nostr:nevent1qqs0hhzx62expk0nfr9wu0en3zhe3p7p40ln0cdgqk7agcueftwdr4syexp9c
Discussion
Thanks for this note.
There was a recent conversation between church of covid19-84 and Dean Burton which you may find of interest.
note1g8dzzhctav9y57fwgpts2nrgdeca800vdv9c4qpwnvx5hmg4r5ys0v5rtj
Interesting take. My first thought is that this extremely valuable and hoarded Bitcoin concentrated in the hands of early adopters is ought to be subject to Zakat or invested back in needed businesses (which are also subject to Zakat).
The point of Zakat on gold and silver is not to be hoarded; same goes with Bitcoin.
Amrush, you’ve given me a reason to pick up al-Qardawi’s Fiqh of Zakat from my bookshelf!
I note there’s a potential dichotomy in the view that money ought to be under the remit of the state (in the interests of avoiding chaos) but also treating Bitcoin as money when it comes to zakat.
On a wider point, it saddens me that most people seem disinterested in monetary matters even though money is arguably one of the most important social constructs and that its societal impact is so significant.
I also think that the absence of monetary justice facilitates widespread oppression. Therefore, a decent understanding of the current and a better monetary system ought to be more prevalent - if people really care about justice.
I haven't read the book, and I'm absolutely new to Islamic finance, so excuse me if I err. My interest has originated because of the Zakat issue that Bitcoin has created for me. Alhamdulillah.
I think that Shaikh Al-Qaradawi's opinion about money being the remit if the state, particularly if it is the only stopgap to avoid chaos, has been nullified by central banking. If there are other reasons, I cannot speak for it.
If anything, as bitcoiners, you and I think that BTC is more stable on the long run. A 100 years of central banking only gave us the illusion of stability.
As for monetary justice, people are starting to perk up. The inflationary pressure that people are feeling will eventually lead to questions.
Again, fiat money is Riba. Allah has declared war on user's of Riba. It will end no matter what. And people will be freed from this monetary injustice. The question is: are we in a position to offer a suitable global replacement? BTC in its current state is still ways away.
1. Maximum Bitcoin supply: Approximately 21 million BTC (actually using 20.5 million BTC for calculations)
2. Current world M2 money supply: Approximately $100 trillion (estimate)
3. Required proportion to function as a reserve currency: At least 20% of global M2 (conservative estimate)
Calculation:
1. Required total value = $100 trillion × 20% = $20 trillion
2. Required value per BTC = $20 trillion ÷ 20.5 million BTC ≈ $975,610/BTC
This means that for Bitcoin to have sufficient liquidity as a reserve currency, it would need a value of about $1 million per BTC (more precisely $975,610).
According to data tracked by ETC Group and Glassnode, entities with no liquidity currently own 14.61 million BTC. Re-evaluating the situation based on this data:
1. Total Bitcoin supply: Approximately 20.5 million BTC
2. Owned by entities with no liquidity: 14.61 million BTC
3. Remaining liquid Bitcoin: 20.5 million - 14.61 million = 5.89 million BTC
Updating the previous calculation with this new information:
1. Required total value (same as before): $20 trillion
2. Liquid Bitcoin: 5.89 million BTC
3. Required value per BTC = $20 trillion ÷ 5.89 million BTC ≈ $3,395,585/BTC
This result reveals the following points:
1. Need for price increase: A value of about $3.4 million per BTC (more precisely $3,395,585) would be necessary. This is about 113 times the current price.
2. Extreme price surge: Compared to the previous calculation ($975,610/BTC), this requires more than a 3.5-fold increase.
3. Accelerated wealth concentration: Wealth would be further concentrated among holders of the 5.89 million liquid BTC.
4. Market vulnerability: The low liquidity could lead to increased market volatility.
5. Accessibility issues: Such high prices would make it even more difficult for average people to own Bitcoin.
6. Increased deflationary pressure: The effective reduction in supply would further intensify deflationary pressures.
I think there’s a fear of deflation as we are so used to living with currencies which are, as a matter of government policy, supposed to lose value at a steady rate (2% inflation target).
One interesting view is that if Bitcoin succeeds it will give people more time to discern what to spend their money on.
Are you aware of nostr:npub1s05p3ha7en49dv8429tkk07nnfa9pcwczkf5x5qrdraqshxdje9sq6eyhe ‘s work? It gives good reasons to welcome technology’s ability to make lives better and not to fear deflation.
I personally don't think society will change in that way.
Even now, intelligent and moralistic individuals are manipulating stocks and real estate to accumulate vast wealth.
While they are engaged in social charity work, they are also unconsciously hacking harmful systems even more.
Therefore, I believe that what those who feel there is a problem with this should do is to temporarily modify the existing system to a parallel state.
I think it would be very difficult to achieve something like that, so I believe it's better to use Bitcoin to address individual issues in each region