Is bitcoin halal in Islam?

Unlike modern money, which is often based on debt and credit, bitcoin operates on a different principle. It is not backed by any central authority or government, but instead relies on a distributed ledger system known as the blockchain.

In the context of Islamic finance, bitcoin poses an interesting dilemma.

This blockchain technology ensures that bitcoin transactions are secure, transparent, and irreversible. Payments are verified through a consensus mechanism, ensuring that only legitimate transactions are processed.

From the Islamic perspective on money, bitcoin likely falls short of the criteria. Islamic finance emphasizes the ethical and moral aspects of financial transactions, and bitcoin's decentralized nature and lack of physical representation may not align with these principles.

However, when viewed as a payment network method, bitcoin could be deemed as permissible or 'halal'. Bitcoin transactions tend to be faster, more secure, and global, surpassing the capabilities of traditional banking systems.