Fatwa: # 38905
Category: Business Matters
Country: South Africa
Date: 30th September 2017


Bitcoin Mining



I have purchased some bitcoins which I heard are doubtful, please advice as to the permissibility of this? I would also appreciate some advice in dealing with this?

If this is not permissible how do I get rid of this, when getting rid of this non-permissible income do I need to create a separate bank account for the money to go in and then distribute the non-permissible income from this account and then close the account after or is it fine if it goes to my normal account and I just give away the non-permissible income from my normal account as I know the amount of income that is non permissible.

Can you also provide advice as to whether the mining of bitcoin is permissible. As I have heard that mining is permissible but trading isn’t



In the Name of Allaah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

The Darul Iftaa has been inundated with queries regarding Bitcoins and cryptocurrencies. This is a relatively new concept with many angles and dimensions to it. We also observe the reaction of China and other countries on Bitcoins. JPMorgan and other financial institutions have expressed concerns on Bitcoins which could be genuine concerns or motivated by other personal considerations.

Bitcoins and other forms of cryptocurrencies are electronic modes of currencies. It is incorrect to completely dismiss electronic modes of money as accepted modes of currency due to them not being backed by commodity.

Fiat money and fiduciary money are also not backed by commodities but are accepted modes of currencies. The possibility of electronic modes of currencies being an accepted mode of currency cannot be ruled out.

Apart from the fiqhi classification of electronic currencies, urf (accepted norm) is also an important consideration in issuing a ruling. Electronic currencies are in the infant stages. Hence, the issue of urf is also being observed for further consideration.

We have attached two charts. One on the procedure of mining Bitcoins and the other on how Bitcoin transactions take place.


Bitcoin mining is the processing of transactions on the Bitcoin network and securing them into the blockchain.  Each set of transactions that are processed is a block. The block is secured by the miners. Miners do this by creating a hash that is created from the transactions in the block. This cryptographic hash is then added to the block. The next block of transactions will look to the previous block’s hash to verify it is legitimate. Then your miner will attempt to create a new block that contains current transactions and new hash before anyone else’s miner can do so.

Miners use special softwares to solve math problems and equations and are then issued Bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine.

We advise you to suspend your investments for now.

And Allaah Ta’aala Knows Best

Muajul I. Chowdhury

Student Darul Iftaa

New York, USA

Checked and Approved by,
Mufti Ebrahim Desai.

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