Referring to Islam , since there are many definition interpretations of mal among Sharia scholars, the definition due to the different ways of expression is closely examined. The following are some definitions: Mal is a human tendency that is able to be stored over time.
- paypal bitcoin app.
- purchase bitcoin with card.
- my bitcoin wallet is out of sync!
- Analysis of cryptocurrency’s characteristics in four perspectives.
- bitcoin cash chart live.
- how hard is it to liquidate bitcoin.
- mitsubishi carisma btcc;
From the definition above, there are two keywords that describe mal , which is something that is desirable and something that can be stored over time. Furthermore, Islam argued that mal is something for which there is a lawful benefit. Hence, something that does not give benefit, for example, insects, and is unlawful in Islam, for example, alcohol drink, is not considered as mal. The requirement for the mal to be exchanged is mutaqawwim. Mutaqawwim refers to lawful item or subject for use in Sharia. There two criteria for any item that can be traded and exchanged, which is tamawwul and taqawwum.
Referring Hayder , tamawwul refers to anything used as mal. Taqawwum refers to anything that is lawful according to Islamic Law, as a result of being considered valuable. Thamaniyyah is a monetary value or the key element in an asset that is eligible to serve as currency and money. Thamaniyyah has two functions, which are as an independent standard of value and as a unit of account. Since it is an independent standard value, it must have stability and should be worldwide acceptable.
This refers to being the main reference point and it is a benchmark for people to send prices and record debt. The data are secondary data obtained from peer-reviewed journal articles, conference papers review, working paper, and Sharia consultant report addressing the legality of cryptocurrency. The literature review analysis includes the following steps: material collection, descriptive analysis, discussion with people in Sharia competency, and intuitive-subjective material evaluation.
As mentioned above, referring to Meera , money can play an efficient and effective role if it meets the seven requirements. First of all, this paper will examine whether cryptocurrency represented by Bitcoin has fulfilled the seven requirements compared with other currencies Table I. From Table I , it can be observed that Bitcoin has the same characteristics with fiat currency that fulfills six of the seven requirements.
Both of them do not have intrinsic value. The stable value requirements refer to the store of value function. All of the currency can be used as a store of value, but the value may decrease due to risk that may happen. For the durable requirements, in commodity currency is stated mixed depends on the commodity type. For example, commodities like wheat or salt are perishable through fungal, pest, water, fire, bacterial activity and are also destroyed by the process of consumption. Despite its highly volatile price, the value of Bitcoin exists when its users have trust to use it and accept it as payment.
It needs vendor acceptance, user acceptance and innovation. Hence, in terms of the nature of money, Bitcoin is accepted as money, with notes: it is trusted, accepted as payment and becomes an alternative in this current internet-fueled global market. Referring to Proctor , the legal concept of money is broader than the concept of currency. Money can be created by a private party not only paper and coin money but also demand deposit , but it should be denominated in currencies that are issued by the central bank and should be accepted as a medium of exchange within the country.
Hence, referring to the legal concept, Bitcoin is not acceptable as money. Although Bitcoin is accepted as a medium of exchange by thousands of merchants throughout the world, some countries have issued the regulation to ban Bitcoin and other cryptocurrencies due to bypassing of the central bank authorities. Bangladesh, Bolivia, Ecuador and Kyrgyzstan have made a clear decision that Bitcoin is illegal. In the meanwhile, other countries that do no state that Bitcoin is illegal still review regulatory implications.
Table II shows the regulation implication of Bitcoin acceptance. The UK has commissioned the Treasury to conduct studies on cryptocurrencies regarding their role in the UK economy. Palestinians and Russians have also started to develop their own cryptocurrencies. In the case of Palestine, cryptocurrency will be the answer for the scarce of money printing. In Indonesia, the legality of cryptocurrencies as a currency will be defined on the basis of the President of the Republic of Indonesia In Article Number 1 and 2, the following is stated: The currency shall be the money of which issued by the Unitary State Republic of Indonesia of which hereinafter referred to as Rupiah.
Furthermore, under Article 21 on the Use of Rupiah Paragraph 1, it is stated that Rupiah shall be used in the following cases: each transaction whose objective is for the payment purpose;. Related to Article 21 paragraph 1 above, Article 33 paragraph 1 on Criminal Provision stated that anyone who does not use the Rupiah: each transaction whose objective is for the payment purpose;. Referring to the Law on Currency Act above, the Government of the Republic of Indonesia strictly stated that the only legal payment in the territory of the unitary state of the Republic of Indonesia is only Rupiah.
Furthermore, related to Bitcoin, Bank Indonesia held the Press Release regarding Bitcoin and other virtual currencies, referring to Law Number 7 the Year on Currency Act, and stated that Bitcoin and other virtual currencies are not valid currencies or payment instruments in Indonesia. Since the Currency Act did not strictly state the legality of Bitcoin, the popularity of Bitcoin was booming in Indonesia. The users of Bitcoin in Indonesia were around one million. Surprisingly, the number surpassed the investor numbers in the capital market, which was around , investors. Virtual currencies mentioned in BI Regulation above are the digital currencies that are not issued by any monetary authority and are obtained by the way of mining.
The Governor of Bank Indonesia stated that the main reason for prohibiting the virtual currencies is to implement prudential principles, safeguard business competition, risk control, consumer protection, and also to prevent crime, such as money laundering, terrorism financing, and maintain the sovereignty of the rupiah as a means of legitimate payment in Indonesia. The result of the BI regulation enforcement is a decrease in Bitcoin users, which is around , users nowadays.
From an economic perspective, this paper analyzes whether cryptocurrency will fulfill the characteristic of a successful currency. It should have the functions as a medium of exchange, an account unit, and a store of value. Table III consists of the comparison among the currencies. Currently, the cryptocurrency does not fully meet the three characteristics of a successful currency. A function as a store of value is limited by high price volatility. After five months, the price rocketed to USD 19, per Bitcoin. In five months, it reached percent growth or percent per month.
In six months, the price declined to USD 6, per bitcoin or dropped to 11 percent per month. In Figure 3 , the high volatility of Bitcoin price compared to gold is shown.
Bitcoin surpasses $50,000 for first time as major companies jump into crypto
Therefore, it is clear that Bitcoin does not meet the store of the value function. Phillip et al. The second characteristic is as unit of account functions. Referring to Yermack , Bitcoin does not seem to establish itself as an account unit or a store of value. But currently, there is a piece of evidence that cryptocurrencies are used as a unit of account.
The bitcoin revolution can be hard to find at the mal
The mechanism is by valuing the goods and services based on cryptocurrency exchange rate. For example, sellers who accept the cryptocurrency payment will quote a price in fiat currency, with prices in cryptocurrency based on exchange rates at a given point in time. The third characteristic is as medium of exchange functions. Since cryptocurrency is not a legal tender, the transactions that accept cryptocurrency must involve two parties that have an agreement regarding the acceptance of cryptocurrency. In general, Sharia scholars have two different opinions. The first group argues that cryptocurrency is prohibited by Islamic Law haram.
Another group has opinion that it is permissible in Islamic Law halal. The main reason of their statements are as follows: The negative publicity that cryptocurrency is easy to use for illegal activities; hence, they buy it in order to avoid and hide from government or authorities.
- Analysis of cryptocurrency’s characteristics in four perspectives | Emerald Insight.
- • Bitcoin vs. VISA energy consumption | Statista?
- bitcoin ka matlab kya hota hai!
- curs btc lei.
- Bitcoin's 3 Fatal Design Flaws - Positive Money.
- What is bitcoin?;
- How Bitcoin Works.
Cryptocurrency has no central authority to monitor and audit its systems; hence, it is not a legal tender. Cryptocurrency transaction is open to speculation excessive gharar.
Related Stories
The miners of cryptocurrency are based on zero sum game. If the miners succeed to solve mathematical puzzles, they gain cryptocurrency, otherwise they get nothing. Cryptocurrency is not backed by anything. Even Bitcoin is invented by an entity or a real person. The consideration is that cryptocurrency meets the criteria and definition of property mal and money because of the following reasons: treated as valuable thing among people;.
Referring to the consideration of Sharia scholars, there are some subjects that can be analyzed in terms of Sharia Law. Basically, the Sharia scholars argued regarding cyptocurrency for following items: Whether cryptocurrency is a property mal? Referring to Hanafi scholars, there are two attributes to consider something as mal or property: It would be desirable for a human being. The current market capitalization of Bitcoin is around USD16bn, with average volume transaction per day being ,04m.
The high demand of Bitcoin indicates that Bitcoin can meet the desirability criterion.
In terms of storability, Bitcoin is encoded within the blockchain and is entered on the distributed ledger system. For example, when Client A makes payment to Client B. The transaction is settled by the miners who solve the cryptographic puzzle as a part of the validation process.
Cryptojacking definition
The miners who find the solution faster will receive Bitcoin as a reward. The copies of transaction records will be kept in the distributed ledger that can be accessed in the network. Hence, Bitcoin can be considered as property mal. As a currency, we have to examine whether cryptocurrency has Thamaniyyah criterion, as previously mentioned above: an independent standard of value; and.
Thamaniyyah demands that the currency should give a clear reference to its value. We need the value of fiat currency to determine the value of cryptocurrency. Even though the cryptocurrency does not meet the first criterion, since it is a digital currency, it is can be used as a unit of account. As mentioned previously, the mechanism is by valuing the goods and services based on cryptocurrency exchange rate.
Thus, the cryptocurrency still can be used as a medium of exchange. Referring to Adam , something that does have thamaniyyah can still be traded as a medium of exchange in a transaction. But the use of cryptocurrency as a medium of exchange meets challenges regarding its status as a legal tender. Regarding the legal tender issue, the government makes something as a legitimate means of payment and it must be issued by the central authority.
One of the considerations mentioned by Sharia scholar argued that cryptocurrency is forbidden haram , as it has a high price volatility. It is referring to the terms of speculation.