Where can I mine Bitcoin in a halal way?

Bitcoin mining involves two key things:

1. You need to essentially be the auditor of the blockchain and verify that the payments being made are correct and there is no double-counting going on etc.
2. You need to participate in a race to discover the next 64-digit hexadecimal number to create the next block in the blockchain. You do this essentially through brute force computational power with the computer making millions of guesses until it strikes upon the right answer.

(1) is straightforwardly permissible.

(2) is also permissible in our view as the activity of racing with other miners with your computational power to “solve” this puzzle is intrinsically not haram. Yes there is an element of luck here, but it is mitigated by three important considerations:

1. You must be also acting as an auditor and providing a useful service. So the reward element is intrinsically tied up with doing something useful. There is also a value to the activity of engaging in mining and continuing on the blockchain. That is how bitcoin continues to flourish and function.
2. There is a clear component of calculation and computational power that is needed to engage in mining. So it isn’t as straightforward as gambling per se, or blind chance.
3. There is a predictability to mining with the difficulty of the mining kept constant so a new block is created every ten minutes and you can quite quickly mathematically assess your own chances of creating a block and getting some free bitcoins.

Click for convert bitcoin to usd

 exchange

Of the three factors, (1) is the most important in our view.

As an aside, if we were to advise on the sharia compliance of the bitcoin structure before it was created, we would encourage the mining element of the cryptocurrency to be linked to some intrinsically useful activity that does not require so much computational power in a way that is beneficial to the world and is climate-friendly too in that it doesn’t eat up unnecessary resources.

Halal Cryptocurrency Guide

Cryptocurrency, Bitcoin, Ethereum, and Ripple have now established investment products. But as these assets are so new, Muslims have a whole series of questions around them both from an Islamic perspective but also a commercial perspective.

In this detailed guide (which we will add to live) we will cover off all the big question on this topic. Each of the links below refers to a detailed article that we have done to address that question.

Where a link isn’t live yet, we’re still working on the article – bookmark this page and subscribe to our mailing list to hear about it when we go live with every new article!

Commercial & Investing Issues with Bitcoin and Cryptocurrency

We will be doing detailed articles on each of these topics, but for now we share our high level thoughts below under each heading.

1. How can I invest in blockchain?
2. – Cryptocurrencies (obviously)
3. – Stocks of companies that are investing properly in blockchain
4. How can I invest in cryptocurrencies?
5. Coinbase and Binance are the two most reputable brokers out there. And you want to use a reputable broker for this stuff.
6. How can I invest in bitcoin?
7. Coinbase and Binance are the two most reputable brokers out there. And you want to use a reputable broker for this stuff.
8. What is the halal way to invest in bitcoin and other cryptocurrencies?
9. Make sure that the cryptocurrency or token you are investing in is halal.
10. Is bitcoin a bubble?
11. We think that is incredibly hard to say right now as two competing trends are colliding: (1) there is insane bubbly ordinary-investor-piling in shenanigans going on which suggest a bubble; and (2) Bitcoin and crypto is going mainstream and it is very clear it is hear to stay and will likely form an integral part of the technological future that lies before us. (2) suggests that (1) is rational, but, well, (1) is pretty crazy right now. Long term we are bullish on bitcoin, but we do not think it should form a massive part of your overall portfolio for three reasons:
12. a. it is high risk and high reward
13. b. it is fundamentally not a very “impactful” or “useful” asset. It is not like a company or a property that actually does something productive for the world.
14. c. you should have a diversified portfolio. Not financial advice, but perhaps a 5-15% allocation of your overall portfolio is sensible.
15. Is it a good idea to invest in cryptocurrencies?
16. A small amount in crypto is not going to hurt anyone. We think its a nice additional diversification to a portfolio and hedge against the future too. If you do invest, we’d suggest investing in a basket of cryptocurrencies as right now it is unclear which the clearly dominant currency is.
17. Alternatives to bitcoin and crypto
18. Bitcoin/crypto is a high-risk high-reward investment.