand that only 30% of it is liquid, this will naturally drive the price up even further. Allah Huhtala. And your second question? Excellent. So with regards to staking, it's about

how you're going to frame the cryptocurrency. So those that are framed as currencies, and those that are framed as technologies, starting off with the technologies, it's a much easier answer. It's as if you're renting out your technology. So you rent out your technology, you're receiving a reward back in return. That's not problematic whatsoever. Now when a cryptocurrency is framed as a currency, if you round out a currency, and you're getting extra money on top back on that currency, isn't that the essence of Riba? Inherently The answer is yes. But the the thing that needs to be looked at over here are currencies like Bitcoin, purely currencies in nature? Yes, the main case use

of it is currency. But as you stake Bitcoin in this theoretical realm, are you strengthening the network as well? If you are strengthening the network, you're now using it for a technological purpose, as opposed to lending money out and getting interest on return. So with regards to technologies, I think it has a very simplistic answer with regards to currencies or those cryptocurrencies that are primarily used as a means of exchange and a store of value. I think it's better to hold off until like scholarly body issues, a fourth one on something like that. But all that to say, there's a couple of individuals that I recommend that people follow from the Islamic

perspective. One is Mufti for us, Adam out of the UK. And second is Chef Joe Bradford out of the United States. Both of them are doing a lot of work in this field to constantly follow with the updates are on that issue. Allahu TADHANA. No, not at all. So, so excellent. So let me translate your question. So the brothers question is

is Bitcoin basically a circumventing of Sharia compliancy in order to deal with interest? And the answer to that is no, Bitcoin is a unique commodity within of itself, that is not trying to circumvent any systems or trying to circumvent any rules of the Sharia. In fact, I would advocate for the exact opposite of it. Whereas, if you look at the major banks in Canada, how many of them took pro Zionist stances and sent money to Israel? How many of them actually public information how many of them are directly investing into military usage and weaponry usage for the State of Israel? Right. So now, if you this is the state of where we are placing our money, what is our

accountability towards it right? What is our responsibility towards it? So now you have something like Bitcoin again, I'm going to give this disclaimer again, because I give it during their session I need to give you during this session as well. Anything that you hear in this session is not financial advice. We're not advocating for you to buy sell, or to hold Bitcoin or any cryptocurrency please do your own due diligence. And any opinions that are shared here today, by myself and Amanullah inclusively, are not necessarily representative of the Islamic Information Society of Calgary itself, but our own individual opinions. So now, going back to that question,

I believe the point of today's session was to prove something like Bitcoin is more Islamic than any system that we have. Just because we don't have we're only accountable to it for ourselves, how I spend it and how I use it is my issue. But when you're putting your money in, in these banks, the way they spend it, we have a responsibility towards that. The fact that we're supporting riba indirectly, we have a responsibility towards that, right. So those are the bigger questions we were trying to answer with this event. And again, the point isn't to say that go out and buy bitcoin. But the point is to think bigger about our money, right? When Allah Subhana Allah and His Messenger

sallallahu alayhi wa sallam tell us that our feet aren't going to move on the Day of Judgment till we were asked about five matters. How did we get our money? And how did we spend it? A part of it is where we are replacing our money. Right? So there's a level of responsibility that we need to take. But to answer your question, I don't believe it's the highest and it is permissible. Allahu taala. I want to put a man on the spot here.

My question for you, sir, this is going back to a conversation we had that we never got to finish

bitcoin and cryptocurrency on a realistic level, how does a country like Lebanon implement it? In summary? And then how long do you think it will take to solve their inflationary problems?

Because when it's, you know, the example I gave originally was, if you were to start a country from scratch, the easiest thing is Bitcoin. Now, if you have a country in economic shambles, how do you implement Bitcoin?

So, if I work the dollarized economy, I just AirDrop a whole bunch of US dollars and people collect them and I go to the banks and whatever, versus I would provide a X amount of

money,

electricity to Lebanese citizens, where they can go in mine Bitcoin. So that's their way of receiving Bitcoin. If I have some sort of, you know, every Lebanese person has, you know, X amount of resources every every month via medical or, you know, government stipends or whatever, I would give a portion of that to electricity consumption by a specific household where they can, you know, mine, of course, then you'd ask the question, you know, the cost of mining and the initial capital to begin money is something that may be prohibitive, that's when you know, agencies and involved uncorrupt agencies, ones that can, you know, have a pool of funds can generate

enough,

you know, for the proportion of a specific jurisdiction or sort of writing or whatever.

And rather than, you know, back to brother yets point, rather than the rich and wealthy having access to that, you know, that they call it the power grid of Bitcoin, everyone has access to it based on the number of you know, the household, number of number of households in the household rather than the wealth of that household. So, that would be you know, in terms of injecting funds into the to the actual economy now the use of, of it is actually quite simple vendors, all of a sudden, instead of having cash registers, they would have just printout of a QR code that's tied to their address. And if for those who have businesses, the point of sale

devices that we use are quite expensive. So I'm already saving you a whole bunch of money by having a printout of your QR code that you don't have to touch any sort of Fiat cash or anything like that. I literally scan the QR code and I transact with you. So in terms of printing the money, I think it's all based on economic consumption, economic rationing, electricity rationing, in terms of the actual transacting with vendors would be with that, call it that QR code solution.

And in terms of the third thing is keeping governments

responsible. This is the way to keep them responsible. Because now at any point in time, I have, I have a immutable public ledger that will tell me what is sitting in the war chest of the government's, how much funds they have, how much they have used, what what are the plans for things like that? Is it sitting in the country? Is it not as being used elsewhere? All of this is transparent. So I guess in summary,

yeah, so an economy like Lebanon would benefit from distribution of wealth, the interacting of wealth on a vendor level. And then thirdly, in terms of implementing it, it would keep governments

as far as possible from the ability to corrupt and collude with another