Bitcoin mining is a complicated computational and technical process that validates bitcoin transactions on the Bitcoin network. It is similar to verifying a block on the chain network and receiving payment in Bitcoin. Miners are those who are active in the mining process. The term “mining” refers to the fact that, like other natural resources, there is a limited quantity of bitcoins accessible. The total number of Bitcoins that may be generated or mined is limited to 21 million.
Bitcoin mining, like true mining, requires an investment of energy in order to generate or manufacture bitcoins. And in this case, the energy is in the form of electrical energy, which is used to mine bitcoins. Miners compete against one another to solve complicated hash problems that are cryptographically encoded to validate the blocks containing transactions.
Whoever is the first miner to estimate the number wins an opportunity to alter the log of transactions on the Bitcoin blockchain network, as well as a prize of newly-minted bitcoins. It should be mentioned that the machine does all of the number guessing. As a result, the more powerful the computer, the more estimates a miner may make per second, increasing the odds of winning this race.
The Dilemma of Bitcoin in Islam
Most Islamic jurists believe that whethercrypto ishalal orharam will not be easily settled. Somebelieve cryptocurrency to be halal, while others consider it to be haram. Yet, the majority of researchers believe that trading in cryptocurrency is prohibited since it has no intrinsic value. It has no commercial worth, and it does not haveany kind of origin. It has not yet been adopted by mostorganizations, and its value is solely determined by market fluctuations. Most parts and functionalities of bitcoin or other cryptocurrencies are haram, and they are utilized for gambling and other crypto haram activities.
But isBitcoin mining permissible? The short answer would be yes. Bitcoin mining is permissible under Islamic law. Bitcoin mining is simply the process of using a Proof-of-Work mechanism to validate transactions on the Bitcoin network. Bitcoin miners that successfully verify transactions provide a service to Bitcoin users as well as security to the Bitcoin network, and they are compensated in Bitcoin for their efforts, which is not illegal.
Because it does not include haram acts, Bitcoin mining is definitely halal under Islamic law. Since some blockchain technologies are open, fair, and transparent, they meet the majority of the Islamic requirements for a halal transaction, such as the recording of all transactions and the availability of witnesses.