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Cryptocurrency framework diagnostics from Islamic finance perspective: a new insight of bitcoin system transaction

This paper analyses the operation of cryptocurrency system in perspective of Islamic finance. The purpose of this study is to evaluate the cryptocurrency framework whether it is meet the Islamic Finance rule. In addition, this study performed in providing the Islamic minded investor a proper informa...

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Main Authors: Abu Bakar, Nashirah, Rosbi, Sofian, Uzaki, Kiyotaka
Format: Article
Language:English
Published: 2017
Subjects:
HG Finance
Online Access:http://repo.uum.edu.my/26298/1/IJMSB%204%201%202017%2019%2028.pdf
http://repo.uum.edu.my/26298/
http://doi.org/10.18775/ijmsba.1849-5664-5419.2014.41.1003
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spelling my.uum.repo.262982019-08-13T07:40:00Z http://repo.uum.edu.my/26298/ Cryptocurrency framework diagnostics from Islamic finance perspective: a new insight of bitcoin system transaction Abu Bakar, Nashirah Rosbi, Sofian Uzaki, Kiyotaka HG Finance This paper analyses the operation of cryptocurrency system in perspective of Islamic finance. The purpose of this study is to evaluate the cryptocurrency framework whether it is meet the Islamic Finance rule. In addition, this study performed in providing the Islamic minded investor a proper information regarding investment in Bitcoin. Cryptocurrency is a digital currency in which encryption techniques that implement to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. A transaction is a transfer of Bitcoin value that is broadcast to the network and collected into blocks. A transaction typically references previous transaction outputs as new transaction inputs and dedicates all input Bitcoin values to new outputs. This cryptocurrency has no physical form and exists only in the network. Bitcoin also has no intrinsic value in that it is not redeemable for another commodity, namely gold. Then, this study evaluates the framework according to Islamic Finance rule. The bitcoin account holder is anonymous. Therefore, it is difficult to track the real account holder if any suspicious activity occurs. In addition, the value of Bitcoin is unstable because of high volatility. Bitcoin also suffers variance in perceptions of Bitcoin’s store of value and method of value. All of these three conditions contribute to uncertainty in transaction framework of Bitcoin. As a conclusion, Bitcoin transaction is classified as a transaction with high uncertainty (gharar). 2017 Article PeerReviewed application/pdf en http://repo.uum.edu.my/26298/1/IJMSB%204%201%202017%2019%2028.pdf Abu Bakar, Nashirah and Rosbi, Sofian and Uzaki, Kiyotaka (2017) Cryptocurrency framework diagnostics from Islamic finance perspective: a new insight of bitcoin system transaction. International Journal of Management Science and Business Administration, 4 (1). pp. 19-28. ISSN 18495419 http://doi.org/10.18775/ijmsba.1849-5664-5419.2014.41.1003 doi:10.18775/ijmsba.1849-5664-5419.2014.41.1003
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HG Finance
spellingShingle HG Finance
Abu Bakar, Nashirah
Rosbi, Sofian
Uzaki, Kiyotaka
Cryptocurrency framework diagnostics from Islamic finance perspective: a new insight of bitcoin system transaction
description This paper analyses the operation of cryptocurrency system in perspective of Islamic finance. The purpose of this study is to evaluate the cryptocurrency framework whether it is meet the Islamic Finance rule. In addition, this study performed in providing the Islamic minded investor a proper information regarding investment in Bitcoin. Cryptocurrency is a digital currency in which encryption techniques that implement to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. A transaction is a transfer of Bitcoin value that is broadcast to the network and collected into blocks. A transaction typically references previous transaction outputs as new transaction inputs and dedicates all input Bitcoin values to new outputs. This cryptocurrency has no physical form and exists only in the network. Bitcoin also has no intrinsic value in that it is not redeemable for another commodity, namely gold. Then, this study evaluates the framework according to Islamic Finance rule. The bitcoin account holder is anonymous. Therefore, it is difficult to track the real account holder if any suspicious activity occurs. In addition, the value of Bitcoin is unstable because of high volatility. Bitcoin also suffers variance in perceptions of Bitcoin’s store of value and method of value. All of these three conditions contribute to uncertainty in transaction framework of Bitcoin. As a conclusion, Bitcoin transaction is classified as a transaction with high uncertainty (gharar).
format Article
author Abu Bakar, Nashirah
Rosbi, Sofian
Uzaki, Kiyotaka
author_facet Abu Bakar, Nashirah
Rosbi, Sofian
Uzaki, Kiyotaka
author_sort Abu Bakar, Nashirah
title Cryptocurrency framework diagnostics from Islamic finance perspective: a new insight of bitcoin system transaction
title_short Cryptocurrency framework diagnostics from Islamic finance perspective: a new insight of bitcoin system transaction
title_full Cryptocurrency framework diagnostics from Islamic finance perspective: a new insight of bitcoin system transaction
title_fullStr Cryptocurrency framework diagnostics from Islamic finance perspective: a new insight of bitcoin system transaction
title_full_unstemmed Cryptocurrency framework diagnostics from Islamic finance perspective: a new insight of bitcoin system transaction
title_sort cryptocurrency framework diagnostics from islamic finance perspective: a new insight of bitcoin system transaction
publishDate 2017
url http://repo.uum.edu.my/26298/1/IJMSB%204%201%202017%2019%2028.pdf
http://repo.uum.edu.my/26298/
http://doi.org/10.18775/ijmsba.1849-5664-5419.2014.41.1003
_version_ 1644284563071959040
score 13.211869

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