mutayib ₿ Profile picture
Jun 8 32 tweets 7 min read
Why Bitcoin is the most Islamic Form of Money 🧵
What is Islamic finance? The primary two points of Islamic finance is that 1) Money is not a commodity rather a means of exchange - so you cant make money on money. You have to invest it and assume risk and share that risk.
Secondly, it is about real economy, not the perceived/derived values. Also we can add that Islamic finance is primarily based upon risk-sharing instead of fully assumed risk and that uncertainty is grabbled with justly for all parties
Can we change how Islamic finance is delivered to the end customer, so that it accords with the ideals of the Islamic Economic Model? That it may not be possible...but we haven't quite reached a final verdict on that.
Whatever the case we always need to create products that encompassed both letter and spirit of the law. And before that we need to find the most Islamic Form of Money to generate and allow just practices.
As long as Islamic Finance exists within the fiat system/banking environment it will always struggle. The soil of fiat created the fiat tree. The soil of Sharia needs to create the Islamic Finance tree. You can't use the fiat soil to create the tree of Islamic Economics/Finance
Money Creation: Gold - you dig, clean, sell. Bitcoin - you solve a mathematical problem, awarded a virtual coin. Fiat - you either print it (10% of money supply), or a bank finance someone's debt, and thereby you have immediately introduced new money will be 'paid' in 30/50 yrs
So all fiat systems are essentially haram simply for this reason - you sold debt to introduce new money in the economy, with basically no intention eventually to pay it back
Scholars say bitcoin is haram, because volatility, finances Terrorism, has no set rules, there is no asset that backs bitcoin - but all of these apply to fiat. Heck there is no form of money used today that is Sharia Compliant today, except for Bitcoin
The only box it does not check is that it must be gold, but that is debatable (in the past they used copper as well as a form of money, value placed lower than dirham). It is not manipulatable.
The way bitcoin works is the same exact way we have preserved the Quran. There is no central Quran in a glassbox in the Kaba. A Hafiz is a node, and if anyone makes a mistake, another hafiz will correct him. The nodes pass knowledge to others, verifying each other continuously.
They are the decentralized ledger. Hadith is the same, except that the preservation stopped at the time of writing them down, and after that they stopped continuing the creation of nodes (Hafiz). Bitcion is an economic system!
Bitcoin finance is the one thing that gold couldn’t solve - moving money across time and space in a very short time. With that in place, moving to bitcoin standard and abandoning the fiat standard can allow Muslims to relive the spirit of Islamic finance correctly.
Muslim bodies of Jurisprudential scholars are unfortunately arguing that Bitcoin is haram because it is not physical, but that is unfounded in the texts explicitly. The Hadith of the 6 ribawi items clearly proves that those 6 items can be used as a medium of exchange.
In other words the law is not explicit, and gives room for other items to take the place of what the medium of exchange is - and bitcoin is the best of them all. The scholars are falling into the same problem they fell into when the fatwas were made against the printing press.
For this reason scholars need to be cautious issuing edicts bcuz the detrimental affect that might happen to the Ummah. Saying bitcoin is haram as it increase in value/harder to mine & adopted in many countries, shows the detrimental affect it can have on the Ummah if it picks up
If the Ummah is poor in the fiat system, it will be even more poor in bitcoin system which is actually better for Islamic Finance. We need to give the keys to the more specialized experts who understand economics, finance, and the specialized fields and not an generalist scholar.
One's experience with Bitcoin is highly highly correlated with ones time of joining: the earlier you join, the more sats you get. It’s very straightforward. There is only 21 million. This will be the one of the latest and greatest reallocations of wealth in the modern day.
Can interest be charged in bitcoin? It can, but it will be severely limited because the bitcoin cant come out of thin air as it does in fiat (because central bank effectively guaranteeing the interest will be paid)
But with bitcoin, if there even is a central bank or some sort of financial institution it can’t guarantee anything because where will it get the additional bitcoin from? Mining? and also it can’t be sustainable, lest scalable.
Borrowers will be suckers in bitcoin standard bcuz thats riskier than risk-sharing model, which is the model most likely you will see under bitcoin standard: a form of risk shared financing, and yes some of it might be synthetic (from interest), but a good bit of it will be real
Prophet (S) was a مضارب - use merchant wealth for selling goods and services, and fairly distribute profit and loss. Adopting Bitcoin will switch economy form credit to asset/equity based economy (most Islamic), and capital will switch from low to high economic impact businesses
The philosophical basis of bitcoin is in direct correlation with Islamic values, including low time preference and delayed gratification, anti-consumerism, anti-capitalism, pro-socio-economic justice (reduction in wealth inequality and conflict between people) -> anti-war!
The economy will be like Ramadan Fasting, it might be a little tough, but always satisfactory and worth it. In addition to this, it was only in the time gold was standard that the most impactful and real innovations happened, and with the bitcoin standard, this can be repeated.
In fiat - the richest people are the biggest borrowers, because they hold a lot of hard assets so they can borrow against them so that they can continue to borrow more Fiat. The borrowing is essentially a tax on the rest of society and a subsidy to them.
In all systems you want to die with most assets, but in fiat you want to die with most debt, because you paid the least, you owned the most, and you are never paying that back. It is the Muslims who pay back the debt of the rich unwillingly, because Muslims take no interest
Fiat is conducive to conflict simply because of inflation
- people are being robbed by who knows, so minorities are otherized and persecuted, and increases civil conflict. Furthermore, each party/country wants power to control the money supply to suit their political needs.
In #Bitcoin standard - it will be the best way to bring all religions together because all religions are about assuring people are well off, thieves are punished, power is held accountable, and assuring justice in society. Bitcoin inherently performs this task.
#Bitcoin is the most unifying economic idea. Fiat-ers say bitcoiners are the most closed minded people, but the fact is, just as #Islam and Muslims are diverse, so are bitcoiners so diverse.
Just as #Islam has helped billions upon billions, #Bitcoin has this capability as well. It only make sense that Muslims adopt #Bitcoin
Welp didn't realize this would be shared/promoted. I simply make twtr my notebook dump, so I can retain some knowledge while learning, and if anyone comes across it they can benefit.

Having said that, these are my notes taken from @saifedean's podcast as @harris_irfan as a guest
Must give credit where it's due, andnI thank them profusely

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