Bitcoin as an asset

RNA - Virtual currency, according to the Governmental Jurisprudence, has different dimensions, and its analysis from the stance of the individual jurisprudence shouldn’t render its examination from the position of governmental jurisprudence redundant. A question has recently raised across the society is that whether the use of Bitcoin, and generally virtual currency, is regarded legitimate by the Jurisprudence or not.

Bitcoin as an asset

Literally, an asset includes those assets and properties owned by the man. Having the features of an asset (or generally being an asset) is the fundamental condition of the subject of the transactions (what is purchased and paid). Asset has been defined differently by different jurisprudents (Faqihs).

The cause of differences among the jurisprudential definitions of the asset is the credit status attributed to it, as the asset doesn't have any actual essence, and it is deemed as a credit material whose value depends on the credit attributed to it by the wise; moreover, such a credit may be different in different times.

The following arguments suggest that Bitcoin is an asset:

1. In order to earn it, people are ready to pay money.
2. Once bought, if its value rises, the owner can use the accrued value for his transactions. Therefore, Bitcoin bears reasonable benefit/s and thus, the civil law/custom assigns the status of an asset to it.
3. The number of Bitcoins is limited. Besides, its process of creation guarantees that it remains limited.
4. The possibility of buying goods using Bitcoin, and the possibility of changing it to common currencies form two other reasonable bases for Bitcoin and accordingly, Bitcoin is an asset.

Acquiring Money through the Wrong/Illicit Ways

This principle is extracted from the Quranic expression “لا تَأْكُلُوا أَمْوالَكُمْ بَيْنَكُمْ بِالْباطِلِ” (Do not consume each other’s wealth illicitly”). Regarding the letters “باء”, two interpretations are possible: According to the first, it is the means of the causality, and thereby, the expression suggests that “don’t acquire/seize the assets of each other assets using force”. For the second, the letters are the means of contrast, and accordingly, the verse means that “don’t acquire and consume the assets/properties of others paying ill-gotten money/things”.

Acquiring Money through the wrong/illicit ways doesn’t apply to Bitcoin, because;

1. Bitcoin is earned through accounting operations.
2. As suggested above, Bitcoin is an asset, therefore its transaction shouldn’t be seen as acquiring money through illicit/wrong ways, and thus it legitimate.

Aleatory sale

The sale of a property that its face dupes the purchaser, and besides, its true essence is not known is aleatory. In short, aleatory sales fall into three categories:

1. a) It is aleatory or unsafe, for the submission of the subject of transaction, like a bird in the sky or a fish in water, is uncertain.
2. b) It is unsafe, as the conduction of the transaction is possible to be unfulfilled, i.e. there is no certainty around the subject of transaction or what is to be paid for it.
3. c) It is unsafe as the amount, material or definition of what is to be transacted (subject and what is paid) are not known, for instance when the purchaser is not aware of the quantity or quality of the subject of transaction.

Issues specifically defined by the civil law as unsafe, to be avoided, are aleatory and will render the transaction null and void. Nonetheless, if what is unsafe is regarded as insignificant by the civil law, it won’t nullify the transaction. In the transaction of Bitcoin, nonetheless, the subject is handed over, the subjects of transaction (amount and price) and their status are fully known.

To be continued...

Mahdi Khosh Akhlagh