Is Zcash Halal: Is ZEC Coin Halal?

is zec coin halal

In this article we do a complete Shariah screening of Zcash to determine if ZEC coin is a halal or haram cryptocurrency. The short answer is yes, Muslims may trade and invest in ZEC, but have a read and see if you are comfortable with our assessment first and of course let us know if you have a different view.

 

What is Zcash?

Zcash is a private cryptocurrency that offers anonymous, value-based transfers based on zero knowledge cryptography. There exist parameters for clients to decide on which transaction privacy they are choosing. Zcash’s protocol selects a certain number of block rewards known as the “Founder Bonus” to encourage analytic information of the development of its protocols in Switzerland.

 

Started operation in 2013, Zcash was initially advised as being a privacy-based extension to Bitcoin based on developers’ application of “zero-knowledge proofs,” an advanced mathematical technology. Although Zerocoin’s revolutionary nature was positively assessed, Bitcoin’s core developers determined it impractical to include Zerocoin into the Bitcoin platform.

 

After raising $3 million through two crowdfunding campaigns, the Zcash protocol began development under the Zcash Company, which aimed to develop the Zcash protocol into a full-fledged cryptocurrency. In 2017, the separate entity, the Zcash Foundation, was incorporated as a 501(c)3 charitable nonprofit organization.

 

Further details on Zcash website

 

 

Who Invests In Zcash?

 

BagHolder Capital

Block Ventures

Boost VC

CypherMines

Digital Currency Group

Electric Capital

Evolve VC

Fenbushi Capital

Galaxy Digital

HyperChain Capital

INBlockchain

Inflection

Kenetic Capital

London Trust Media

LuneX Ventures

M31 Capital

Maple Ventures

Pantera Capital

Placeholder VC

Winklevoss Capital Management, LLC

Is Zcash Halal: Is ZEC Coin Halal? We’d Love to Hear Your Thoughts

Sharing the collective wisdom of thousands of Muslim crypto traders and investors.

Zcash Technology

The Zcash protocol, is a network of mining and economic nodes that maintain time-stamped blockchain records of all unspent transactions output (UTXO). After validating and propagating transactions (the mempool) on the network, miners compete to add their newest blocks to the append-only chain of 2 MB blocks.

 

When a transaction reaches a economic node (full node), the economic node verifies the transaction against other network rules and double-spend vectors and propagates it to other economic nodes that also verify and propagate the transaction. The economic node then sends the valid transaction to the mempool network waiting for mining nodes to confirm it to the next block.

 

To discover whether or not a transaction is valid in Zcash, the function determining the validity of a transaction took into consideration whatever the owner of the system is responsible for establishing the network’s consensus rules. By taking this into consideration, it introduced signatures on the transaction using zk-SNARKs (zero-knowledge succinct non-interactive arguments of knowledge).

 

A zk-SNARK is a number that can prove one possesses certain secret information without producing or conveying any details about the data.

 

 

Legitimacy Screening of Zcash

Zcash was created in 2013 and originally known as “zerocash”, was developed from the realization that Bitcoin lacked a high level of privacy. The Zcash platform is based on the idea of zero-knowledge proofs, which validate transaction data without revealing identifying information.

This gives us the confidence to confirm that Zcash 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 Zcash project aligned with Islamic values?

Yes, Zcash project does align with Islamic values. The main aim of this project is to provide liquidity to the market by using a swap mechanism as described earlier and ool funds together. There is nothing anti Islamic about such a technology. 

 

Financial Screening of Zcash:

Financial screening ensures that the crypto asset meets the financial criteria for Shariah compliance, if it is an equity based token. Zcash 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.

 

ZEC Token Screening for Shariah Compliance

Token Type: Native

Token Uses: Payments

ZEC is the native currency within the Zcash network and its transactions can either be transparent or shielded.

Transparent transactions perform similar to Bitcoin with transparent addresses and transaction amounts, whereas shielded transactions function with hidden addresses and transaction amounts. Parties relying on shielded transactions are able to selectively disclose transaction metadata for the purposes of reporting, audit, or regulation.

This token has a utility that is permissable under Shariah so Zcash: ZEC token is considered halal.

 

 

 

Is Staking Zcash Halal?       

There is no mining or staking in this system so we can move on to the academic and scholarly opinions

 

 

What Does The Muslim Crypto Community Think of Zcash?           

Marhaba DiFi‘s Shariah governance board also beleives Zcash: ZEC is halal.  

Sharlife considers Zcash: ZEC as a halal cryptocurrency based on the five areas assessed for Shariah complaince screening. 

Crypto Halal Office for Monitoring and Sharia auditing on cryptocurrency markets thinks Zcash: ZEC coin is a Halal digital asset based on its Shariah complaince screening.

Islamic Finance Guru (IFG) believes Zcash: ZEC is a halal cryptocurrency based on its method of 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 Zcash Halal: Is ZEC Crypto Coin Halal?

Yes, Zcash: ZEC crypto coin is Halal as its platform is based on the idea of zero-knowledge proofs, which validate transaction data without revealing identifying information. This is not against Shariah guidelines so Muslims may invest, trade and stake ZEC crypto 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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