Oddbean new post about | logout

Notes by Mutual Consent | export

 Been trying to explain to my muslim father in-law that fiat money is riba, while Bitcoin is Halal... 
 Many of the claims made about bitcoin are aspirational and idealistic. One of the surest things is that fiat is a tool for control and subjugation through financial trickery. It remains to be seen how bitcoin can be used towards those same ends. 

For one, it is not a functional medium of exchange, because the user experience is poor, it is not widely accepted for trade, it cannot be used where internet is not available, and it cannot support transaction levels that other payment methods can.

It is billed as a store of value, and compared to collapsing currencies that may seem true, but it has no intrinsic value whatsoever, and it does not represent any real world human necessity. If you research the Dinar and Dirham, it's clear they had specific weights tied to food staples. Long term I don't know what value it is actually storing or representing that is tied to human survival?

At present it is a highly speculative investment vehicle that can be easily surveilled and censored through wallet address banning, transparent transaction histories could be used against people in future, failure to secure your wallet and seed can lead to losing all your wealth, it can't be used as a medium of exchange in day to day life and that won't change quickly, and you cannot access it without access to the internet, which you can't assume you'll always have if you don't comply with future rules and regulations.

Muslims would do well to stick to the tried and tested Sunnah money established in the first three generations. Reviving this, and decentralised market places modelled on those that were in Medina, with strict rules on trade, will bring more lasting prosperity and allow for a parallel system to function outside of technocratic control. Dinar and Dirham are the only forms of exchange that we can say with certainty are halal, so that's where we should pivot as an ummah. 

Bitcoin could be used to get rich, but don't assume this trend will continue, and that you'll be allowed to stay rich.