The Bitcoin

In an era when the usual cash transactions were reduced to be replaced by electronic transactions and payments, the so-called digital currencies or encrypted assets Cryptocurrencies appeared, which despite the doubts that hovered around it in its beginnings - being virtual / electronic - but it was welcomed and increasingly accepted and demanded, which raised the prices of digital currencies to levels It was a standard that was impossible to imagine, and even made its way to international financial transactions, and it became the focus of curiosity and interest from everyone.

The idea of a digital or electronic alternative to the usual cash transaction began in the late eighties approximately in the Netherlands in a series of refueling stations or petrol stations on the highway in which many thefts occurred, and the administration tried to find a solution to this problem, so the administration hired a group of programmers and developers to link money to cards Especially through which drivers wishing to deal with these stations can obtain fuel from them without the need to deal with paper money in those stations, and thus there is no or at least the money will be significantly reduced from the stations in order to reduce cases of theft, after which the idea of the birth of smart money cards developed, Which used to reflect the idea of money saved in an electronic form encrypted in the card, while at the gas station there is a device to decode that code, which is the point of sales or what is known today as the idea of POS or point-of-sale. This is the first image of electronic money that has evolved to reach what it is now. In this article, we will shed light on the Bitcoin to demonstrate the concept of it and how to deal with it.

Bitcoin is one of the Cryptocurrencies that are electronic transactions and it famous among the other Cryptocurrencies nowadays.

Bitcoin was created in early 2009 by a person named Satoshi Nakamoto. In late 2008, a person named Satoshi Nakamoto released a white paper detailing the technology behind Bitcoin, thus Bitcoin was born in early 2009. The identity of this person remains a mystery to this day. There are several theories as to why this person wanted to remain anonymous:

Firstly; is for security purposes due to the amount of bitcoin he/she owns.

Secondly; the legal threat if Bitcoin were to be widely adopted would make the regulated currencies moot.

Whether or not Satoshi Nakamoto was just one person (probably several), there were a few similar currencies that were invented before the advent of Bitcoin. These transactions include:

• Hashcash was developed by Adam Buck in 1997.
• WeiD invented the B-money cryptocurrency.
• Nick Sabo has developed the Bit Gold project, a digital currency based on decentralization.
• Reusable Proof of Work by Hal Finney.

You could say Bitcoin is similar to a shiny new roller coaster that everyone wants to try and ride but ends up getting sick after doing so. Bitcoin, and investing in this cryptocurrency are known to be highly volatile, but it seems everyone still wants to trade it.

Furthermore; Bitcoin (BTC) is a decentralized digital currency that functions as a person-to-person (or peer-to-peer) payment. Although Bitcoin is not backed by any government or bank, the popularity of Bitcoin has risen due to the belief of many of its supporters that it is the currency of the future. While Bitcoin may now be a common word in everyone’s everyday vocabulary, it can be difficult to understand for some. Let me explain it to you: Bitcoin consists of a network of connected computers that store what is known as a blockchain. Where a blockchain is a set of blocks (or records scattered in blocks) and in each block a set of transactions is recorded. Since the transaction history is completely decentralized and transparent, no one can fool the system that ensures the security of Bitcoin.

Moreover; Bitcoin Keys are long strings of numbers and letters that are generated through cryptography, with the goal of preserving ownership of every Bitcoin. You will need to have both the private key and the public key of a bitcoin wallet when you own your bitcoins, and the private key should be kept secret by the owner, while the public key is used as an address to which others can send bitcoins. You will also hear the term bitcoin wallet, which is a term that refers to a digital device or digital platform that allows you to trade and track bitcoins. It should be noted that Bitcoin wallets are not insured, unlike bank accounts. While Bitcoin is promoted as being extremely secure, it is still a target for hackers around the world. Hackers or thieves may try to access digital storage accounts where the private keys are kept, and if they are successful in gaining access, they may be able to transfer bitcoins to their own accounts. This is why many choose to keep their bitcoins stored separately, and offline.

Although there are bitcoin cash nowadays, also the currency (and its transactions) are kept in a public transaction history and verified by computing power. The public transaction history provides transparent access to transactions.

Unfortunately; As Bitcoin is not backed by any banks or governments currently, but it is being exchanging for traditional currency if the investor so desires. And it has become widely accepted as a payment method. Stores only need to install their own device or wallet address through QR code and touch screen apps to accept Bitcoin payments. One of the main reasons Bitcoin is so popular with small businesses as a payment method is that there are no transaction fees, unlike credit card transactions that do. Bitcoin can be used to book a hotel stay on Expedia, shop for furniture on Overstock and even buy Xbox games with it.

In addition, many fintech companies are also adopting Bitcoin payments to their platforms. For example, PayPal recently introduced the ability to buy, sell and hold bitcoin, among other cryptocurrencies, on its platform.

And since Bitcoin is seen as a competitor to the government’s currency, many believe that legislation (or perhaps restrictions) should be passed on Bitcoin soon. Already some governments have started implementing different rules around dealing with Bitcoin. For example, the New York State Department of Financial Services has implemented a rule that, among other rules, requires companies that deal with bitcoin to register customer identities.

Additionally, there are many ways to invest in bitcoin. Because Bitcoin trades just like any other investment – so the principle of buying low and selling high on the exchange applies to it. It is traded on markets called bitcoin exchanges, which allow people to trade using different currencies. Some of the exchanges that focus on bitcoin trading include Coinbase, Binance, Rain, and Bisq. Other apps include eToro, Robinhood, Cash App, and PayPal. But before investing takes place, the investor should remember that investing in Bitcoin involves extreme price fluctuations and requires a great deal of education and risk appetite.

Nevertheless; dealing with Bitcoin has some advantages as following: It protected from losing value or inflation, it gives Self-control and sustainable maintenance, it provide security and privacy, it easy currency exchange, it is decentralization, it have low cost when making transfers and also speed of transfers.

Notwithstanding; Bitcoin has advantages, likewise dealing with it also have some disadvantages that must be taken into account before dealing with or investing in it, like: It is easy to use in illegal transactions, loss of data can mean huge financial losses, negative effects of mining on the environment, it is vulnerable to hacking, and there is no refund or cancellation policy.

In Conclusion; This electronic money differs from other cards such as calling cards, the Internet, and the like, whose stock is units of communication or balance, and not financial money through which he can buy goods and services.

The demand in many countries has begun to deal with this money because of its low cost, ease of use, and speed, as payment is made immediately without the need for any other means.

Since the stock on these cards represents monetary units, but in an electronic way, and it has gained general acceptance and confidence in it, as a medium in circulation and exchange, it is cash in the same rulings as paper money and a substitute for it, so zakat is obligatory on it, and riba (usury) takes place in it.

And Imam Malik, may Allah have mercy on him, stated in al-Mudawwanah (3/5) that anything that people accept and make it the “currency” that they deal with, it carries out riba (usury), and takes the ruling on gold and silver, and it can`t being sold for gold and silver at a deferred. Also he gave leather the rule of money if people deal with it.

Electronic money is advanced ordinary money, and although it is not similar to it in form, it agrees with it in content.

So, this electronic money takes the ruling of the currency in which it is stored, if it is a dollar then it is subject to the ruling of dollars, and if it is euro then it have the ruling of euros, and so on.

In the case of converting physical money into electronic money of the same sex, such as converting dollars into electronic units of dollars, in this case it is required that the two currencies be identical, so it is not permissible to convert 200 cash dollars into 100 electronic dollars, because they are two money of the same sex, so it is required that they be similar in amount when exchanging.

Dr. Yusuf Al-Shubaili said in “Al-Khadamaat al-istithmaariyyah fi al-Masaarif (2/556)” that: “The card takes the ruling on money stored in it, so it is not permissible to sell it for a currency of its kind except with the exchange and similarity. And it is permissible to sell it without its type on the condition that it is taken place in the same sitting, whether this sale is between the issuer and the beneficiary or between the beneficiary and a third party”.

And Allah knows best.

We ask Allah to keep us safe and sound.