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Mufasa

Cryptocurrencies: THE FUTURE IS HERE

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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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1 hour ago, Mo- said:

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 99.9% being with normal things, whereas with Bitcoin it is likely the inverse (0.01% in normal stuff and 99.9% in sketchy). 

 

Sources?

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1 hour ago, Haku said:

100 - 99.9 = 0.1 0.01

-_-

 

haha i missed a 0.09 indeed!

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2 hours ago, Haku said:

100 - 99.9 = 0.1 0.01

-_-

only Haku can make maths look so beautiful. 

And I didn't understand any of this at all. 

I used to look out of the window in every maths lesson.

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5 hours ago, Breeze said:

only Haku can make maths look so beautiful. 

And I didn't understand any of this at all. 

I used to look out of the window in every maths lesson.

you seriously didn't understand that 100 minus 99.9 is 0.1...?? 

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28 minutes ago, superman said:

you seriously didn't understand that 100 minus 99.9 is 0.1...?? 

nope. I don't think in numbers. 

What's that dash on the equals?

Ok to be honest after you explained it, I get it. Haha

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19 hours ago, Mo- said:

 

19 hours ago, Haku said:

100 - 99.9 = 0.1 0.01

-_-

 

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.

 

Here is a more recent sources:

 

Quote

 

Criminals are dropping bitcoin in favor of other digital currencies that are harder for law enforcement to use in tracking activities in an anonymous corner of the internet known as the dark web, analysts said.

Although hard numbers on criminal activity in digital currencies are difficult to pin down, Shone Anstey, co-founder and president of Blockchain Intelligence Group, estimates that illegal transactions in bitcoin have fallen from about half of total volume to about 20 percent last year.

"Now it's significantly less than that," he told CNBC earlier this month, noting that overall transaction volume has grown globally.

 

A U.S. Homeland Security official confirmed to CNBC in a phone interview on Thursday that criminals are "looking more closely at other currencies like monero and ethereum."

"What the criminals are starting to see, and some of the trends we're picking up as well, is that bitcoin also works equally just as much against you as it does for you," said the official, who didn't want to be named.

https://www.cnbc.com/2017/08/29/dark-web-finds-bitcoin-increasingly-more-of-a-problem-than-a-help-tries-other-digital-currencies.html


 

 

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. 

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For what it's worth, I'm not adverse to the idea that cryptos might be haram. But I haven't been convinced by the reasoning. The "extreme gharar" seems the most problematic aspect to me. Frankly, I'm not sure I understand completely why any investment is not haram. But I see points 1 and 2 that you've provided as highly conditional/contextual and presumptuous. 

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1 hour ago, Mufasa said:

For what it's worth, I'm not adverse to the idea that cryptos might be haram. But I haven't been convinced by the reasoning. The "extreme gharar" seems the most problematic aspect to me. Frankly, I'm not sure I understand completely why any investment is not haram. But I see points 1 and 2 that you've provided as highly conditional/contextual and presumptuous. 

Extreme gharar is applied when some one buys bitcoins to merely sell it off later expecting a good profit.

Using bitcoin for purposes of transaction is entirely different story.

darulfiqh.com/shariah-interpretations-of-bitcoin

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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. 

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10 hours ago, Haku said:

Extreme gharar is applied when some one buys bitcoins to merely sell it off later expecting a good profit.

Using bitcoin for purposes of transaction is entirely different story.

darulfiqh.com/shariah-interpretations-of-bitcoin

 

Thank you, I will read this later today. Looks helpful.

 

7 hours ago, Mo- said:

 

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.

 

OK- Source?

 

Quote

 

 


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.

 

 

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.

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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.

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