Bitcoin: Beyond Questions of Halal and Haram

If you want to appreciate how Islam is more than just a religion of technical laws, look at the fuss surrounding Bitcoin.

Most folks are obsessed with just one question: IS BITCOIN HALAL?!

What do they mean by that? Well, it seems folks aren’t sure whether it is permissible to invest in something which isn’t “tangible” or “real” and is effectively some random cyber-creation. From a fiqhi point of view, what is the ruling concerning new forms of artificial money and crypto-currency products to be invested in?

The truth of the matter is that this is far more complicated than just whether something being “tangible” is legally halal or haram. Rather, we have to take many things into account – such as values, objectives or indeed the spirit of the law and not just legal letters of the law – which is why true scholars aren’t falling over themselves to rush to a ruling.

For example, is it right for Muslims to be involved with artificially created products that fluctuate in value so violently – where said fluctuation can be caused by simple true/false news reports of potential changes in future financial regulations – so as to create deliriously happy people (those who bought it for pennies) but then also create deliriously depressed people who will buy it now and then experience an artificial crash as big as its artificial rise and lose thousands?

Or is it ethical to be involved with a product that is almost exclusively used by criminals and those who want to hide things from public? Are Muslims meant to be people who dabble in the shadows or rather folks on the forefront of industry promoting openness and transparency in all their actions?

Also, even though everyone is losing their minds on how amazing block-chain technology is – such as what powers the creation of Bitcoin – is it ethical to support a system that uses more electricity than a small city would need just to mine/create ONE coin?!


What are the implications for poorer countries, or those that struggle to power their cities as it is without taking “load-shedding” to a whole new nightmare level?

Should we really be supporting the Chinese – who have a huge advantage with mega computers and mega energy availability – so much so that we pave their path to be the Kingmakers of the Future where they’ll probably come for us Paks first in Gog and Magog proportions!? Putting such huge financial and political power into the hands of the few is ethical behaviour?!

At the same time however, should we allow ourselves to be manipulated by the naysayers and haters such as the head of the investment bank JP Morgan calling it “stupid” and “a fraud that will not end well” and threatening to fire any of his traders who got involved with it?

Because, obviously, banks are neutral players in this whole game, and they have no interest in any new entities taking control of the world’s currencies and finances and controlling their flow and availability, manipulating politics and the world economy for centuries…actually wait a minute…

See, we are already living the future. Very few of us use much cash anymore, and increasingly, paying for anything or anyone in cash is automatically being associated with criminality and tax evasion and God knows what. Have the authorities masakeen actually shot themselves in the foot here, by forcing us all to use electronic bank transfers for absolutely everything so that it can all be tracked and taxed etc., so now folks are thinking well I might as well go one step further and go fully electronic into the cyber-money world, right? Why not? We’re basically there already, the networks have been put in place at huge cost to the environment too already so might as well use it properly!

And some of those who don’t like Bitcoin, complain of the huge financial risks involved when there is no possibility of the government regulating it officially. Because, sure, those governments did a fantastic job of regulating the regular economy and its financial masters i.e. the banks and their leaders, aka the greatest criminals alive in our time.

And okay if you don’t like the ethics around Bitcoin, the new crypto-currencies will be far more efficient, use far less resources and energy, will be more open to normal people and their computing capabilities so as to not put all the power in the hands of the few. Well, at least, that’s what they reckon. That’s probably what the founders of Skynet thought as well innit. But then, we would never have got to seen Arnie in full glory so I guess there’s always a silver lining.

Arguments can be made back and forth, playing devil’s advocate has never been more fun, but we often forget – and just to end for now – that we are dealing with peoples’ livelihoods.

Should we be promoting fantastical methods of making money, where profit and loss is based on the irresponsible – or worse, evil-intentioned – statements and actions of just a few people that can affect or manipulate the value of assets and things like Bitcoin so powerfully, in part due to its uncertain tangible nature, as opposed to what should be a strong, unique, intrinsic value of a product/asset instead?

When we warned against pyramid schemes, network marketing scams, or spread-betting on the markets (actually let’s just say it as it is, GAMBLING), then that was because we want to promote the values of hard work, knowing exactly what you do as work in return for fair compensation as the Prophet (sallallahu `alayhi wa sallam) praised time and time again. We have to rid ourselves of the disease of “get-rich quick” schemes, because it’s not so much about the legalities, it’s also about what your job develops in YOU as a person, and what you are contributing to your community and society around you.

Making money should never be just a zero-sum game. It’s not just about the profit-motive. Islam regulates far more than just that. Seriously.

So you see all those primary thoughts above? And we haven’t even STARTED the legal debate about its tangibility and permissibility of the halal and haram intrinsic nature of the product!

Which just goes to show like all scholars know fully well:

Islam is more than just a legal system. It is more than just something being only halal or haram. There is a spirit to Islam too. Call it ethics, morals, adab, cautiousness, avoiding grey areas, whatever you want.

This isn’t some Mickey Mouse faith, and it’s neither a rehash of the current Old Testament. Show some respect to your Deen and yourself by not reducing it to just a technicality.

And Allah knows best.


* Republished with kind permission from the authors’ FB page. A few slight editorial modifications were made in the article.

About Sheikh Abu Eesa Niamatullah
Sheikh Abu Eesa Niamatullah is Almaghrib Institute instructor and Vice-Chair of the Al-Qalam Sharī‘ah Panel, a fatwa body for legal and financial concerns based in UK. He also served as the resident scholar of Cheadle Masjid in South Manchester.