Cryptocurrency? Its Halal Alternative Model

Abstract

In today’s advanced technology, Bitcoin is a form of digital currency with virtual action and a synonymous of cryptocurrency. Its idea was first discovered in 2005 while conceptually it had been developed till 2010, and the preparation for its execution took place till 2013. The actual operation of Bitcoin began in 2013 with a roaring price of $ 770 per unit. The growth of the Bitcoin is among the fastest of the financial components of the contemporary world. Despite its successful journey it is not free from any undesirable catastrophe, one may be due to regulatory weakness, inadequate operational mechanisms, malpractices and lack of market confidence. Can this digital form of currency be recognized under the Shari’ah principles? If yes, what are the risk factors in it? And how shall a catastrophe be managed? An attempt is, however, made in this research to establish a Halal alternative model of Bitcoin, its risk factors, and to analyze on how those risks may possibly be managed by Takaful system?