Chapter 9. Crypto staking from the Shariah perspective
Proof of Stake (PoS) is a consensus methodology for blockchain platforms, proposed as an alternative to Proof of Work (PoW) mechanisms. Its primary objective is to validate transactions and ascertain the truthfulness of on-chain data. Users who stake their funds receive incentives in the form of new...
| Authors: | ; |
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| Format: | Electronic Article |
| Language: | English |
| Check availability: | HBZ Gateway |
| Interlibrary Loan: | Interlibrary Loan for the Fachinformationsdienste (Specialized Information Services in Germany) |
| Published: |
2024
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| In: |
Islamic finance in the digital age
Year: 2024, Pages: 150-164 |
| Further subjects: | B
Validate Transactions
B Proof of work (PoW) B Defi B Shariah compliance B Locking funds B Blockchain B Proof of stake (PoS) B Technical aspects |
| Online Access: |
Volltext (lizenzpflichtig) |
| Summary: | Proof of Stake (PoS) is a consensus methodology for blockchain platforms, proposed as an alternative to Proof of Work (PoW) mechanisms. Its primary objective is to validate transactions and ascertain the truthfulness of on-chain data. Users who stake their funds receive incentives in the form of newly minted cryptoassets or transaction fees, making staking a prevalent investment activity in the cryptocurrency domain. However, for users adhering to the Islamic faith, staking introduces a distinctive challenge, particularly concerning its alignment with halal principles. This area represents a significant research gap, with shariah scholars actively engaging in the assessment of this phenomenon from a fiqh perspective. A thorough understanding of the relevant fiqh principles and rulings, in conjunction with the technical and operational facets of staking, is imperative. This chapter delineates two forms of staking: (1) staking on a Proof of Stake (PoS) blockchain, and (2) staking as the act of locking funds in a smart contract for a designated purpose. Subsequently, it explores the shariah compliance of both types. |
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| ISBN: | 9781035322954 |
| Contains: | Enthalten in: Islamic finance in the digital age
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| Persistent identifiers: | DOI: 10.4337/9781035322954.00019 |
