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Meesum_Mtl

Virtual Currencies

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11 hours ago, hasanhh said:

What is his rational?

Personally, without knowledge of any fatwa, my religious view is that the volatility is so high as to be to similar to gambling PLUS there is no physical material underlying anything thing that can be valued. Worse than a derivative.

It's volatility is high, yet it is not necessarily gambling nor all people invest in it for that reason.

Some find fiat currency useless or obsolete in the future, and decide to invest in cryptocurrencies in order to support development and hold them (proof of stake) to become a real thing in the future. If one dedicates time to their study, one may find they would solve many real world problems, save us time, protect our privacy, reduce our transaction fees, making smart contracts, etc.

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On 1/1/2018 at 7:23 AM, .InshAllah. said:
 

Sayyid Sistani:

Question: Is it halal to buy and sell electronic currency such as bitcoin?

--

In the Name of Allah, the Beneficent, the Merciful

yes

Wassalamu Alaykum

Alright, so I messaged grand Ayatollah Sistani via his website the following questions

 

Question: Salam,
is it permissible to buy/sell Bitcoins or Cryptocurrency as we do stocks in order to benefit from them financially?
Thank You

And have received the following response

In the Name of God, the Most High

 

سماحة السيد حفظه الله لا يبدي رأياً في أعمال مثل هذه الشركات وكذا في العمل معهم.

His Eminence, grand Ayatollah Sistani does not  express his opinion in regards to the activities of such companies as well as working with them.

 

 

May Allah grant you success.

www.sistani.org

Istifta Section - Office of His Eminence Al-Sayyid Ali Al-Sistani

Edited by Meesum_Mtl

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Religious aspect aside, buying/selling virtual currencies is pure speculation - high risk/high reward.

The reward is the rapidly increasing value in virtual currencies. 

The risk is they can depreciate just as quickly.

In some ways, virtual currencies are just like monopoly money. I can be a millionaire in monopoly but that currency is useless in the real world. With so little that we can do with virtual currencies, we are giving up hard currencies such as dollars and pounds and buying a worthless tokens or certificates hoping it will be worth a lot more in the future. Where is the sense in that?

It would make sense if a virtual currency was backed by a commodity (oil, soya, cotton, etc.) or something with intrinsic value (gold, diamonds, etc) but in reality they are ONLY backed by their own hype.

As we see more and more virtual currencies come online, we will see a reduction in their hype followed by a reduction in their value.

And if any currency threatens the petro-dollar, you can good bye to it faster than you can good-bye.

I would invest in virtual currencies as a short term strategy (5 years or less).

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1 minute ago, shiaman14 said:

In some ways, virtual currencies are just like monopoly money. I can be a millionaire in monopoly but that currency is useless in the real world. With so little that we can do with virtual currencies, we are giving up hard currencies such as dollars and pounds and buying a worthless tokens or certificates hoping it will be worth a lot more in the future. Where is the sense in that?

Not true, you can convert your cryptocurrency to USD anytime you want to cash out, so they are not 'worthless' as you say, they have real value to them.

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4 minutes ago, Hassan- said:

Not true, you can convert your cryptocurrency to USD anytime you want to cash out, so they are not 'worthless' as you say, they have real value to them.

I was referring to when you are holding them. I can be a millionaire in bitcoin but can I buy with it? Nothing unless I convert it back into a hard currency.

If bitcoin shuts down tomorrow, what can you redeem your coins for?

This is why I think it is a good short-term strategy. Buy it today, hold for a few years and sell back at the onset of decline.

Edited by shiaman14

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13 hours ago, shiaman14 said:

I was referring to when you are holding them. I can be a millionaire in bitcoin but can I buy with it? Nothing unless I convert it back into a hard currency.

If bitcoin shuts down tomorrow, what can you redeem your coins for?

This is why I think it is a good short-term strategy. Buy it today, hold for a few years and sell back at the onset of decline.

Actually, more and more website and stores are accepting bitcoin payments (see link) https://99bitcoins.com/who-accepts-bitcoins-payment-companies-stores-take-bitcoins/. When crypto currency first made an appearance with bitcoin, it was mainly used on the dark web as a currency due to the difficulty in tracing back the buyer and seller.

Furthermore, you are viewing crypto currency simply through the lens of bitcoin when many such currencies exists. As with stocks, to mitigate such risk you must diversify your portfolio to ensure that if one currency drops the other currency will thrive (example: invest in Bitcoin, Ethereum, Ripple). With the recent drop of bitcoin, ripple had managed to stay a float (see second link posted https://xrpcharts.ripple.com/#/markets/XRP/USD:rhub8VRN55s94qWKDv6jmDy1pUykJzF3wq?interval=1d&range=6m&type=candlestick (one year or max view, candlestick chart).

As with any investment, it's value can drop and be worth nothing (see Enron Scandal). Any risk averse individual should not get into crypto currencies. 

Holding the currency for a couple of years is actually considered a long term strategy. I do agree with you that some of the crypto's are short term trade strategies based on their volatility, but others with enough research can be held in the long run depending on what they are used for.

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8 hours ago, Meesum_Mtl said:

Actually, more and more website and stores are accepting bitcoin payments (see link) https://99bitcoins.com/who-accepts-bitcoins-payment-companies-stores-take-bitcoins/. When crypto currency first made an appearance with bitcoin, it was mainly used on the dark web as a currency due to the difficulty in tracing back the buyer and seller.

Furthermore, you are viewing crypto currency simply through the lens of bitcoin when many such currencies exists. As with stocks, to mitigate such risk you must diversify your portfolio to ensure that if one currency drops the other currency will thrive (example: invest in Bitcoin, Ethereum, Ripple). With the recent drop of bitcoin, ripple had managed to stay a float (see second link posted https://xrpcharts.ripple.com/#/markets/XRP/USD:rhub8VRN55s94qWKDv6jmDy1pUykJzF3wq?interval=1d&range=6m&type=candlestick (one year or max view, candlestick chart).

As with any investment, it's value can drop and be worth nothing (see Enron Scandal). Any risk averse individual should not get into crypto currencies. 

Holding the currency for a couple of years is actually considered a long term strategy. I do agree with you that some of the crypto's are short term trade strategies based on their volatility, but others with enough research can be held in the long run depending on what they are used for.

You can really use any number for short-term vs. long-term. For some 5 years may be long term, for others it is short term. I like to use 5 years because that is the minimum number of years one needs to hold on to Treasury Bills (unless you want to pay penalties). But for a day trader, 1 day could be short term.

Currently crypto currencies are legal in most of the world but the chance is there that more and more countries might make them illegal if they feel their currencies are being threatened.

All I am saying is that it is high risk and high reward.

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Couple of news notes:

From December:  http://money.cnn.com/2017/12/19/investing/bitcoin-cryptocurrencies-sec-bubble/index.html 

Today's Warning:  https://www.reuters.com/article/us-usa-sec-bitcoin/sec-warns-bitcoin-cryptocurrency-investors-at-risk-idUSKBN1ET1YI 

OPINE: The DOW price is currently based on speculative options trading and bitcoin is the only "risky thing" we are warned about?

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On 4/1/2018 at 12:54 AM, Hassan- said:

Not true, you can convert your cryptocurrency to USD anytime you want to cash out, so they are not 'worthless' as you say, they have real value to them.

Even though most crypto world is full of scam, in the long run and after the bubble crashes (and it will), the actually worthy coins that offer a significant technology will remain and will surely be of much more value than fiat.

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25 minutes ago, Bakir said:

Even though most crypto world is full of scam, in the long run and after the bubble crashes (and it will), the actually worthy coins that offer a significant technology will remain and will surely be of much more value than fiat.

You are not wrong brother.

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On 12/19/2017 at 2:21 AM, Ashvazdanghe said:

Bitcoin Shari'a:
Supreme Leader of the Grand Ayatullah Khamenei (preserves him Allah Almighty):

The Supreme Leader's Office does not comment on this issue and has not been given an oposite  or negative opinion.

In that sense, neither a decree nor a permission is permitted. Therefore, the duty of the his followers is that:

Since Bitcoin has doubts about the sanctions, entry into the deal is forbidden and should not be entered into, or they can refer to another certified Marja under a  condition, in accordance with the law of the Fa'ala'lam(the most knowledgable person) 

The Grand Ayatullah Sistani (preserves him Allah Almighty):

Supreme Marja does not allow this activity.

As a result, it is forbidden to enter into such transactions for the his followers.

The Grand Ayatullah Shabiri Zanjani (preserves him Allah Almighty):

If the credit is given against the work and is not law-abiding, it does not has religious problem.

The Great Ayatullah Makarem Shirazi (preserves him Allah Almighty):

Due to the many ambiguities Bitcoin has, dealing it has problem. 

Good to know that our Ulema have spoken up about bitcoin. One week ago an Egyptian mufti Shawqi Allam decided that bitcoin is haram. Not that I listen to him. Just saying that our Ulema said it first. 

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Near future visions of an Vita123,

Cryptocurrencies will become even more popular
and awareness will rise hugely among the masses 2018. 
Race will go to direction that there will be crypto
"Ali expresses" where you can purphace with any given Altcoin.
OPEC will change petrodollars OILCOIN markets quietly, and Venezuela 
will fight against it whith its own Petro coin. USA will win the rally. If
USA will loose then it will crash the economy of the USA as a whole and 
might cause global depression and civil wars.
There will be Altcoins to all given minerals markets and they
will be tradet trough blockhains. Crisenest countries have
most need for their own national cryptocurriencies. 

Health, IT and services will make new branches of business
as they will be combined to mobile apps to serve public 
intrest in current health trends. General public will use their 
phones to monitor their own health and pay for the apps.
Healt will be most discussed topic 2018 among the cryptocurrencies. 

Investing,

...To internet markets that can provide blockchain based coins
sales for commodities and goodies.

...To IT-companies that sell health apps.

...To new petro and oilcoins and similars with mineral markets, since they are most likely to
be near futures petrodollar and exchancge currencies,

might be most profitable.

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Hello everyone,

I was thinking about getting started on virtual currency trading and buying and selling bitcoin, ripple and ...

According to multiple posts I've seen here, multiple people have got different responses from different marjas on whether it is halal to do this or not. One post says that for example, Ayatollah Sistani says no it is prohibited, and then the next says, that he will not issue a response and then the last one says yes. Does anyone have any concrete evidence on whether it is halal or not and if it is, which platforms or specifically what ways or methods would be "halal" methods? I'd be immensely grateful if someone could help me out here and I'm asking this because I've seen apps where you buy and sell and depending on whether the price goes up and down, you gain or lose. After a bit of research, they are apparently called CFDs and you aren't actually buying a share of BTC or XRP but in a way signing a contract on whether it would go up or not. I'd be so grateful if someone could explain it to me; more importantly the religious aspect as I don't want to be doing something which is against religion obviously and if it is halal, god forbid not use a method which would make it haram.

insha'Allah someone can assist me and that I can as well as having a general method or religious guideline to follow, I also know for a fact if it is prohibited, allowed or that the Office of the specific marja for example Sistani has abstained from giving any verdict.

Thank you all in advance 

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On 01/01/2018 at 12:23 PM, .InshAllah. said:
 

Sayyid Sistani:

Question: Is it halal to buy and sell electronic currency such as bitcoin?

--

In the Name of Allah, the Beneficent, the Merciful

yes

Wassalamu Alaykum

Shaykh Fayyath:

image.png.b64d9e9d437eca06b9643de8c12590de.png

Sayid Khamenei:

 
What is the Sayids opinion on buying and selling electronic currency such as bitcoin?
Salamun `alaykum wa Rahmatullahi wa Barakatuhu
Since transaction's details are unknown, we are sorry for not being able to answer this question.
Director of the site's fiqh section
 

Sheikh Makarem:

Answer:  To trade and buy bitcoin is not permissible because of too much ambiguity. 
 

Sayyid Kamal:

النقود الالكترونية
سماحة السيد كمال الحيدري، هل يجوز شراء وبيع النقود الالكترونية كالبيتكوين؟ جزاكم الله خير
 

 

بسم الله الرحمن الرحيم

وعليكم السلام ورحمة الله وبركاته

لا إشكال في هذه المعاملة والحصول على الاموال من خلال تداول النقود الالكترونية ضمن الموازين الشرعية.

Reply from Sayid Muhammad Taqi Moderressi:

#7682 : النقود الالكترونية 
سماحة السيد المدرسي،
هل يجوز شراء وبيع النقود الالكترونية كالبيتكوين؟
جزاكم الله خير

الجواب :

بسم الله الرحمن الرحيم 
السلام عليكم ورحمة الله وبركاته
مبدئياً لا نرى فيه إشكالاً.
وفقكم الله لمراضيه
مكتب المرجع الديني آية الله العظمى المدرسي 

'In principle we see nothing wrong with it'

 

***

In summary:

Permissible: Ayatollah Moderressi, Shaykh Fayyath, Sayid Kamal, Sayid Sistani (according to najaf.org but replies from different offices seem inconsistent)

Unclear:  Sayyid Khamenei

Impermissible:  Sheikh Makarem

Edited by .InshAllah.

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On 1/3/2018 at 11:52 PM, shiaman14 said:

It would make sense if a virtual currency was backed by a commodity (oil, soya, cotton, etc.) or something with intrinsic value (gold, diamonds, etc) but in reality they are ONLY backed by their own hype.

With respect, I don't think you understand at all.

You can buy a piece of paper proving ownership of soya. You could do it online and have your ownership registered by a regulated entity. If a single entity is required to store that soya for you, then what is the point of having a decentralised cryptocurrency backed by soya (except to make the records more immutable)? When someone buys that soya from you, that single entity will still have to keep that soya in storage for that person. What a cumbersome system that would be. Imagine going to the shop to buy a penny sweet with soyacoin. Lots of soya to "back up" all the soyacoin in the world.

Question: What is soya backed by?

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On 12/22/2017 at 5:17 PM, notme said:

I'd Hopefully to those with knowledge it's a fair and just medium for exchange. 

 

I don't know if it will necessarily make the world a better place. It may even increase the unequal distribution of wealth. Especially considering that most of the people currently speculating in these tokens do not have a clue how they work. There are tokens which do nothing and are mostly owned by the creators, but people keep enriching those creators. Billionaires have been created by ill-informed speculators. E.g: http://uk.businessinsider.com/ripple-cofounder-now-one-of-the-richest-people-in-the-world-on-paper-2018-1 Let's hope the people learn how to deal with these new currencies in a sensible manner.

Governments might be better distributors of wealth than rich capitalists. With crypto, governments may have less control of wealth. 

I believe this bubble will eclipse the dotcom bubble and may lead to a big crash. However the technology is here to stay because it has utility that the world has never seen before. Whether we like it or not, cryptocurrencies will not go away. Banning them will be like trying to ban the Internet.

Edited by Muhammed Ali

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Brothers/sisters

Someone aware me if this is a decent way to make something around 100 dollars a month? 

 

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On 10/01/2018 at 8:15 PM, abbas110 said:

Nature

Soya does not have monetary value because it is backed by anything, let alone "backed by nature". I was trying to get the brother to answer that soya has intrinsic monetary value because it has utility (e.g. as food) and is limited in supply.

Do you think all artificial things should not have monetary value? Should cars be worthless? Should digital information have no monetary value?

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10 hours ago, Intellectual Resistance said:

Brothers/sisters

Someone aware me if this is a decent way to make something around 100 dollars a month? 

 

Depends on how much you invest at first. It's better to say %/month. You could have easily made up to 2-3X your initial investment in the last two months. Many of those who committed no significant errors made 10X amd even, in some cases, 100X. Basically, one zero or two zeroes more to your initial investment.

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For those struggling to see why early adopters of Bitcoin thought it was a superior form of currency, look at this chart that someone created:

Traits-of-Money.png

Some of the potential flaws of cryptocurrencies:

  • Hard to keep secure (can be stolen by hackers or lost easily).
  • The supply may not be limited if an infinite number of currencies can be created - even if each currency has a limited supply. However copper is less valuable than gold, and the same phenomenon may occur in the crypto world.
  • Can take power away from governments.
  • Difficult to scale (increase the maximum number of transactions) right now.
Edited by Muhammed Ali

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