Bitcoin: A Second Chance For The Muslim World?
Bitcoin is the sound money that the Muslim world needs to accelerate into the future…
The Ottoman suppression of the printing press is a poster child case of intellectual stagnation in the Muslim world. Although there was no outright ban, there is no denying of a massively missed opportunity here: A civilization’s failure to adopt a groundbreaking technological change happening right next door. In its golden age, this same civilization that gave the world universities and hospitals, optics and algebra, even a precursor to the printing press itself, got so left behind in the later acceptance of technology, that its very own holy book, the Quran, waited for its first mass publication almost 300 years after Johannes Gutenberg chugged out the printed Bible.
But Islam’s Genesis Block was entirely different in character: A spirited but sundry assemblage of women and men whose most remarkable trait was their openness to new ideas. The idea of one God in a multitude of divine contenders. The idea of one bitcoin in a multitude of shitcoins … oops… sorry… mixing up my chronology! So anyway, this fraternity of early Islam, along with its keen aspiration of ushering in a just social and economic order, is also remarkable in a novel way for its time: It represents a death cross of reason’s moving average overtaking that of intuition in religious history. Bringing intellectual inquiry at par with mystical experience, it paved the way for its scions to delve into scientific skepticism, empiricism and experimental inquiry, with Robert Briffault going so far as to say that “Roger Bacon was no more than one of the apostles of Muslim science and method.”
But eventually, the music stopped, and the market corrected! There are many explanations for the downfall, most of them partially true, spanning decades and centuries, but if we want to point fingers, as human nature dictates, at some symbolic event, then it must be the Mongol destruction of the House of Wisdom, #SackOfBaghdad. In the age of manuscripts, so many books from Baghdad’s libraries were flung into the Tigris that a horse could walk across on them and the river ran black with scholars’ ink and red with the blood of martyrs.
As the Muslim Ummah lost so many intellectuals and intellectual capital in this tumultuous period, its reaction has been, (understandably), like that of an intern finding herself in control of mission critical servers, where all the senior sys admins suddenly stepped down, died or disappeared. Your best reaction is this: I’m not touching this system, and the only commands I’ll ever execute are those handed down by the four illustrious system admins — founders of the established schools of jurisprudence.
And so Islamic scholarship for hundreds of years has been in a maintenance mode. In Pakistan alone, over 12,000 Madrasa routinely teach the rules and regulations of exchanging gold and silver, centuries after its daily use has been replaced by fiat.
SURVIVAL OF CORE TENETS
But herein lies a wonderful irony. This code-freeze on innovation, which we otherwise disapprove of, did work to an extent as it was intended: It protected the core principles from being callously compromised or deliberately diluted in the hands of opportunists. Just like the extra caution and consensus in changing the U.S. constitution protected the principles of freedom and equality enshrined in it: Islamic law, too, enshrined core financial principles, that have been a thorn on the side of would-be reformers attempting to legalize fiat and modern banking in the name of Islamic Finance. The 12,000 semi-literate Madrasa students, parroting the provisions of the fair exchange of gold and silver from a 17th century syllabus citing a 9th century scholar, unwittingly become more correct than a Harvard doctorate in finance indoctrinated in the misguided larceny of fiat money! All because Muhammad ﷺ mandated sound money, just like Mises and Hayek after him, a tenet immutably crystallized in Fiqh — Islamic Jurisprudence.
A business man himself, the Prophet of Islam possessed a sharp acumen for economics and finance. In modern parlance, he quickly rose the corporate ladder to become one of the youngest CEOs of his time tasked with turning around the failing business empire of the urbane female entrepreneur, Khadija. Impressed with the Prophet’s personality, Khadija quickly proposed to him, creating a power couple that changed the course of history.
Just like Jesus turned out the money-lenders from the Second Temple, the Prophet of Islam, too, had a disdain for usury and outlawed most of the accompanying capitalist machinations, that contribute to the gross wealth disparities like 10% owning 76% of the assets. So he created some fundamental rules that constitute the bedrock of Islamic financial principles:
Forbade usury (Riba), including interest. Still respecting the time value of money, the prohibition’s intent is to create a financial regime where profit and risk is shared between the entrepreneur and the investor. From a sound money perspective, it prohibits the core operation of issuing interest bearing bonds and T-Bills against which the central bank can inflate the money supply.
Forbade uncertainty (Gharar), embodied in his famous quote, “Do not sell a fish which is still in the water.” Eliminates the possibility of fractional reserve, since outstanding debt cannot be monetized and traded further with, unless it’s paid. It also closes the tap on a myriad of derivative instruments that further inflate the money supply.
Mandated sound money. The rules of obligatory charity tax in Islam are denominated in sound money. Muslim governments take the market price of gold, convert them to fiat prices, and announce the converted value to the public to pay the religious obligation of Zakat. But from a legal standpoint, it permanently establishes gold and silver (as well as a whole class of other products) as perpetual, religiously recognized money in Islam.
These prohibitions are strong enough in Islamic theology that anyone who violates them is technically, “at war with Allah and his Prophet.” Which is why the Madrasa’s syllabus clings to “nature’s money” (Thaman-e-Khalqi): gold and silver.
But of course, big governments, Muslim or otherwise, are a chip off the same block: Self-interest reigns supreme over ethical principles. In Pakistan alone, the religious case against fiat banking has been delayed and obstructed for over 40 years in the courts. The politics of deficit financing are so attractive that no one wants to surrender this magical money making wand. Voldemorts, all of them!
In spite of these prohibitions, and in countries where religion dominates social values, Muslims still grew comfortable with paper money because it initially disguised itself as “warehouse receipts for gold” which duped the scholars into permitting it, but the jurisprudence failed to catch up with the subsequent thinning of this asset backing into its current meaningless extent.
As the domino roll of national independences took place, four different threads of activity around banking spread in Muslim countries.
First, the mainstream implementation of modern banking took root in every Muslim State, implemented in toto like its Western counterparts.
Second, Islamic banking attempted to reshape things a little. Scholars familiar with both economics and Shariah attempted to “Islamize” banking via the new academic discipline of “Islamic finance.” But instead of faithfully creating platforms for risk-sharing and equity-based financing, it just followed the Medieval Triple Contract–like approach to practically clone existing financial products, accompanied by a plethora of research papers to justify it. Like a comedic quote from the cold war era, “Communism is the longest and most painful road from capitalism to capitalism,” contemporary Islamic finance, too, turned out to become the most painful and circuitous route from traditional banking to traditional banking, decorated with Arabic names! How the professional bankers duped these scholars and hijacked this effort is excellently explained by Harris Irfan in a podcast with our own Saifedean Ammous.
Third, a large but silent majority of toothless Islamic scholars continues to exist who view all forms of banking with suspicion, but the growing chasm of knowledge gap between their education and the complexities of modern finance makes them unable to take back the narrative.
Lastly, a much smaller band of Islamic scholars exist, like followers of the Sufi order of a British convert and his Basque disciple, as well as a scholar from Trinidad, who successfully identified the fundamental problem with modern banking from a Shariah perspective: its monetary foundation. You cannot “Islamize” a bank if you do not fix the money it operates on! Hence, their attempt to resuscitate the traditional Islamic gold dinar as a sound money alternative to fiat.
GOLD DINAR: THE REAL ISLAMIC ALTERNATIVE
Fiat money and its permissibility can be viewed through an important concept in Islamic theology, the Maqasid-e-Shariah: the goals or purpose of Shariah law. To illustrate this with a controversial example, consider a Shariah law which says you cannot punish a man or woman for adultery, unless you bring four eye witnesses to the sexual act (which is normally impossible). While Islam abhors adultery, the Maqasid is an attempt by scholars to understand why, instead of having a law that easily and swiftly punishes it, there exists one that makes it practically impossible to prosecute. They rationalized that it must be to shield people’s privacy and one-off slipups from society’s nosy interference and appetite for punishment. According to Muhammad Asad, “… to make proof of adultery dependent on a voluntary, faith-inspired confession of the guilty parties themselves.” So the Maqasid points to some socially valuable goal that the law intends to achieve.
The rationale of the financial laws of Shariah are similarly explained in terms of their goals: a just distribution of wealth, a money free from devaluation, a business contract free from usurious exploitation, and a regulatory regime that increases people’s wealth and well-being. Through a very elementary intuition, it is obvious that fiat currencies violate this principle of honesty and justice in the society: Money issuers steal the purchasing power of the people and devalue their money. To put a formal Quranic stamp to this reasoning, we can take verse 3:75, “There are some among the People of the Book (Jews and Christians) who, if entrusted with a stack of gold, will readily return it.” The modern Islamic bank, if entrusted with money equivalent to a stack of gold, returns you only 90% of its worth in purchasing power, owing to inflationary erosion, thus it’s part of a system that clearly violates the Maqasid.
Islamic banks have thus thoroughly failed to espouse the core principle of risk sharing and eliminating interest (since interest exists in the very issuance process of the money they are built on). The only real Islamic alternative ever proposed was the Gold Dinar Movement. Starting in parallel (and in many respects earlier) than Islamic banking, (with the first modern Dinar minted in 1992), it was incisively accurate in its assessment and proposed remedy to the money problem: “The Return to the Gold Dinar.” This was an earlier time, when the golden tool in the fight against fiat was literally gold, which was then popularized by Austrian economics, advocated by upright leaders like Ron Paul, and adopted by grassroots activists like Bernard von NotHaus. The Muslim world saw its own spate of activism for sound money, led by its most vocal proponent, Umar Vadillo, and associated initiatives like Wakala Nusantara, Dinar First and my own Dinar Wakala. The Kelantan State government’s launch of Gold Dinar was our own El Zonte moment, full of euphoria and promise that made waves globally. The passion and courage of this vibrant lot of Warrior Sufis represented the best of modern-day Muslims: Profoundly knowledgeable people, engaged in grassroots activism, to fix the most pressing challenges of the contemporary world.
However, the primary strength of gold, its physical indestructibility, came in the way of its adoption: Logistic and regulatory hindrances prevented free flow of physical gold coins across national boundaries. In the words of its founder, Shaykh Abdalqadir, “The defense mechanisms of today’s late capitalism and its crisis management surrounding the buying, moving and minting of gold have surrounded it with prohibitive pricing and taxation.” It continues to serve as a galvanizing symbol of the fight against Riba, but making it a practical inflationary hedge, or a broader Ummah-level movement for sound money, proved an elusive goal.
Without the Gold Dinar, the horizon seemed all but bleak, except that a glimmer of hope came from the most unexpected of places: Where scholars, economists and revolutionaries had failed, nerds succeeded!
Enter Emir Satoshi!
ADVENT OF BITCOIN
For us in the Gold Dinar Movement, Bitcoiners are our brothers in arms: fighting the same enemy, securing the same goal. This is what I have always advocated to my fellow activists in the dinar movement, from as far back as 2012.
Our Prophetﷺ, as well as the Rashidun Caliphs, never debased money, nor profited from seigniorage, but gave us the right to choose our own mediums of exchange. This is fundamentally antithetical to the monstrosity of legal tender laws, which Islamic scholars have been duped into legitimizing under various pretexts (highlighting the need for increased financial literacy in this lot). This freedom to choose a currency constitutes the common ground that both us and the Bitcoiners can rally around together.
“The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust,” writes Satoshi. He recognized the problem with fiat and set out to fix it with Bitcoin, a miraculous epiphany that has let loose this growing, global band of fervid, somewhat bumptious Maximalists, as similar in essence and ethos to us, as they look different in appearance. I see Bitcoiners, not only in their pluck and guile, but also in the sly ingenuity of their weapon of choice, as nothing less than a modern-day David taking on the Goliath of traditional banking!
From a Muslim perspective, the operating verse of the Quran in critique of the Bitcoin movement becomes 49:13, “O mankind, indeed We have created you from male and female and made you peoples and tribes that you may know one another. Indeed, the most noble of you in the sight of Allah is the most righteous of you. Indeed, Allah is Knowing and Aware.” In the realm of monetary matters, the most righteous and noble are those who support sound money. It is appropriate that Allah stresses his own divine attributes in the verse, as a warning that our religiously colored conception of righteousness may not necessarily be the same as that of the knowing, the aware. (The literal term Taqwa, means something that protects you from the wrath of God.) And to the best of my belief, protecting and uplifting the poor, the downtrodden from the entrapments of a prejudiced financial system is surely a winner with the God of Abraham!
A SECOND CHANCE
We Muslims had set out to establish a just and fair society, and for some time, to quote David Graeber, succeeded: “Once freed from its ancient scourges of debt and slavery, the local bazaar had become, for most, not a place of moral danger, but the very opposite: the highest expression of the human freedom and communal solidarity, and thus to be protected assiduously from state intrusion.” But gradually, as our political and intellectual leadership in the world waned, we now find ourselves economically bankrupt, submerged in a rigged financial system, and enslaved to the dictates of the International Monetary Fund (IMF).
A major reason for this impoverishment was the widening gap of modern knowledge. The following vicious cycle of three circularly dependent factors is another way of modeling our current reality:
Low capital allocation for education. A generally weak economy leaves little allocation for investment in education of both scientific and humanities disciplines, which is required for a productive human capital.
Low human capital. The first factor results in low quality of education in the populace then manifests politically in bad national decisions, engagement in conflicts, economic mismanagement, acquisition of debt and failure to curb corruption. Economically, this unskilled workforce has low productivity, scarce entrepreneurship and ineffective technology adoption. Religiously, it permits violence and extremism to breed along sectarian fault lines.
Low economic output. The second factor results in continued economic tribulations, since the whole society is now in KTLO mode, instead of “adding new features.” Which leads us again to item one.
It is the standard cycle of poverty played out at a macro scale, which many competing power bases believe they can break. The military, the Mullahs, and the Liberals, far away, even the CIA has prescriptions on how to solve our problems. But such temporary political and economic interventions bear no lasting results, since nations are built by worthy men and women, over a span of many years, who, given a free and peaceful environment, fall back on their innate drive for excellence to create a better world.
It is the job of the revolutionary and his meteoric jolt, or at a smaller scale, your social entrepreneur giving a small push, that breaks a segment of society free from this vicious cycle: A closed ecosystem of wealth circulation, comprising of learned individuals, equipped with better technology and empowered with more capital, shielded from outside influence, and stabilized by a fair social contract, to launch the virtuous symbiosis of economic prosperity and human development which prop each other to newer heights.
This break can start in many ways: a national independence, some strong leadership, or in case of Islam, the founding of a new religion. Islam’s own trajectory gives us a generalized three-stage pattern on which any revolution can be modeled, an excellent blueprint for our bitcoin adoption.
Education: A new world view is conceived, and people are educated toward it for voluntarily placing their faith on it — Iman.
Separation: The model is physically deployed, separated from existing systems, so it can grow and thrive without any negative external influences — Hijra.
Protection: When the model grows strong enough to threaten the status quo, but still weak enough to be fully destructible, it needs protection, usually requiring armed conflict — Jihad.
We in the Gold Dinar Movement believed that the break in this vicious cycle will come from financial empowerment: When Muslim people and governments adopt sound money, free from the shackles of the IMF, it will allow our bankrupt economies to manage enough disposable income that can be invested in other avenues in society, putting us on a path to progress and human development. Gold would bring back the Golden Age, producing men and women who are worth their weight in gold!
But it could not. Let me explain why, and how bitcoin makes it possible.
BITCOIN: A TOOL FOR REVOLUTION
Following our three-stage model of a revolution, let’s review how bitcoin resolves the challenges of each step.
The common man, humble about his knowledge of finance, expects, like John Galbraith remarked, a “deeper mystery to the process of money creation.” But which really is so simple, he goes on, that “the mind is repelled.”
But the chasm in traditional and modern education keeps our scholars from being able to religiously evaluate the fiat system, for which they need three vital credentials: a traditional Mufti qualification, specialized research in the Fiqh of Muamalat, and a study of modern economics. Only a handful achieve this, like the globally revered Usmani, who become thought leaders in Islamic finance: The rest take the easy way out and follow what they posit. I once asked a certified Shariah advisor on LinkedIn, if he knew what fractional reserve banking meant. I expected some abstruse, rule-bending justification for it but was taken aback by his honest admission that he simply didn’t know what it was!
So the first challenge was to educate both the people and the scholars about the fiat system. Then to enlist serious academic and industry practitioners to devise a working alternative based on gold and silver. Then to have its demand trickle down into the masses to eventually morph into enough political pressure for the government to adopt it, much to its own detriment. Highly unlikely.
Except that with bitcoin, educating the people now becomes much more focused and result oriented. The wider goal of educating people about finance and economics remains indispensable in both gold and Bitcoin-based sound money solutions. But with bitcoin, we don’t have to wait for a third-world academia and archaic-minded scholars to sell the solution to an unwilling government: We take the narrative, and the prerogative of action, back from them. We go tactical, orange pill the masses with an Urdu translation of the bitcoin standard, and focus on what is minimally essential to achieve within our means: Teaching Muggles… sorry…. No-coiners, the very basics of money mechanics, the role of bitcoin in our strategic response, and the know-how to stack satoshis in a cold wallet! The rest will follow!
Coming to think of it, my initial printing press analogy is poignantly relevant. The press encapsulated years of knowledge in a simple package easily disseminated to thousands, which could have overcome our knowledge gap had we adopted it earlier. Bitcoin, too, encapsulates the quintessential wisdom of centuries of humanity’s experience in what constitutes good money and allows it to be spread easily across the world. It is both knowledge, and a tool crafted out of that knowledge. If we miss the boat on it, we will not only lose to “usury capitalism,” but the Bitcoin movement, too, will be deprived of huge potential support from a quarter of the world population. We must join the rest of humanity in a last ditch attempt at wealth equality.
After educating people about money mechanics and bitcoin, the second step is the Hejira, our separation from the existing system.
An Islamic scholar, Abdassamad Clarke defined “usury capital,” as “the use of capital that is both generated by usury and operated according to usurious principles, which permits a tiny clique of individuals, by the principle of fiat money amplified by leverage, to wield extraordinary power and accumulate unheard of wealth in such a manner as to subject the rest of humanity as menial servants in their project of self-enrichment, whether in the tyrannies of the East or the so-called free-market capitalism of the West.”
The fundamental philosophical difference between Islamic and Western economics is how we view interest. Islam holds firm to the classical Judeo-Christian prohibition, believing that the time value of money is more fairly accounted for in equity finance style risk sharing of the invested capital, instead of a guaranteed return favoring the capitalist. Among other things, its side effect is prohibiting both the monetizing of our “future income” to issue fiat, and prohibiting the money-multiplier effect of fractional reserve, through the rulings of Riba, Bai-al-Dain and Bai-al-Madum.
Bitcoiners and libertarians rely on an entirely different philosophical foundation to reach partially the same conclusion in regards to fiat, that it’s perverse, unjust and socially destructive.
The end goal for both is the same: To separate ourselves from the fiat system and carve out an entirely new, independent financial system: The original idea of decentralized finance (DeFi)!
Unfortunately, the bubble effect we so dislike in TradFi — traditional finance — is now itself widespread in the non-Bitcoin crypto world, what Ellen Farrington cites as the immense amount of “rehypothecation, leverage, and securitization,” which if misused can cause systemic risks that affect everyone. The practical reality of contemporary DeFi in the non-Bitcoin world is quite far from its theoretical goal. Looking at this aspect of “crypto,” some Islamic scholars took the liberty of invoking the gambling prohibition clause, something whose motivation we can sympathize with, even though we disagree with the conclusion.
A lack of regulation at the administrative level cannot be countered by religious pronunciation of Haram status. It’s kind of like declaring cars as Islamically forbidden, merely because some people are driving them too fast and killing others. But presently, we are far less interested in how scholars view “crypto” than we are regarding bitcoin. The DeFi world’s shiny new investments offering unsustainable returns, its shady ICOs and the casino-like frenzy and get-rich-quick dreams of novice retail investors are far removed from what we advocate, from what we are daring to call a second chance for the Muslim world: A Bitcoin-based sound money adoption as a medium of exchange and store of value!
But what is nevertheless commendable in the crypto world (led, of course, by Bitcoin) is the attempt to create this entirely new, independent miniverse of alternative, decentralized finance, isolated from the existing system. Building and expanding this decentralization, based on Bitcoin, is the essence of the second step of our revolutionary blueprint: the Hejira. Migrating from the old to the new. As Iqbal would have said, “Blow away this transitory world, and build a new one from its ashes” — khakastar se aap apna jahan paida karay.
The only serious prior attempt for sound money among Muslims was the Dinar movement. But it only works in a physical jurisdiction: Where to mint, where to store, how to transport, how to coordinate electronic payments, how to deal with banking regulations, taxes and government interference? Theoretically, it was possible to instantiate an entirely independent ecosystem of issuance, storage, transport and trade using gold, but real progress on it was very slow.
At the same time, the Bitcoin ecosystem has matured so much to be classifiable as an independent and isolated system, free from all interference from legacy finance. The Core Bitcoin Timechain, Lightning and Layer 2 smart contract solutions, and the globally distributed miner, node operator and supporter community, all combine to form a platform on which we can build and experiment with truly Islamic financial contracts of the form that are not possible with TradFi.
In this ecosystem, we can resuscitate Islamic social and financial institutions like the Bait-ul-Maal, the Suq, the Waqf, the Guilds, the Hawala, the Wahdiya, the Qirad and the Musharaka, free from the restrictions of any government, securities commission or central bank.
And once this isolated system is deployed, we need to protect it.
A story is told in Islamic lore, that when Abu Dharr Ghifari came looking to meet the Prophet, Ali told him to walk a few paces behind him, and if he senses anyone suspicious he will stoop down to tie his shoelaces and Abu Dharr should continue walking ahead. Kind of like a coinjoin to obfuscate where he was actually going. When you are small, you must remain in stealth mode and operate under the radar. Later on, when the small state of early Islam was established in a nearby city, it needed a number of armed conflicts to defend itself from being nipped in the bud!
Deploying a sound money system, too, may need a precarious window in which the sapling would need fierce protection before it grows into a tree. The hellacious powers issuing the yuans and dollars of the world are way too formidable for any third-world nation state to get away with a head-on collision. In fact, we cannot even withstand assaults from individual speculators, let alone a concerted effort by the global financial cabal to preserve its status quo. El Salvador and the like are definitely interesting trailblazers to watch out for here, but it is too early to tell.
If a sufficient number of first-world citizens band together to defy their government in adoption of sound money, the response of fiat-powered regimes would (probably) be much more restrained in handling them versus some rogue state from a third-world country attempting to defy the dominant currency. I was told by a prominent Islamic banker that when Mahatir toyed with the idea, he was sent a very stern signal to “cease and desist” by the powers that be!
So, can a Muslim government adopt and get away with either the dinar or bitcoin? I believe only in the latter. Only bitcoin has the necessary technological edge in terms of its unstoppability and indestructibility that can substitute for the need of a national military power strong enough to protect a traditional sound money built on gold.
THE ISLAMIC STATE VERSUS BITCOIN
But many Islamic revivalists believe otherwise and their goal is usually larger in scope than financial reform alone. It is a more holistic quest to resuscitate the political, social and legal structures of precolonial Islamic governments. Encouraged by the spectacular rise of early Islam that dared challenge superior powers like Byzantine and Sassanids, they believe it possible to recreate the traditional theocracy along similar lines, one of whose side effects would be to eradicate fiat currency also. Such ambitious projects downplay the urgency of fixing our financial system: No need to separately struggle for it if it comes as a natural corollary to the larger political renaissance.
Now the specter of such pan-Islamic revival has been thoroughly demonized in Western imagination, owing from our own side to violent extremism, owing from their side to a deep-rooted Islamophobia, and owing generally to ideas (or realities?) like the clash of civilizations. But my Bitcoiner friends — whose libertarian ethos is so refined to even self-censure the slightist hint of authoritarian enforcement in El Salvador’s legal tender adoption of bitcoin — will surely agree that it is entirely within the rights of the Muslim world to voluntarily experiment, on their land, with whatever form of government they fancy: caliphates, sultanates or kingdoms!
But the reality of this dream in the minds of the majority of modern Muslims is quite different from what the world perceives. The moderate Muslim just wants Islamic principles to be the guiding source of their political and social order. But the strength of this desire is often encashed by opportunists, resulting in two recent distorted models of political Islam:
1.The Iranian model: Somewhat broad-based and sustainable but toothless and symbolic. They are the political twins of Islamic banks, offering no real change to the common man, except moral policing. Financially, there even exists the oxymoronic Central Bank of the Islamic Republic. Why would you have an Islamic bank if you were truly an Islamic republic?
2. Second, is the Taliban and ISIS model: Narrow-based, extremist and unsustainable, divorced from the comity of nations. ISIS did reportedly issue the Gold Dinar but to no one’s avail, except perhaps as a recruitment propaganda. News out of Kabul promises a more restrained and balanced government this time around, but is it a genuine change of heart or just political expediency?
So, while the Muslim world waits for a true Islamic reformation, and the world holds its breath on how the next such attempt turns out, my issue with this ubiquitous political quest in the Muslim imagination is just NGMI — it’s not gonna make it! We can’t stall the effort of immediate financial reform on some future promise of a bigger change happening to facilitate it. As an Urdu saying goes, na nau munn tayl hoe ga, na Radha naachay gi: Neither shall the king be able to provision nine gallons of lamp oil, and nor will the stage ever be lit enough for his dancing girl, Radha, to perform!
Nevertheless, assuming for a moment that a mature, viable, modern Islamic government does get established by some geopolitical miracle, faithful to Islam’s core tenets, and broad-based in popular support, the next and more pertinent question becomes: Will it have sufficient political, and if necessary, military power, to deploy a gold-based sound monetary system in their country, and then get away with the sanctions and isolation that follow?
And this is where bitcoin, once again, outshines other alternatives. The one trait that sets it apart from all “crypto”, and indeed, all monies in human history: true, sovereign-grade censorship resistance, from both your own government and foreign powers. Without needing any battalions or bombs, bitcoin enables us to fight the good fight ourselves and win. And if the broader Islamic reformation materializes, bitcoin can support it, too, for bypassing potential sanctions and increasing national wealth!
God has a knack for defeating evil by the simplest of designs — the mighty Goliath with a slingshot, the persecutors of the Prophet with a humble spider — as if to compound the humiliation of defeat by the plainness of its bearer. Who could have thought that the Kremlins, Zhongnanhais and White Houses of the world would be made helpless by the confluence of two elementary ideas: proof of work and difficulty adjustment! But this simple, easily overlooked and less understood killer combination of traits makes bitcoin an undefeatable tool in the hands of us, the 99%. We do not need to wait for anyone. We can do it ourselves with bitcoin.
THE WAY FORWARD
While the wallet addresses, exchange accounts, market cap, and of course, the hype around crypto is constantly rising in Muslim countries, much of this activity is from the perspective of a shiny new investment vehicle, a get-rich-quick bandwagon to which everyone wants to hitch! This has engendered the animated debate of investor protection, scam avoidance and the whole academic deliberation of whether they are at all Halal owing to a perceived lack of intrinsic value and being free from government control. While all of these objections on bitcoin from the Shariah perspective have been thoroughly refuted by various scholars and are easily searchable on the internet, the continuance of this superfluous debate is dangerously distracting: In the process, we are losing sight of the higher frequencies of this amazing once-in-a-lifetime phenomenon.
Aye ahle-e-nazar zauq-e-nazar khoob hai laikin
Joe shay ki haqeeqat koe na dekhay woe nazar kiya
We need bitcoin, not because it’s a great investment (which incidentally it is), but because it’s a great store of value and a medium of exchange: A free medium of exchange, which can uplift us collectively if we just adopt it, en masse, as our money.
To my fellow Muslims, here is a parting thought.
We love and honor our Prophet to such an extent that even the minutest of his actions, Sunnahs, is recorded, revered and repeated, even if it be as simple as the table manners of cutting some fruit. But here is another Sunnah of bigger import: success.
The change that he set out to achieve in the world, he did achieve it. As he breathed his last in the arms of Ayesha, he had already delivered on the promise he had made to his companions in the lowest ebb of their persecution: “… a traveler from Sana to Hadrarmaut will fear none but Allah.”
Although bordering a little on logical fallacy, I would point out that he didn’t cite something more symbolic like the establishment of the Caliphate, or the conquests, or the subsequent power. He chose to cite, as evidence of success to what they were suffering for, the establishment of a certain social order: One in which an anonymous citizen would not fear physical or financial insecurity. I say anonymous, not a private citizen, because the choice of the word “traveler” is very telling. While you are known in your city, protected by your identity, and potential clout from a corporation or clan, it is suddenly removed when you are in a strange land. They do not even know your name, unless you tell them: You are just a wallet address. But this traveler is not afraid of loss of wealth, or being robbed, or not having the right passport, or the right vaccine passport! He can move himself, and he can move his money.
We Dinarists and Bitcoiners always equate inflation with theft. Whether you snatch 50 rupees from a poor man, or the free fall of your currency leaves him with 50 rupees less of a purchasing power, it is the same. While every ill is not caused by our monetary system, there is the obvious administrative incompetence and a dismal economic performance to account for — but inflation is definitely a huge factor. And all our high talk, slogans, research papers, reform movements, activism and militarism have deviated from this one Sunnah: The success of delivering safety to this traveler again.
Bitcoin can help us succeed. Like now! Not 20 years later. Not when some promised leader will part the seas for us again. But now, when the poor illiterate, helpless man on the street looks at us educated and privileged elites and asks: What did you do to level the playing field for me? The Islamic banker may say, “Oh, I developed this intricate Shariah compliant profit and loss sharing contract for you, approved by the council of scholars, and backed by the gold dinar, just wait for it to be deployed.” I will say, “Dude, here, let me help you buy a few satoshis and get you a Lightning wallet so you don’t have to revert back to the rupee when paying for your next meal!” I think you should do the same.
Bitcoin deserves a fresh look from us Muslims. Let’s think about it. Let’s use it correctly. Let’s spread it. Let’s understand it. Let’s use Bitcoin.
Sat, 10/30/2021 – 19:30