Is Bitcoin Cash Halal: Is BCH Halal?
In this article we do a complete shariah screening of Bitcoin Cash to determine if BCH is a halal or haram cryptocurrency. The short answer is yes, Muslims may trade and invest in BCH coin, but have a read and and see if you feel comfortable about it first.
What is Bitcoin Cash or BCH?
Bitcoin Cash is a Bitcoin hard fork committed to supporting and promoting a decentralized peer-to-peer electronic cash settlement system that reflects the fundamental values of the network. Emphasis is placed on improving throughput and high block sizes in order fundamentally to streamline other users’ transactions.
By 2017, the Bitcoin dominance level had dropped fifteenfold from 95 percent to just under 40 percent, due in large part to its vastly reduced appeal. However, even though developers, investors, users, and businesses in the Bitcoin community knew they could only move forward with the original vision, they had faith in the future of low-fee, peer-to-peer electronic cash system.
On August 1, 2017, they set the 32 MB block size limit to Bitcoin Core and began the transition to Bitcoin Cash. Anyone who held Bitcoin on that day became a holder of Bitcoin Cash (BCH). The network now supports up to 32 MB blocks with ongoing research to allow even bigger max limits in the future.
Further details on Bitcoin Cash website
Who Invests In Bitcoin Cash?
Bitmain
Galaxy Digital
Is Bitcoin Cash Halal: Is BCH Halal? We’d Love to Hear Your Thoughts
Sharing the collective wisdom of thousands of Muslim crypto traders and investors.
Bitcoin Cash Technology
Bitcoin Cash is a single source, time-invariably recorded chain ledger of unspent transaction outputs (UTXOs) stored in an append-only chain of 32MB data blocks. Miners and economic nodes maintain the blockchain by verifying, propagating, and competing with pending transactions (mempool) to be recorded in new blocks.
Network participants called “economic nodes” receive transactions and participate in blocks to validate them against network consensus rules, double-spending vectors, and propagating transactions to other economic nodes. Valid transactions are sent someone’s node pool, who will then put the transactions into the next block.
Miners stage a groundwork operation that clears mempool normally in the greatest-to-lowest fee order by deciding on transactions to include in the next block and competing with each other to make a hash that is less that the target number set by Bitcoin Cash’s difficulty algorithm.
Legitimacy Screening of Bitcoin Cash
The project was started in 2017 by a group of core Bitcoin developers. This gives us the confidence to confirm that Bitcoin Cash has an underlying fundamental value, that can be considered as “Mal” under Islamic rulings. Therefore, as a project it has legitimacy in terms of Shariah.
Is Bitcoin Cash project aligned with Islamic values?
Yes, Bitcoin Cash project does align with Islamic values as it is fork of Bitcoin and should be treated exactly the same as Bitcoin. Therefore, there is nothing against Islamic guidelines with this project.
Financial Screening of Bitcoin Cash:
Financial screening ensures that the crypto asset meets the financial criteria for Shariah compliance, if it is an equity based token. Bitcoin Cash is not backed by any equity, so there is no financial screening required on this coin/ token. Here we would typically look at things like debt to income ratio to ensure borrowing is limited to a tolerable level.
BCH Token Screening for Shariah Compliance
Token Type: Native
Token Uses: Payments
BCH is used as the native currency in the Bitcoin Cash network. BCH can be used to send and receive peer-to-peer payments and store value in its networks. With its larger block sizes (compared to Bitcoin), Bitcoin Cash offers support for a wide variety of on-chain and addressable scalability protocols.
Is Staking Bitcoin Cash BCH Halal?
Yes, staking BCH coin is Halal. The proof of work system is highly dependent on computing power by certain hardware. The reward is based on transactions made around the world by validators. This Proof of work staking method is acceptable in Islam because the reward mechanism does not contain Riba, gharar, or maisir (interest). The system requires expensive resources to thrive and has its own risks.
What Does The Muslim Crypto Community Think of BCH Coin?
Islamic Finance Guru (IFG) believes Bitcoin Cash: BCH is a halal cryptocurrency based on its method of Shariah complaince screening.
Crypto Halal Office for Monitoring and Sharia auditing on cryptocurrency markets thinks Bitcoin Cash: BCH coin is a Halal digital asset based on its Shariah complaince screening.
Marhaba DiFi‘s Shariah governance board also beleives Bitcoin Cash: BCH coin is halal.
Sharlife considers Bitcoin Cash: BCH coin as a halal cryptocurrency based on the five areas assessed for Shariah complaince screening.
If you know of other academic or scholarly views on this, please add in comments and we will update accordingly. Alternatively, you may want to join our community of Muslims crypto investors and traders, to share, learn and profit from halal digital assets.
Is Bitcoin Cash Halal: Is BCH Coin Halal?
Yes, Bitcoin Cash: BCH coin is Halal as the project was a fork from Bitcoin with the same ecosystem as Bitcoin. The purpose of the fork was to increase block size, so more transactions could be processed per block. Overall, BCH should be seen as equal to Bitcoin in terms of Shariah compliance and Muslims may invest, trade and stake BCH coin.
We hope you found this useful. Please view our Halal Crypto List to find suitable digital asset investments, without compromising your Islamic faith.
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