@ ابو مريم

*This paper was originaly writen in early November 2024 as a proposal for an international Muslim entrepreneurial initiative. It was first publish on NOSTR 27 November 2024 as part 1 of a 4 part series of essays. Last updated/revised: 30 March 2025.* The lament of the Ummah for the past century has been the downfall of the Khalifate. With the genocide in occupied Palestine over the past year and now escalations in Lebanon as well, this concern is at the forefront of a Muslim’s mind. In our tradition, when one part of the Ummah suffers, all believers are affected and share in that suffering. The Ummah today has minimal sovereignty at best. It lacks a Khalifate. It is spiritually weakened due to those not practicing and fulfilling their duties and responsibilities. And, as we will address in this paper, it has no real economic power. In our current monetary system, it is nearly impossible to avoid the malevolence of *riba* (interest) – one of the worst sins. However, with bitcoin there is an opportunity to alleviate this collective suffering and reclaim economic sovereignty. Since it’s invention 15 years ago, bitcoin has risen to achieve a top 10 market cap ranking as a global asset (currently valued at $1.8 trillion USD). Institutional investors are moving full swing to embrace bitcoin in their portfolios. Recent proposals in Kazan hint that BRICS may even be utilizing bitcoin as part of their new payments system. State actors will be joining soon. With only about 1 million bitcoins left to be mined we need to aim to get as much of those remaining coins as possible into the wallets of Muslims over the next decade. Now is the time to onboard the Ummah. This paper presents Bitcoin as the best option for future economic sovereignty of the Ummah and proposes steps needed to generate a collective *waqf* of an initial 0.1%-0.5% chain dominance to safeguard a revived Khalifate. Money is the protocol that facilitates economic coordination to help the development and advancement of civilization. Throughout history money has existed as cattle, seashells, salt, beads, stones, precious metals. Money develops naturally and spontaneously; it is not the invention of the state (although it at times is legislated by states). Money exists marginally, not by fiat. During the past few millenniums, gold and silver were optimally used by most advanced civilizations due to strong properties such as divisibility, durability, fungibility, portability, scarcity, and verifiability. Paper money modernized usability through attempts to enhance portability, divisibility, and verifiability. However, all these monetary properties are digitized today. And with the increase of fractional-reserve banking over the past two centuries, *riba* is now the *de facto* foundation of the consensus reserve currency – the USD. This reserve currency itself is backed by the central banking organ of the treasury bond markets which are essentially government issued debt. Treasurey bonds opperate by manipulating the money supply arbitrarily with the purpose of targeting a set interest rate – injecting or liquidating money into the supply by fiat to control intrest yeilds. At its root, the current global monetary order depends entirely on *riba* to work. One need not list the terrible results of *riba* as Muslims know well its harshness. As Lyn Alden wonderful states in her book, Broken Money, “Everything is a claim of a claim of a claim, reliant on perpetual motion and continual growth to not collapse”. Eventual collapse is inevitable, and Muslims need to be aware and prepared for this reality. The status quo among Muslims has been to search for “*shariah* compliance”. However, *fatwa* regarding compliance as well as the current Islamic Banking scene still operate under the same fiat protocol which make them involved in the creation of money through *riba*. Obfuscation of this *riba* through *contractum trinius* or "*shariah* compliant" yields (which are benchmarked to interest rates) is simply an attempt to replicate conventional banking, just with a “*halal*” label. Fortunately, with the advent of the digital age we now have other monetary options available. Experiments and theories with digital money date back to the 1980s. In the 1990s we saw the dot com era with the coming online of the current fiat system, and in 2008 [Satoshi Nakamoto released Bitcoin](https://bitcoin.org/bitcoin.pdf) to the world. We have been in the crypto era ever since. Without diving into the technical aspects of Bitcoin, it is simply a P2P e-cash that is cryptographically stored in digital wallets and secured via a decentralized blockchain ledger. For Muslims, it is essential to grasp that Bitcoin is a new type of money (not just an investment vehicle or payment application) that possesses “anti-*riba*” properties. Bitcoin has a fixed supply cap of 21 million, meaning there will only ever be 21 million Bitcoin (BTC). Anyone with a cheap laptop or computer with an internet connection can participate on the Bitcoin network to verify this supply cap. This may seem like an inadequate supply for global adoption, but each bitcoin is highly divisible into smaller units (1 btc = 100,000,000 satoshis or sats). Bitcoins are created (or mined) from the processing of transactions on the blockchain which involves expending energy in the real world (via CPU power) and providing proof that this work was done. In contrast, with the *riba*-based fiat system, central banks need to issue debt instruments, either in the form of buying treasuries or through issuing a bond. Individual banks are supposed to be irresponsibly leveraged and are rewarded for making risky loans. With Bitcoin, there is a hard cap of 21 million, and there is no central authority that can change numbers on a database to create more money or manipulate interest rates. Under a Bitcoin standard, money is verifiably stored on a ledger and is not loaned to create more money with interest. Absolute scarcity drives saving rather than spending, but with increasing purchasing power from the exponentially increasing demand also comes the desire to use that power and increased monetary economization. With bitcoin you are your own bank, and bitcoin becomes for your enemies as much as it is for your friends. Bitcoin ultimately provides a clean foundation for a stable money that can be used by muslims and should be the currency for a future Khalifate. The 2024 American presidential election has perhaps shown more clearly than ever the lack of politcal power that American Muslims have as well as the dire need for them to attain political influence. Political power comes largely through economic sovereignty, military might, and media distribution. Just a quick gloss of Muslim countries and Turkey & Egypt seem to have decent militaries but failing economies. GCC states have good economies but weak militaries. Iran uniquely has survived sanctions for decades and despite this weakened economic status has still been able to make military gains. Although any success from its path is yet to be seen it is important to note that Iran is the only country that has been able to put up any clear resistance to western powers. This is just a noteworthy observation and as this paper is limited to economic issues, full analysis of media and miliary issues must be left for other writings. It would also be worthy to note that BDS movements (Boycott, Divest & Sanction) in solidarity with Palestine should continue to be championed. Over the past year they have undoubtedly contributed to PEP stock sinking 2.25% and MCD struggling to break even. SBUX and KO on the other hand, despite active boycott campaigns, remain up 3.5% & 10.6% respectively. But some thought must be put into why the focus of these boycotts has been on snack foods that are a luxury item. Should we not instead be focusing attention on advanced tech weaponry? MSFT is up 9.78%, GOOG up 23.5%, AMZN up 30%, and META up 61%! It has been well documented this past year how most of the major tech companies have contracts with occupying entity and are using the current genocide as a testing ground for AI. There is no justification for AI being a good for humanity when it comes at the expense of the lives of our brothers in Palestine. However, most “*sharia* compliant” investment guides still list these companies among their top recommendations for Muslims to include in their portfolios. As has already been argued, by investing in fiat-based organization, businesses, ETFs, and mutual funds we are not addressing the root cause of *riba*. We are either not creating truly *halal* capital, are abusing the capital that Allah has entrusted to us or are significantly missing blessings that Allah wants to give us in the capital that we have. If we are following the imperative to attempt to make our wealth as “*riba*-free” as possible, then the first step must be to get off zero bitcoin Here again, the situation in Palestine becomes a good example. All Palestinians suffer from inflation from using the Israeli Shekel, a fiat currency. Palestinians are limited in ways to receive remittances and are shrouded in sanctions. No CashApp, PayPal, Venmo. Western Union takes huge cuts and sometimes has confiscated funds. Bank wires do this too and here the government sanctions nearly always get in the way. However, Palestinians can use bitcoin which is un-censorable. Israel cannot stop or change the bitcoin protocol. Youssef Mahmoud, a former taxi driver, has been running [Bitcoin For Palestine](http://bitcoinforpalestine.org/) as a way for anyone to make a bitcoin donation in support of children in Gaza. Over 1.6 BTC has been donated so far, an equivalent of about $149,000 USD based on current valuation. This has provided a steady supply of funds for the necessary food, clothing, and medication for those most in need of aid (Note: due to recent updates in Gaza, Bitcoin For Palestine is no longer endorsed by the author of this paper. However, it remains an example of how the Bitcoin network opperates through heavy sanctions and war). Over in one of the poorest countries in the world, a self-managed orphanage is providing a home to 77 children without the patronage of any charity organization. [Orphans Of Uganda](https://www.orphans-of-uganda.org/) receives significant funding through bitcoin donations. In 2023 and 2024 Muslims ran Ramadan campaigns that saw the equivalent of $14,000 USD flow into the orphanage’s bitcoin wallet. This funding enabled them to purchase food, clothing, medical supplies and treatment, school costs, and other necessities. Many who started donating during the 2023 campaign also have continued providing monthly donations which has been crucial for maintaining the well-being of the children. According to the [Muslim Philanthropy Initiative](https://scholarworks.indianapolis.iu.edu/items/fd27565f-6738-4d43-a3ad-173a122c617a), Muslim Americans give an estimated $1.8 billion in *zakat* donations every year with the average household donating $2070 anually. Now imagine if international zakat organizations like Launchgood or Islamic Relief enabled the option to donate bitcoin. So much could be saved by using an open, instant, permissionless, and practically feeless way to send *zakat* or *sadaqah* all over the world! Most *zakat* organizations are sleeping on or simply unaware of this revolutionary technology. Studies by institutions like Fidelity and [Yale](https://www.nber.org/papers/w24877) have shown that adding even a 1% to 5% bitcoin allocation to a traditional 60/40 stock-bond portfolio significantly enhances returns. Over the past decade, a 5% bitcoin allocation in such a portfolio has increased returns by over 3x without a substantial increase in risk or volatility. If American Muslims, who are currently a demographic estimated at 2.5 million, were to only allocate 5% ($270 million) of their annual *zakat* to bitcoin donations, that would eventually become worth $14.8 billion at the end of a decade. Keep in mind this rate being proposed here is gathered from American Muslim *zakat* data (a financially privileged population, but one that only accounts for 0.04% of the Ummah) and that it is well established that Muslims donate in *sadaqa* as well. Even with a more conservative rate of a 1% allocation you would still be looking at nearly $52 million being liquidated out of fiat and into bitcoin annually. However, if the goal is to help Muslims hit at least 0.1% chain dominance in the next decade then a target benchmark of a 3% annual *zakat* allocation will be necessary. Islamic financial institutions will be late to the game when it comes to bitcoin adoption. They will likely hesitate for another 2-4 years out of abundance of regulatory caution and the persuasion to be reactive rather than proactive. It is up to us on the margin to lead in this regard. Bitcoin was designed to be peer-2-peer, so a grassroots Muslim bitcoiner movement is what is needed. Educational grants through organizations like [Bitcoin Majlis](https://bitcoinmajlis.org/bitcoin-educational-grant-for-muslims/) should be funded with endowments. Local Muslim bitcoin meetups must form around community mosques and Islamic 3rd spaces. Networked together, each community would be like decentralized nodes that could function as a seed-holder for a multi-sig *waqf* that can circulate wealth to those that need it, giving the poorer a real opportunity to level up and contribute to societ and demonstrating why *zakat* is superior to interest. Organic, marginal organizing must be the foundation to building sovereignty within the Ummah. Sovereignty starts at the individual level and not just for all spiritual devotion, but for economics as well. Physical sovereignty is in the individual human choice and action of the Muslim. It is the direct responsibility placed upon insan when the trust of *khalifa* was placed upon him. Sovereignty is the hallmark of our covenant, we must embrace our right to self-determination and secede from a monetary policy of riba back toward that which is pure. > "Whatever loans you give, seeking interest at the expense of people’s wealth will not increase with Allah. But whatever charity you give, seeking the pleasure of Allah—it is they whose reward will be multiplied." ([Quran 30:39](https://quran.com/30/39?ref=blog.zoya.finance)) ## FAQ **Why does bitcoin have any value?** Unlike stocks, bonds, real-estate or even commodities such as oil and wheat, bitcoins cannot be valued using standard discounted cash-flow analysis or by demand for their use in the production of higher order goods. Bitcoins fall into an entirely different category of goods, known as monetary goods, whose value is set game-theoretically. I.e., each market participant values the good based on their appraisal of whether and how much other participants will value it. The truth is that the notions of “cheap” and “expensive” are essentially meaningless in reference to monetary goods. The price of a monetary good is not a reflection of its cash flow or how useful it is but, rather, is a measure of how widely adopted it has become for the various roles of money. **Is crypto-currency halal?** It is important to note that this paper argues in favor of Bitcoin, not “Crypto” because all other crypto coins are simply attempts a re-introducing fiat money-creation in digital space. Since they fail to address the root cause error of *riba* they will ultimately be either destroyed by governments or governments will evolve to embrace them in attempts to modernize their current fiat system. To highlight this, one can call it “bit-power” rather than “bit-coin” and see that there is more at play here with bitcoin than current systems contain. [Mufti Faraz Adam’s *fatwa*](https://darulfiqh.com/is-it-permissible-to-invest-in-cryptocurrencies-2/) from 2017 regarding cryptocurrency adaqately addresses general permissibility. However, bitcoin has evolved much since then and is on track to achieve global recognition as money in the next few years. It is also vital to note that monetary policy is understood by governments as a vehicle for sanctions and a tool in a political war-chest. Bitcoin evolves beyond this as at its backing is literal energy from CPU mining that goes beyond kinetic power projection limitations into cyberspace. For more on theories of bitcoin’s potential as a novel weapons technology see Jason Lowery’s book [Softwar](https://dspace.mit.edu/bitstream/handle/1721.1/153030/lowery-jplowery-sm-sdm-2023-thesis.pdf). **What about market volatility?** Since the inception of the first exchange traded price in 2010, the bitcoin market has witnessed five major Gartner hype cycles. It is worth observing that the rise in bitcoin’s price during hype cycles is largely correlated with an increase in liquidity and the ease with which investors could purchase bitcoins. Although it is impossible to predict the exact magnitude of the current hype cycle, it would be reasonable to conjecture that the current cycle reaches its zenith in the range of $115,000 to $170,000. Bitcoin’s final Gartner hype cycle will begin when nation-states start accumulating it as a part of their foreign currency reserves. As private sector interest increases the capitalization of Bitcoin has exceeded 1 trillion dollars which is generally considered the threshold at which an assest becomes liquid enough for most states to enter the market. In fact, El Salvador is already on board.