Is Filecoin Halal: Is FIL Coin Halal?
In this article we do a complete shariah screening of Filecoin cryptocurrency to see if FIL coin is halal or haram. From investing, trading to staking, we’ve got your halal crypto investments covered.
What is Filecoin: FIL Coin?
Filecoin is an open source protocol that allows users to sell excess storage space on an IPFS-based open-source network. It’s the incentive and security structure for IPFS (InterPlanetary File System), a peer-to-peer network for file storage. Filecoin IPFS turns the storage system into an “algorithmic market,” where users pay storage contributors.
Filecoin uses a peer-to-peer file transfer system to provide an alternative to existing cloud storage and file management protocols. Its technology acts as an incentive layer against IPFS (InterPlanetary File System).
In 2017, the developers of Filecoin hosted a token sale to raise funds for their growth, which raised around $205 million, one of the largest ICOs at the time.
Further details on Filecoin website
Who Invests In Filecoin?
Digital Currency Group
Union Square Ventures
Winklevoss Capital Management, LLC
Is Filecoin Halal: Is FIL Coin Halal? We’d Love to Hear Your Thoughts
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Filecoin utilizes proof-of-work techniques that verify a miner’s intent on storing data for a predetermined number of minutes and replication. Instead of generating a random hash for a given value, the networks proof of work addresses the question of whether a miner had energy storage for a certain time.
Legitimacy Screening of FIL
Filecoin is like the blockchain version of Dropbox. It has attracted a number of serious investors and managed to raise over $205M in its ICO, in 2017, which was one of the biggest at the time. The team has a legitimate product, built using blockchain technology and has public roadmap showing its development plans.
This gives us the confidence to confirm that Filecoin 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 Filecoin project aligned with Islamic values?
Yes, Filecoin: FIL project does align with Islamic values as Protocol Labs is aiming to build a fundamental layer for data infrastructure that can be adapted to use by blockchain and traditional IT providers alike, including Amazon Web Services (AWS) and Microsoft Azure. This is permissable in Islamic rulings.
Financial Screening of FIL:
Financial screening ensures that the crypto asset meets the financial criteria for Shariah compliance, if it is an equity based token. Filecoin 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.
FIL Token Screening for Shariah Compliance
Token holders can use Filecoin’s protocol to participate and transact in the network. In particular, users pay Filecoin miners in tokens to store or distribute data on Filecoin’s hosted servers and to retrieve their information. Storage providers also offer Filecoin as collateral to guarantee a minimum level of service, which will get lowered in the event of a deal’s failure.
Based on this the token is permissable so Filecoin: FIL token is considered halal.
Is Staking FIL Coin Halal?
At the time of assessment there is no staking Filecoin: FIL so this is a pass for the time being.
What Does The Muslim Crypto Community Think of FIL?
Crypto Halal Office for Monitoring and Sharia auditing on cryptocurrency markets thinks Filecoin: FIL is a Halal digital asset based on its Shariah complaince screening.
Marhaba DiFi‘s Shariah governance board also beleives Filecoin: FIL coin is halal.
Sharlife considers Filecoin: FIL 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 Filecoin Halal: Is FIL Coin Halal?
Yes, Filecoin: FIL is Halal as it allows users to store their documents on a competitive platform and verify that everything is working correctly. The network’s purpose is to provide blockchain-based cloud storage. The way they operate, mining, and all features on this network are all compliant with Shariah guidelines so Muslims can trade and invest in this coin.
We hope you found this useful. Please view our Halal Crypto List to find suitable digital asset investments, without compromising your Islamic faith.