Prohibition of "Zarar" in Islam: The case of Crypto Currency

Abstract

Virtual Currency also known as Crypto Currency has become people's new form of assets in recent times based on network that is distributed across a large number of computers. It is now important to figure out whether it is Sharia compliant or not. Virtual Currency has various characteristics which traditional currency doesn’t have such as its availability only in digital form on computers and mobile phones, hidden identity of buyer and seller during transactions, not issued by any central authority and not controlled by any government or state bank. This decentralized structure of Virtual Currency is completely new and different from other traditional currencies; hence it has to be examined under Islamic Sharia Law. "Zarar" is one of the crimes which are prohibited in Islamic Law. While creating and dealing with Virtual Currency there are huge costs of electricity and mining hardware which is the example of "Zarar" and cannot be ignored. In this article it has been discussed in detail the concept of "Zarar" in Islam and has been explained how majority of people are involved in "Zarar" by dealing in Crypto Currency.