Cryptocurrency uses cryptography to secure its transactions and records. This means that cryptocurrency transactions are encrypted and records are also kept in encrypted form. There are more than 1, cryptocurrencies and the cryptocurrency which has the most market value is called bitcoin. The value of these cryptocurrencies is unpredictable. As written above, the value of these currencies depends on their demand. This is the reason why we see a single tweet plummeting or skyrocketing the value of a cryptocurrency.
It solely depends on the confidence of the people investors. From an Islamic perspective, there are several verses that forbid us to invest our money solely based on luck and chance. Consequently, many fraudsters are exploiting this basic human tendency and rendering people penniless in the name of investing in crypto.
They lure innocent people by giving them hope of high profits and promises of overnight riches. Moreover, many Ahmadis have suffered losses due to the high risk associated with these investments. The recent guidance from the markaz in the UK was to warn and protect those Ahmadis that were investing in such currencies from the unusually high risks associated with them.
In gambling, we are solely dependent on luck and chance. The same is the case with cryptocurrencies. Among this criterion also this currency to be exchangeable with other cryptocurrency exchanges [5]. Most virtual currencies like bitcoin have an official wallet. This wallet come with two keys public key address and private key address [7]. These addresses can be used to send or receive a specific type of cryptocurrency for instance, to receive Bitcoin, you need a Bitcoin address and can be shared publicly.
To access your wallet, you need to use the private key, which is the Journal of Theoretical and Applied Information Technology 31st March There are numerous types of wallets you deal with these are online, offline, mobile, hardware, desktop, and paper. The GreenAddress wallet is one of the most well-known cryptocurrency wallets for Bitcoin, is a multisignature wallet available on the web, desktop, Android, and iOS [8].
Cryptocurrencies for example like bitcoin comes with more advantages such as money transfers and payments using a bitcoin, either nationally or internationally, are not required to go through financial intermediaries. Payment using cryptocurrency very fast and cheaper compared to other payment method like western union transfer.
These all technological advancement of speed and transparency, cheaper can be achieved by being processed in a network using blockchain technology [9]. Money is created to give solution for mankind problem of barter system to exchange goods and services among them. In history, mankind has used money in the variety of methods, from commodities such as salt, cows, wheat; metallic material such as gold and silver; then mankind use fiat currency such as national currency and electronic money [10].
Now a days, by the advancement development of information and communication technology, virtual currencies are invented. The most popular virtual currency is Bitcoin which found by Pseudonym named Satoshi Nakamoto in [11] From Sharia perspective, cryptocurrency can be considered as mal property due to desirability and storability [12]. This indicated that can be treated as valuable entity among individuals, It can be accepted as a medium of exchange by some group of people [13].
Cryptocurrencies, in their current state are the most protected currencies, even much more than some printed monies in circulation. This is due to his backing by high technological advancement E-ISSN: like blockchain and other algorisms related to it. This which makes virtual currencies difficult to be hack. Cryptocurrency have a lot of benefits when it comes to transaction for instance, ease of transacting business that is in line with Islamic ethics as Allah swt desires ease for HIS creation [15].
If all the prohibitive elements are avoided, crypto-assets can also become mal mutaqawwam legit or valid asset Bitcoin qualifies for mal mutaqawwam. Moreover, Cryptocurrency can be categorized as customary money, this refers to the money which receives the status of money due to custom and acceptability of people as a medium of [15]. Investigate the view of Muslim scholars on the legality of bitcoin. The study was conducted through Qualitative method.
The finding with respect to Shariah It has been claimed that cryptocurrency may be exchanged with other currencies subject to some conditions that are applicable in the exchange of currencies from the Shariah point of view, as it is just like fiat money, and hence they share same conditions of currency exchange as provided by Shariah.
Lawal [18] argue that cryptocurrency is compatible to Islamic banking and finance because it fit major qualities of money in Islam and the principles when compared to the fiat money recommends that there is need to create standards guiding its operations. Yuneline [12] Investigate the state of cryptocurrency from Four perspective. The finding reveals that Concerning the characteristic of money, Journal of Theoretical and Applied Information Technology 31st March But from the the legal perspectives, cryptocurrency does not meet the criteria as currency.
From the economic perspective, cryptocurrency does not fully meet the characteristic currency due to high volatility of price, and from the Sharia perspective, cryptocurrency can be considered property mal but not as a monetary value thamanniyah. Teichmann [21] examine how terrorists finance their activities through cryptocurrencies.
The study was conducted through Qualitative methodology. The finding exposes that Terrorists could use Bitcoin to receive donations from their supporters. Miglietti, Kubosova, and Skulanova [22] investigate the volatility of Bitcoin, Litecoin and the Euro. The study was conducted through Quantitative Methodology. The findings of the study indicate that, based on the statistical measures used, including the standard deviation of selected currencies and annualized volatility, that Litecoin is more volatile than Bitcoin and the Euro and that Bitcoin is more volatile than the Euro.
The professional background of the participants has already been detailed in the previous chapter and are listen in the table below. The interview format was semistructured, which means that although the same questions were asked, they were structured in different ways, and different probing questions were given to the interviewees.
Two main objectives were set in order to perform user studies covering the Islamic perspective on cryptocurrency usage within the public domain. Hence, the first objective of this research was to explore the uncertainty issues and user perceptions of adopting cryptocurrency from the Islamic perspective.
This objective was achieved by following the qualitative approach. The other objective covered the factors influencing the adoption of cryptocurrency from the Islamic perspective was achieved by following the quantitative approach as detailed in the previous chapter. This is certainly one approach to the sample size issue, which focuses on saturation when developing a grounded theory.
According to Charmaz [24], data collection should stop even with two participants if the categories or themes are saturated. Hence, the sample size of Eight participants for this study is sufficient to produce reliable grounded theory. The second interview was conducted in a restaurant in Kuala Lumpur and lasted for 15 minutes 5 seconds.
The third interview took place in Abuja, Nigeria and lasted for 28 minutes 30 seconds. It was conducted in Hausa and then translated to English. The fifth interview was conducted at the university in Maiduguri, Nigeria and lasted for 35 minutes 2 seconds. The sixth interview was held in a hotel in Abuja, Nigeria and was completed in 27 minutes 56 seconds.
After the interviews had been conducted, the data were transcribed and coded for analysis. The recordings were numbered, and the transcribed interviews were coded according to place of interview, date, time, and discourse unit DU. The DU is a numerical assigned to utterances by either the interviewer or the researcher without intermissions.
At the same time, DU in qualitative research functions as a means for an audit trail of the data. In this study, the researcher utilized the thematic data analysis approach to analyse the resulting data. The present study investigates the current state of cryptocurrency and the Islamic perception on cryptocurrency. Coding and readability check were performed in order to analyse the collected data and extract the main themes, figure out the repeated terms and words, and group similar ideas offered by the participants.
Coding is not simply a systematic chore but an intellectual driver of data exploration and a predecessor for the initiation and discovering of concepts and themes. The core responsibility of the researcher is to scrutinize and code the raw data from the transcribed interviews in terms of ideas and then deliberate the raised concepts into explorations of the essential pattern [27]. Accordingly, the process of coding creates the frame for the researcher to gather and summarize concepts into core ideas or themes.
While referring E-ISSN: to the research questions and developed literature, this research organized the narrative text data into concepts and themes. The concepts and themes were scrutinized and grouped into categories or super themes. The extracted main ideas and conceptual themes that were ascertained by the researcher were assessed by interrater readability check. Later, the major themes from the interviews data were used to generate the study findings. Content analysis constitutes the most frequently used qualitative approach in order to analyse text data [28].
Coding patterns, roots of codes, and intimidations to trustworthiness are the main divergences of this research content analysis. The coding categories are identified directly from the data extracted from the textual material and the analysis is based on a theory of the major research findings which determine the initial codes.
Thereafter, the keywords are counted and compared with the overall content of the underlying context that was interpreted, similar to the study performed ion [29]. The encoded data and existing data are analysed to determine whether or not they represent a new category or a subcategory of the existing code. The value of a data collection instrument lies in the validity and reliability of the collected data given that the instrument is a self-reported questionnaire or a projective technique [30].
Psychological literature shows that many studies that use projective techniques obtain acceptable reliability and validity [30]. On the other hand, a similar number of studies advocate that these projective techniques are not sufficiently reliable or valid [30].
In the projective techniques, reliability refers to data that are stable over time. If the participants are tested and retested, their reactions must be persistent and significantly correlated. Interrater reliability or coder reliability is another form of reliability that is employed with the projective techniques. Interpreting and coding drawings is recoded with expertise and results in the form of percentage of agreement are calculated. Reliability refers to its consistency, in other words, the accuracy of the instrument when it measures whatever it measures.
According to Webb [31], it is implied by the inferential validity of a study that there must be a skill to categorize and interpret response protocols on the part of the researcher. Most researchers are of the view that in the exploratory phase of a research project, projective techniques are significant. This is especially important when ideas and hypotheses are required.
Also known as consistency, dependability is equivalent to reliability in the quantitative research paradigm. Among the common qualitative strategies used to enhance the dependability in the qualitative study are audit trails, rich documentation, and triangulation. However, consistency can also be initiated through the use of interrater reliability which is employed to confirm the proportion of agreement among the raters.
The full interview transcripts and the generated themes from the main ideas of the data were given to the ratters in order for them to rate the agreement or disagreement of the extent to which the defined indicators reflect the coded statements from the raw data.
The pictures drawn by the participants were interrated by two scholars. The purpose of this step was to determine the rating of the other experts. According to [33], the interrater reliability is calculated by finding the percentage of agreement with the raters.
The result from the first rater and the researcher was On average, the two ratings combined produced Therefore, the researcher concluded that E-ISSN: his themes were sufficiently well chosen to suggest proceeding with the proposed study.
The members of the community are known themselves, the only way to provide the security and acceptability is by having the internal rules of the game among the members. Thus, the only way to provide security is to have rules set up by the Bitcoin user community. However, cryptocurrency also constitutes a digital asset designed to work as a store of value and a medium of exchange [34]. The US and Singapore, they said it also replicated the normal fiat money in their own country, the same value the same everything, but it can cut cost in terms of transfer of money.
It is worth mentioning here that the Monetary Authority of Singapore MAS has taken a relatively soft approach to cryptocurrency exchange regulations and is applying the existing legal frameworks where possible. The participant explained its acceptance through the fact that it rendered transactions cheaper and more transparent.
He also stated that crypto allowed people to do transactions without having to paying additional charges on the payments or transfers. A person may be sitting in his room making such money. Bitcoin was the first cryptocurrency and continues to be the most popular cryptocurrency one among hundreds. Indeed, Bitcoin derives its value from use as a medium of exchange [37].
The public confidence may not be universal, but no currency has ever achieved universal confidence. For instance, the Malaysian Ringgit is not considered as a proper medium of exchange in Australia. Thus, the confidence that people have in currency in general is relative. Thus, Bitcoin is different from paper currency since paper notes do not have an intrinsic value and their value reflect the strength of the economy determined by the central banks.
I think it first appeared in to the best of my knowledge. However, the use of Bitcoin and the like depends on its acceptability by individuals, companies and organizations. You also include your ATM card number or whatever means they want you to use and then you follow the process you click and the transaction is effected. I have seen or perhaps heard people talk about it but I need to carry out some research on that area. And I did some research and I also consulted some people that I considered are experts in the area of Islamic finance.
And I shared my own understanding and thought and they also told what they understand by cryptocurrency and from there we started exchanging information and experience with different people using different platforms including social media platforms on cryptocurrency, on Bitcoin, and so on. The participant had to consult other experts to find out more about Bitcoin and discuss it with them in order to gain a better understanding of its use and its implications.
I established my own mining system around At that time Bitcoin was very chive and very easy to do. What was difficult about it was the technical learning, your understanding how to build the ridge, the mining, how to make it work and so on and so forth and how to secure your wallet.
In such a case their system can be hijacked, and their wallet copied. Even the original key holder needs to know how to copy it, paste it and hide it somewhere. Today, there are a lot of cryptocurrencies in the market such as Litecoin, Ethirium, Bitccoin cash, Ripple, and Dash coin.
Some of these cryptocurrencies are actually not cryptocurrencies at all and are just created to serve as an asset class that are used like bonds, treasury bills or stockmarket shares even though they are marketed as cryptocurrencies. You have to be able to transfer it to others, others have to be able to transfer it to you. They have to do their research well and find out whether this currency fulfills the criteria of cryptocurrency or not.
As people are able to change and sell their US Dollar and buy British Pound, for example, they have to refer to the atomic exchange level. If the cryptocurrency fulfills these criteria, it fulfills some aspects of being a cryptocurrency. Some companies issue their own cryptocurrency and use a smart contract platform like ripple. Ripple does not replace the swift banking system where customers can complete international money transfer transactions. Others use Bitcoin cash and proof of stake where they buy Bitcoin directly and stake it by installing a soft copying system called a node that controls the wallet, yet they do not engage in any real mining.
They sold only a certain number of Bitcoin and retained the rest, thereby artificially controlling the price or value of one unit. However, if there are certain individuals who control the price of a currency, it is questionable whether such cryptocurrency fulfills the criteria of currencies. It's the block chain technology in which cryptocurrency is one of the products that is using the technology that's built on the blockchain technology that can be used for so many other purposes.
However, more and more people have started investing in cryptocurrency. In the case of inheriting minors, a guardian would be put in charge of their inheritance until they reached the age of He feared that most guardians were not trustworthy enough and ended up stealing the asset of those children. Cryptocurrency was his way of hiding his money online instead of keeping it in the bank. It is considered more useful as a transaction tool, especially buying and selling in installments because it reduces the time and money consumed in regular bank or international transfers that incur so many extra charges.
So, it is an instructing accounting standard for it, which will be equivalent and setting an accounting standard on anything that could be regarded as a valuable asset. It can be applied as a standard for accounting like any other currency in banks. However, some groups are against that arguing that is not an asset class since it has no intrinsic value. As reported by Corbet, Lucey, Urquhart and Yarovaya [38] , Bitcoin is found to have a place on financial markets and thus can be classified as something between gold and the US dollar on a scale from pure medium of exchange advantages to pure store of value advantages.
Bitcoins are usually measured in terms of their exchange rate to the Japanese Yen and US dollar as these two currencies Journal of Theoretical and Applied Information Technology 31st March For example, cryptocurrency can be included in the transaction records as its value is definite. The influence of Disruptive technologies on Islamic teaching and values within the financial realm and sharia concern towards adoption of cryptocurrencies has been investigated.
Just like Grab or Uber are common platform that add value to the economy, blockchain can also add value. It is especially designed to succeed an existing technology that is already in use. However, Islamic law also requires a transparent market.
So, follow a middle course in worship ; if you cannot do this, do something near to it and give glad tidings and seek help from Allah at morn and at dusk and some part of night. Harm must be eliminated. Hardship begets facility. In short, any good practice that leads to simplicity is accepted in Islam as long as it does not violate other teachings. Thus, if the new technology does not violate the rules of Islam, the way people use it determines whether it is accepted in Islam or not.
If people use technology to commit crimes, they violate the law. Technology is welcomed in Islamic law but people need to put it to good use without causing harm. For the Muslim whenever these things come across, you have to look at it from the Islamic perspective. You have to look at their benefits and you have to look at their dangers. It needs to be used in a good way.
Every technology has a good side and a bad side, yet most importantly, it has to conform with Islamic principles. Islamic law entails the condition that something benefits society, in the case of cryptocurrency by facilitating transactions. However, its advantage has to be weighed against the issue of uncertainty and misuse such as hacking and speculation.
You have to analyse it step by step and look generally which side outweighs to the best. On that right one can say it affects the Islamic perspective positively or negatively. He explained that disruptive technologies are technologies that are used to connect people who wish to buy and sell something or exchange or carry out transactions without actually seeing one another and without even knowing the location of one another.
These new forms of direct transactions are disruptive in the sense that they alter the nature of these transactions by minimizing the sharing of personal information. However, unless there is concrete evidence of a legal violation, these transactions cannot be ruled as not permissible in Islam.
And in the past the biggest technology that came out was the horse carriage where you put on a single horse or two horses or three horses or four horses or six horses depending on what carriage it is and it pulled you around that you travelled long distances and tired, then came the motor vehicle. These technologies are welcome in Islam as long as they do not cause any corruption fasad or enmity fitnah within the community.
In the past, the dollar is just about two hundred plus years old, the pound sterling is about six to seven hundred years old. And over time the paper currency was seen as inevitable in terms of security because you can no more carry gold, a bag of gold or a bag of silver coins around and move around the world … , so paper guarantees were created around.
The issue legitimizing paper currencies was legal tender meaning that it was backed by the government issuing it. People no longer carry paper money around, they just simply take their phone and transfer money and receive money electronically. So, already we have evolved.
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The product of said tax is pooled and reversed to a widely recognized Islamic charity, a different one elected every year by the community. At the same time, they reportedly started a partnership program to develop cashbacks, allowing a zakat system.
Once the project reaches completion on its infrastructure and financing cycles, it will use the DeFi weight to help develop the Muslim world with a simple, cheap, and efficient way of transferring funds between members of the Ummah — the community of Muslims — and to funnel funds from the outside to develop shariah-compliant projects all around the world.
As the Muslim world has always been divided on fundamental as well as annex matters — which is generally considered a good thing, as what can seem like endless quarrels from the outside is in fact what keeps a faith very much alive — many Muslims are waiting for a clear answer regarding the cryptos status in Muslim faith.
At the same time, many Muslims are also crypto afficionados and want the same thing. One of the endeavors of the MUSC Project is to bring to subject on the table in every country and discuss the matter until a theological decision can be reached and widespread, allowing all Muslim to enter the DeFi ecosystem once and for all and reap its benefits.
Why invest in the Muslim Coins project? The high demand in the cryptocurrency market strongly grew every year in the last decade. Every day sees new projects coming to life everywhere, but a large portion of the world population has kept out of it: Muslims. Although many Muslim countries have seen a peak growth in the use of crypto currencies, no project has built its deployment on this portion of the population nor did any project try to build its practices in compliance with their values.
And yet, the Ummah represents 1. The conjunction of the average economic growth rate of such countries and the ever-expanding adoption of crypto-related habits by their populations is what makes the situation right for an investment in the Muslim Coins project, with a promising project and excellent odds of development.
How Does It Work? We sometimes enter into partnerships with some of the companies that we cover e. We are very serious about our neutrality and manage the conflict of interest here by running entirely separate editorial and commercial teams who do not influence one another.
We regularly cover companies who are not our partners as well - the aim is to cover what we think the consumer needs to know about, not who paid for what. Our articles are updated periodically but we can't guarantee we'll be perfect every time nor that our articles will be up-to-date with absolutely all the latest changes. If you think we're veering off-course on our mission, tell us.
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