Islamic finance emphasizes fairness, transparency, and equitable distribution, which are often undermined by fiat finance today. The key points are:
Principles of Islamic Economics:
1. Prohibition of Riba (usury): Prohibition of interest-based loans, which increases exploitation and inequality.
2. Prohibition of Gara (Uncertainty):
Transactions should be clear and honest, no room for gambling or speculation.
3. Resource-Based Economy:
Transactions should be based on assets and actual production.
4. Risk Sharing:
Ensuring fairness through equal sharing of profits and losses.
5. Justice and Equality:
Reducing economic inequality by ensuring equitable distribution of wealth.
Problems with fiat currencies:
Fiat currency is based on interest, which creates exploitation.
Unlimited supply and inflation reduce the value of people's savings.
Control by central banks and governments creates economic injustice.
Compatibility of Islamic Principles with Bitcoin:
1. Interest Free Scheme:
Bitcoin's decentralized structure eliminates exploitation through usury.
2. Transparency:
Every transaction is recorded through the blockchain, which eliminates the lack of privacy.
3. Limited Supply:
The 21 million limit makes Bitcoin a stable asset like gold.
4. Productive Activities:
Bitcoins are created in a "proof-of-work" system, which depends on actual costs and effort.
5. Inclusive Economy:
One can participate in the economic system through Bitcoin as long as there is an internet connection.
Prospects for the Muslim World:
Price Savings:
Bitcoin is a defensive asset against inflation.
Access to Unbanked Finance:
It is possible to store and transfer assets without relying on banks.
Expatriate Income Protection:
Faster and cheaper transactions are possible, which reduces remittance costs.
Reducing dependency:
Reduces dependence on foreign currencies such as the US dollar.
Conclusion:
Bitcoin is a fair, transparent, and egalitarian financial system, consistent with Islamic economic principles. The Muslim world can move towards economic freedom, inclusion, and prosperity by adopting Bitcoin.
Source: Bitcoin Magazine
