Introduction to NFTs
It is almost 3 years since the term Non-Fungible Tokens (NFTs) become famous in and outside of crypto world. The credit is due to the launching of CryptoKitties, a game developed on Ethereum Blockchain where people can buy collectibles in the form of virtual kittens. The emergence of NFTs has opened up a new horizon for digital artists since they are now able to prove their digital ownership by minting their NFTs on the blockchain. Game and digital arts are only among a lot of other use cases, for instance, trading cards, music, real estate, sports, drawing, tickets, certificates and licensing.
Before I get ahead of myself here, let’s first define what it means by Non-Fungible Token? Well, in simple words, Non-Fungible Token means the token is not interchangeable with another token. To make it more clear, let’s compare with Fungible Token such as Bitcoin. Bitcoin has the same value everywhere in the world and we can exchange them directly without any issue. Meanwhile, NFTs are unique, one token is not the same as another. They have their own specific owner address attached to it, thus proving ownership of that particular NFT. Usually, when people are speaking about NFTs, it is most likely they are referring to digital creative arts. But here in Twistcode in this time, we will regard NFTs as certificates.
Shariah’s Perspective
According to Mufti Faraz Adam in this article, NFTs are reviewed by scholars based on these six guidelines.
Maliyyah means wealth. It also implied a thing which a reasonable people find to have a value. For example, gold and cash.
Taqawwum means legal value. NFTs thus must be lawful and bring benefits to people. In terms of digital arts, the artists themselves can get benefits by selling their creative crafts on the blockchain.
Manfa’ah Maqsudah literally means purposeful utility. It means that if the NFTs are utilized for some services, they must be a shariah-compliant service, sensible, and sought by people.
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Extravagance (Israf) and wastefulness (Tabdhir)
What Shariah considers as waste of money and extravagance, should be avoided. The examples of useless, trivial and wasteful NFTs are like some digital arts with the purpose to make fun of politicians or some sort.
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Any potential Shariah infringements.
NFTs in the form of digital arts or others which can be bought and sold, typically are ended up just to be a tool for money launderers. Meanwhile, NFTs that in the form of utility, such as university certificates are free from this Shariah violation.
of investing in such assets and how it impacts the remaining wealth of a person to fulfil their Islamic duties and obligations in particular to maintaining oneself and their family.
