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Mo-

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Posts posted by Mo-


  1. 31 minutes ago, AROwnen said:

    Do we say the word blessings when describing something good from Allah(set)?

     

     

    We do indeed. 

     

    The Arabic word for blessing is barakah, which is regularly used in Islamic greetings, prayers and remembrance. 

    In fact, the full Islamic greeting contains it:

    Salamu alaikum wa rahmat Allahi wa *barakathu*

    Which translates to:

    Peace and the mercy and blessings of Allah upon you.

    I hope this was of help Uncle Owen :)


  2. 9 minutes ago, Summer.Haze said:

    Is there any reason why I'd suddenly gain 4-5 pound in 2 weeks? 😕  I mean I heard metabolism decreases after age 30 or something, but I didn't realize it happened THAT suddenly. There were no significant changes to my diet... I'm 5' 4" and a couple of weeks ago I was at a steady 145-146 lbs for the last one to two years, and now it's at a steady 150-151. 😕

     

    Slows down even earlier than that. Mine has started slowing down and I'm only 24.

     

    In winter people tend to gain weight though. 


  3. On 6/28/2018 at 10:16 PM, Breeze said:

    England underestimated Belgium. 🤦‍♀️ Kept all their best players out.

     

    It was intentional so that we'd have an easier knockout stage. Coming second in the group means England wouldn't have had to face Argentina, France, Brazil or Belgium until the finals.

     

    Instead we will face Sweden, then Russia/Croatia and one of the aforementioned (most likely France) in the finals. 


  4. 5 hours ago, Breeze said:

    My question is about astrology and whether it's permissible? For eg. Compatibility charts. 

     

    In history there's been mystical astrology by Sufi mystics.

     

    So my question is whether palmistry or astrology charts are acceptable. I mean I don't believe every word, but some of what is written is quite accurate. Then again, if people base their relationships on that, then that's worrying?

     

    Astrology is both kufr and shirk. 
    If you believe stars cause certain events then it is shirk. If you believe you can discern the unseen by them it is kufr. 

     

    Al-Bukhaari said in his Saheeh: Qutaadah said: “Allaah created these stars for three purposes: to adorn the heavens, to stone the devils and as signs by which to navigate. Whoever seeks anything else in them is mistaken and does not benefit from them, and he is wasting his time and effort in seeking something of which he has no knowledge.” (Saheeh al-Bukhaari, Baab fi’l-Nujoom, 2/240) - source: IslamQA

     


  5. 1 hour ago, Mufasa said:

    But I'm not sure anyone who has faith in (and knowledge about) Bitcoin thought it was going to just keep surging. Most of the analyses I read predicted cryptos would drop hard, hence the HODL motto and cautioning against buying out of FOMO.

     

    I'm not sure that the fact that it's wiped over 50% of its value is any more indicative of its long-term prospects than its peak was evidence in favor of its long-term prospects. Neither seem to mean much in terms of its long-term potential; I assume it will stabilize at some point- from what I've heard, maybe between 2k or 6k.

     

    Do you think it's going lower?

     

    Thanks to transfer fees bitcoin no longer has any underlying value. As prices diminish miners will have lower incentive to keep mining new blocks due to difficulty involved, and when the cost of electricity + mining rig > profit from mining bitcoin then no transactions will get done because no new blocks will get mined. 

     

    Transaction times already were a major issue prior to the frenzy and as the frenzy dies out they’ll only become an even bigger issue.

     

    Bitcoin has a fundamental design flaw in that it is dependent on an ever expanding network of miners due to the increasing difficulty of each new block. There is the ultimate trade off of time vs computing power, both of which determine cost. 

     

    Maybe other cryptos address this design flaw like ETH with its proof of stake model or XRP with the proof of consensus model. But anyone investing in the long term should do so after this bubble pops so they don’t get ripped off. 


  6. 10 minutes ago, Mufasa said:

    That's fair. But if you are comparing cryptos to the dotcom bubble (a comparison which I don't disagree with), would it have been haram to invest in Amazon or Google in '99?

     

    All companies that survived the bubble had immense financial discipline. Amazon is the greatest example of this, and there are in depth financial analyses into the operation which Jeff Bezos ran but the key takeaway is he was one of the few to go 'slow and steady'. Google didn't have its IPO (initial public offering, where shares become available to the public on exchanges) until 2004 which was well after the crash and all investors prior were the same institutional investors who are warning against Bitcoin today.

     

    Some companies survived the bubble its true, but let us look at some of those survivors:

    • Yahoo had a price of $108.7 at the peak of the dotcom bubble, when the bubble burst and settled, it had a price of around $5, representing a loss of 95.5% on investment. It never recovered.
    • Amazon was valued at $106.7 at the bubbles peak, but when it settled was valued at around $15, an 86% loss on investment. Today it is valued at $1294.58, which would be an annual return of 15.87% compounded. Comparatively, DJIA has had a 5.24% annual return over the same period. 
    • Ebay doubled in share price over the year preceding the bubble, however, rather than losing more than 90% of its value, it simply returned to the price it held previously, with natural growth/loss occurring over time. However those who bought it at the peak lost 50% of their investment. Ebay has had a 8.73% compounded annual return since then until now. 

    Analysing the information, sure what investors bought was not worthless, but it was excessively overvalued and they suffered massive losses. Of the few companies that survived, most declined further or flatlined. Of around 2800 companies that went public during the dot-com bubble and the events preceding it, Amazon and Ebay were the exceptions with the rest all being losing investments. Given then, the enormous amount of risk, it is difficult to say that Amazon or Ebay really paid off on a risk-adjusted basis. Yes, they offered higher returns on the market, but the failure rate of the industry they were in was incredibly high.

     

    Now lets add another fact to the mix: listed companies are very transparent, with annual reporting every year revealing their cash flows and growth, from which analysts can deduce valuations. Cryptocurrencies on the other hand don't have cashflows (unless it is a proof of stake model like Ethereum where validators use their 'stake' to validate a transaction and charge a fee). This means their value is tied to being a modicum of exchange (in the case of proof of work like Bitcoin or Dogecoin) or network facilitator (like in the case of Ripple). The first can be estimated based on the volume of transactions on the ledger, but the second is quite opaque because the valuation of the network facilitation capacity of the Ripple network isn't in the public domain.

     

    This means that from a financial standpoint at the very least, cryptocurrencies could be considered even more risky than tech companies in the dot-com era boom. Right now there are 1469 cryptocurrencies with a market cap of $630bn. How many do you think will survive, given the survival rate of the dot-com bubble, and on a risk adjusted basis, are any of them even worth it? That is ultimately for you to gauge. Of course I have the benefit of hindsight, but many notable investors (Warren Buffet of course comes to mind) refused to buy into the craze. 

     

    From an Islamic perspective I would argue the situation of investing in the tech bubble would've garnered different answers from different scholars at the time, but if we are trying to objectively measure gharar then crypto definitely presents a larger risk than the dot-com bubble did and the fact it is even less transparent, and even more so that unlike the dot-com bubble, most market analysts actually view crypto as a bubble. I would probably say yeah, it would've been haram to invest in the dot-com bubble based on my perception of what constitutes extreme gharar.

     

    Ultimately what it comes down to is what your expectations are of the situation because every single investor has their own preferences and perception of risk. The fatwa was a generalised one (given the consensus of most finance professionals on the matter), but if you don't view crypto as having extreme gharar based on your own conclusions, nobody can really force you to adopt another conclusion. The general person isn't a finance professional or tech expert and for them investing in crypto ultimately has to by definition pose extreme gharar.

     

    tl;dr: 

    • The fatwa was a general one
    • Crypto bubble is more risky than the dot-com bubble for investors (thus more gharar)
    • It is difficult to answer things in hindsight
    • Gharar itself is a subjective matter (just like risk)

  7. 22 hours ago, Mufasa said:

    To Mo, because I feel like I'm being pulled into an argument I wasn't going for at this point:

     

    -What I noted in the beginning (and which everyone knows) is that the future of cryptocurrency is uncertain. Even if cryptos take off--or if blockchain does--that means nothing of the future, for example, of Bitcoin, which is simply the first--not the most efficient. So yeah, it's based on a lot of excitement; the thing is, the value has flailed a lot in the last few months, but it will ultimately correct itself. I think that reflects that there is a lot of *real* money in there and people are going to let it sit. Right now a lot of it is driven by people fearing they will miss out--that's the nature of it being new, now mainstream, and quite easy to buy-in. But we don't know it's future. You might *think* it's a bubble. You don't know it's a bubble.

     

    -Well, I definitely do not think that a firm like Bridgewater is going to be investing their clients or advising others to invest in Bitcoin. There's no doubt it's a risky investment, which I've noted from the very beginning. (though, their clients would not have been complaining had they had the foresight to invest a few years ago, would they?) However--and this is based on subjective experience--there are 'tons' of young people working at companies like Bridgewater who are personally investing in Bitcoin. This I know from friends who work at similar firms in New York. While I don't know much about finance, since I've become intrigued, I have you on your anti-crypto crusade, but I do also have them whispering in my ear too. They're obviously not putting all their money in cryptos; but they are diversifying within the crypto world and betting on it to work out.

     

    -But none of this really addresses the issues I have. I have no delusions about whether cryptos are a *safe* investment. But where's the hadith that says it's only OK to invest if global investment corporations A-Okay it?

     

     

     

     

    1. The thing is, it is behaving exactly as a bubble does. There is a broad consensus on this amongst financial professionals. It highly resembles Dotcom bubble of the 90s albeit at a far more limited scope (for now). 

     

    2. Bridgewater is a hedge fund. They aim to invest in high risk strategies to get a return and they don't advise others. They use numerous strategies but their hallmark strategies are all quant strategies, which means they really don't care for the underlying asset type but are focused on maximising returns independent of market risk. Cryptocurrencies are very much the type of product they would use in building their portfolio (using both long and short positions). Most hedge funds using quant strategies like Bridgewater's typically invest in bubbles because they can use these products to adjust the risk of their portfolio with less capital than traditional investments require.

     

    3. It isn't that it is only ok if global corporations say the product is fine, it is the fact that amongst finance experts the broad consensus is that Bitcoin is a bubble, and that bubbles are genuinely accepted as being markets of extreme gharar. 


  8. 8 hours ago, Mufasa said:

     

    I don't doubt what's in these articles. But it's not really what you claimed in your first post. It doesn't say anything about those who are interested as being "amateurs" - that's your extrapolation. I kind of doubt a majority of traditional investors have any clue about, let alone totally understand, Bitcoin, however. The first article actually indicates that traditional investors, though once skeptical, are becoming increasingly interested in Bitcoin. 

      Reveal hidden contents

    "Its price has taken off this year as mainstream investors have become more interested."

     


    "This month, investors will be able to start trading bitcoin futures via the Chicago Board Options Exchange and Chicago Mercantile Exchange."

    "New York's Nasdaq plans to launch its own bitcoin futures in 2018."

    "Big institutional investors such as hedge funds and assets managers have largely stayed on the sidelines. But some experts predict they'll move into the market in the coming months, despite skepticism from the likes of Warren Buffett and JPMorgan Chase (JPM) CEO Jamie Dimon."

    "Some industry insiders are incredibly bullish. Arthur Hayes, CEO of Hong Kong bitcoin exchange Bitmex, predicts prices could hit a mind-boggling $50,000 by the end of next year, driven by the flow of money when institutional investors "pull the trigger" on investing in the digital currency. Octagon's Chapman is willing to stick his neck out even further. He thinks it will go above $100,000 before 2018 is over."

     

     

     

    I feel like we're saying the same thing here? But I still don't understand how you can say it's not also a currency. It depends upon being a currency that others are using to have any value to be able to transfer funds, no? Like, if it were just a private technological tool, not available as a currency to the public, it wouldn't work. Right?

     

    1. Amateur investors are what we call retail investors, i.e. nurses, cashier clerks, student hobbyists, etc., using their own money to invest. Professional investors are people who make their living off investing other people's money for them, such as fund managers who work in private equity, venture capital, hedge funds, etc. Most jurisdictions also have a legal term for people they refer to as qualified investors, but this is usually simply determined by net worth. The foremost investors in blockchain have been large financial 

    institutions (which is why a lot of them are working with Ripple and have hired the Ethereum team to consult for them), contrary to what you stated they in fact know a lot about cryptocurrencies, it is technically their job to know. 

     

    The article states:

     

    For much of this year, it's mom-and-pop investors who have been buying in.



    Many are in Japan and South Korea, where recent regulation changes have made it easier to trade bitcoin, according to experts.

     

    These are the people driving the speculative Bitcoin bubble (and the same for wider crypto).
    The reason financial institutions are getting involved with Bitcoin itself isn't because they are buying into Bitcoin, but because there is a profit to be made from providing the service of clearing Bitcoin futures, of selling Bitcoin to the handful of people who plan to open 'cryptocurrency funds', etc. Veterans of finance like Ray Dalio (CEO of Bridgewater, the world's largest hedgefund) and Larry Fink (CEO of Blackrock, the world's largest asset manager with nearly $6 trillion assets under management) have both declared Bitcoin as a bubble and kept away from crypto in general. 

     

    Of course Bitcoin industry insiders will be bullish, they think that Bitcoin is going to be adopted as a global currency. But ask yourself this question: do you think the governments of the world which unanimously use a central banking system are going to forego their monopoly on money? Not a chance.

     

    2. The creators of Ripple don't expect people to go out and buy stuff using Ripple, and the manner in which it is designed (private network, proof of consensus, limited supply), means it doesn't operate as a currency. It is an essential part of the communication protocol, but people using the Ripple Network won't transfer in XRP, they'll be transferring USD, GBP, Euros, etc. XRP will only be used by financial institutions for clearing. 

     

     


  9. 1 hour ago, superman said:

    I wonder why bubbles are bad for the economy? It's not like that people wasted got destroyed - it just got given to someone else.

     

    Because unexpected outcomes mean people misvalued things and it shifts them away from their optimal consumption. It means that instead of wealth being properly allocated, it went into overpriced assets and thus represents an overall loss (this is reflected by economic contraction, aka recession). 


  10. 3 hours ago, Mufasa said:

     

    OK- Source?

     

     

    I don't get this. You can't say "They aren't aiming to create a cryptocurrency" when they literally have done so--built around the same idea of a public/consensus-based ledger (though the release of 'coins' is managed differently than the others). They're trying to use this currency toward a new transfer system. But the new transfer system relies on the new currency.

     

    If it's "useless to launder money," then your point 3 is not relevant to Ripple? That was my question.

     

     

     

    1. http://money.cnn.com/2017/12/07/investing/bitcoin-what-is-going-on/index.html - the fact most BTC investors are small time amateur mom and pop types is similar to the pool of people who invest in Forex CFDs. 

    Most market experts also believe Bitcoin is a bubble - https://www.cnbc.com/2017/12/12/80-percent-of-wall-street-economists-strategists-believe-bitcoin-is-a-bubble-survey.html - that 80% would probably be closer to 95% if discounting the people who answered "I don't know". 

     

    2. Ripple's founders are more interested in the platform. Ripple itself isn't supposed to be used as a medium of exchange, but as an aid to the communication protocol. This means they don't plan for it to be used as a currency at points of transaction. Not to mention, there is a limited amount, it is a private network and operates a proof of consensus model to verify transactions.

     

    3. Point 3 is not relevant to Ripple, that is correct. 

     


  11. 4 hours ago, Mufasa said:

     

     

    Bitcoin has grown exponentially since this study (a methodology of which seems fishy imo). Bitcoin's really mainstream now. I know tons of financially savvy people who have bought in simply for investment-sake. Mainstream media outlets now cover crpyto-market changes. I think y'all are just late to the game.

     

     

    But all of this is also relevant specifically to Bitcoin or currencies, like monero, which have been used for this sort of stuff. I assume a company like Ripple, which is trying to build relations with actual banks, would not be used for these purposes. 

     

    I've been following cryptos since 2013. 

    Most people in financial services are extremely skeptical of Bitcoin. The same amateur investors that are attracted to it are the ones who were attracted to CFD Forex trading, except the difference being with the massive price rises in crypto people with 0 (or in fact a negative understanding) of financial markets such as housewives from Japan and Korea are throwing their money at it. The fact is, BTC doubled in value in less than a month and has also lost half its value within less than a month, that isn't the behaviour of a normal asset.

     

    Ripple is on a private blockchain, so it is useless to launder money with. They aren't aiming to create a cryptocurrency but they are using blockchain to create a new transfer system. You can consider XRP to be similar to a stock owning the RippleNetwork but without voting rights or cash dividends. 


  12. 11 hours ago, Mufasa said:

    Thanks for the info from the shaykh, Mo. The breakdown of different definitions/concepts is helpful. 

     

    I do have a few short follow-up questions for you. No need to ask the shaykh, unless you so choose, but your opinion (or others) is appreciated.

     

    -1. I understand this point, in theory, but doesn't it seem odd to bring it up in terms of Bitcoin and living in the UK? That "several governments have instituted bans on it" does not make it illegal in countries where such bans have not been implemented, like the UK. That there is certain licensing needed to sell Bitcoins from dollars (at least in the US) implies some degree of sanction by the government.

     

    -2. This I see as the strongest point - hence I started this thread to see how others feel. It doesn't feel like well-earned money, unless you're actually a crypto-nerd deeply engaged with the e-sphere. But nor do investments of other sorts tbh. Is there any way to draw a line between "extreme gharar" and an acceptable level of uncertainty? Or is it a matter of opinion?

     

    -3. Is this a purely contextual/time-specific thing? I noticed you said "currently." This seems a similar point to the one Haku made, but I just feel very iffy about it at this point. I have no doubt that, when Bitcoin was running at a few bucks a coin, it was dominated by sketchy stuff. But it's now way beyond that. On the other hand, we know that the value of the US dollar is benefitted by things like war, and many of those involved with the dollar are involved in drugs, porn, weapons, etc..

     

    1. My understanding at least was that it comes from the idea that we live in an age where currencies are regulated, and an unregulated currency upsets the current order. It can also be seen as relevant to the UK because a large number of Muslims conduct foreign transactions through remittances to places like Somalia, Pakistan, Bangladesh, etc., and transparence in these remittances and where they are going is really important on a national level for reasons of security.

     

    2. Extreme gharar is probably best seen as anything resembling a bubble. If price picks up suddenly for no visible and apparent reason, and a large number of experts in economics/markets call an event a bubble, then it holds extreme gharar.

     

    3. With crypto in general numerous experts have stated that it is primarily used for money laundering, typically for drugs, illegal weapons and other services outside the scope of the law. It may be accepted for use by various vendors, but BTC transactions by these entities are far and few. Re US dollar benefitting from the stuff you mention: the primary driver of the US dollar is by and large the US consumer market, which remains until today the largest in the world. To put it simply, the situation you describe of the US dollar is the inverse of Bitcoin. I would say probably less than 0.01% of US dollar dealings go into sketchy stuff with 99.99% being with normal things, whereas with Bitcoin it is likely the inverse (0.01% in normal stuff and 99.99% in sketchy). 

     

    edit: bad maths 

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