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What are the halakhot that apply to bitcoin? Is it halakhickly money? What even is the halakhic definition of money? Can bitcoin transactions be made over shabbat? That sort of thing.

Kazi bácsi
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הראל
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3 Answers3

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http://www.ou.org/torah/tt/5763/korach63/specialfeatures_mitzvot.htm

Jewish law distinguishes three categories of value: goods, which have inherent value; a note, which is a promise of value from a particular individual; and money, which is abstract value.

You might think that Gold and Silver coins have inherent not abstract value, but as the Chazon Ish said, Gold and Silver have no actual material use. People want them only because they are rare, and that means they have abstract value.

Bitcoin, and the balance in your electronic bank account, are the same: They have only abstract value, and are therefor money in halacha.

PS. It would be pretty hard to actually spend bitcoins on Shabbos since they are electronic only.

Ariel
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    Those aren't real coins, since they can only be used once. Once the coin address is redeemed it can never be used again. Well, I guess you can trade coins with people without ever actually redeeming the address, but I think halachically doing that would be the equivalent of a promissory note, since you aren't exchanging money, you are exchanging the promise of money. – Ariel Mar 12 '13 at 06:27
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    @Ariel Therefore they are bitcoin futures. :) – Charles Koppelman Mar 12 '13 at 18:25
  • @CharlesKoppelman Very clever! When, and if, there are forward contracts, i.e. futures, or options-on-futures, on bitcoin, I think the same halakhot would apply as to any other financial- or physical-based commodity (derivative) though. – Ellie Kesselman Mar 17 '13 at 08:16
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Short answer: Bitcoin is the same as money.

Long Answer: Halachically , in the talmid money is anything which is minted and has a face on it. (Talmud bavli shabbat, muuktzeh) the Talmud compares a melted coin and a coin in regards to muktzeh on shabbat. Though the melted coin has value there is no risk of it being used in a transaction. The value of the slug itself might actually go up or down in value causing interest problems. However, business transactions and laws of interest etc are based on anything that can be exchanged for something of value. (You notice this the most at weddings when a hankerchief or pen is used as a method of transferring ownership) Money is muktzeh on shabbat because of it's connection to a contract, and one is not allowed to write on shabbat. Meaning the important thing is the contracts, not the form of money itself. Bitcoins are no different from the usage of credit cards or online shopping or checks where no physical money is transferred.

avi
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    If a pen is money, why can I charge you to borrow it? – Double AA Feb 02 '13 at 23:42
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    So because I can go to a pawn shop and convert jewelry, electronics, and antiques into money, those things are money – Monica Cellio Feb 03 '13 at 00:49
  • @DoubleAA, IINM (CYLOR) you can charge me to borrow money, too, if you require the same bills back (i.e., it's a sh'ela not a halvaa). – msh210 Feb 03 '13 at 05:11
  • @msh210 I was referring to halvaa which would be permitted (at least biblically, or even rabbinically if I own at least one other pen somewhere else) when borrowing pens. Do you have a better word than 'borrow' to use in English to distinguish the two concepts? – Double AA Feb 03 '13 at 05:13
  • @DoubleAA, I once looked into it, and apparently there is none. (I thought I did so searchably online but cannot now find it.) – msh210 Feb 03 '13 at 05:26
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    If @msh210 can't find an English word for it, then no such word exists. – Double AA Feb 03 '13 at 05:27
  • @DoubleAA, who says you can charge to borrow it? That's renting. If you charged for merely possessing it and not utilizing the ink contained therein, that might be a different story, but then what value are you gaining by borrowing it? – Seth J Mar 04 '13 at 22:05
  • @SethJ You gain the right to use it as a paperweight and show it off to your friends. – Double AA Mar 05 '13 at 00:06
  • @doubleaa, but is it not then a rental? – Seth J Mar 05 '13 at 00:49
  • @SethJ Use She'elah, Halva'ah or Sechira please. I don't know what you mean otherwise. – Double AA Mar 06 '13 at 08:06
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    You contradict yourself. You say bitcoin is money because anything minted which has a face is money. But bitcoin is not minted and has no face, so you have not established that it is money. – Ariel Mar 11 '13 at 06:57
  • @Ariel You need to read to the end of the answer. – avi Mar 12 '13 at 07:53
  • @avi I don't disagree with your conclusion, but rather the method by which you arrived at it. – Ariel Mar 12 '13 at 08:52
  • @ariel I'll try to clear it up, the statement that bitcoin is money is unrelated to how the talmud views kesef. – avi Mar 12 '13 at 08:57
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All cryptocurrencies (bitcoin etc.) are not money and never will be. According to Torah Law (Bava Metzia, where it discusses why money cannot be used for a kinyan / acquisition because a person has his attention on the seal on the money-source needed ) and even secular law. Though they might share some characteristics. There is no government issuing it as currency. No goverment, no judicial branch, no laws, no executive branch. Not money

Yosef Nanach
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    How do you know they never will be? – Double AA Apr 01 '14 at 17:21
  • Notice all real currency is always associated with a signature, a name, a land. All crypto "currency" does not require a name nor a signature (or seal) Once these things are required (and the other conditions are met) Then it is currency. Like the dollar. Like the Torah says. No seal from the government (as official money) not money. Once a signature (or seal) is required then it's not cryptocurrecy. – Yosef Nanach Apr 01 '14 at 17:41
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    [Edit]ing into your answer how you know such a government approbation is required halachikally would greatly improve its value. Right now it's just the word of a random internet user with the last name "Nanach". – Double AA Apr 01 '14 at 17:43
  • Cryptocurrencies are actually built on top of signature systems, digital, cryptographic signature systems though: the khan academy series is informative: www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/bitcoin/v/bitcoin-what-is-it – הראל Apr 01 '14 at 18:07
  • The seal comes from the individual sending the 'money', not the government, does that matter? – הראל Apr 01 '14 at 18:08
  • A number is NOT a signature by Torah law. Though a signature can be associated with a a number but a code is not a signature. A signature is with a name and made with a hand . – Yosef Nanach Apr 01 '14 at 18:14
  • Both signatures are important. But the signature / seal of the government is what authenticates and verifies it as money. Everyone would agree that a dollar bill that had no signatures and no governmental seals is not a dollar. What makes a dollar a real unit of real currency in any real court of law is the authorizing government of the United States of America. If this authority tomorrow decided that the Dollar was not currency then it would not be because they said so. – Yosef Nanach Apr 01 '14 at 18:26
  • @YosefNanach several Amoraim signed their names with symbols - doesn't have to be a name. (And as DoubleAA said, sources would improve the value of your answer.) – Y     e     z Apr 01 '14 at 19:11
  • Most modern currency is "signed" by computer/printer not by hand. – Double AA Apr 01 '14 at 19:51
  • These sages had names though and the "chotem" can be anything that they decided is their signature. If i make a scribble my signature when i open my bank account for example then this scribble is my signature. I could even have my signature on a rubber stamp. It is legal. Or a photo copy. It all works both in Torah law and in secular law. – Yosef Nanach Apr 01 '14 at 19:54
  • However no one but no one ever uses a computer generated code as a signature to authenticate a check or to sign a contract. It is Not a signature. Not for a deed for a piece of land not for anything. If i decided to sign my name with a symbol or initials etc. if that is the way I sign my name then that is my signature legally. However, even if my name and all my personal information was printed out on paper it is not my signature. Never will be Not by Torah not by any secular law. Is there something you don't understand about this? – Yosef Nanach Apr 01 '14 at 19:55
  • All of my ideas can be verified in Perek HaZahav Bava Metzia, and Rebbe Nachman and any contemporary Government. Not a single government recognizes any crypto"currency" as money, nor as coin nor as funds nor as currency. Because it isn't. Neither does the Torah neither does any economist. If you are more specific about your question i would be delighted to find a specific source. Financial law in the Torah is VERY complex but i will say this. The sugia of Perek HaZahav adresses the issue very thoroughly. Chapter four Bava Metzia. – Yosef Nanach Apr 01 '14 at 20:28
  • @YosefNanach, Not taking any position on your general answer, but you are simply wrong about about a computer generated codes being signatures. Look up the Electronic Records and Signatures in Commerce Act. Many countries have similar laws these days. Lawyers don't trust them, as they are untested in court, but that is just one of those dysfunctions of American law things. – Yishai Apr 01 '14 at 20:44
  • One can use a non money as a measure of exchange. Though this would be barter. Crypto"currenies" work like barter. – Yosef Nanach Apr 01 '14 at 20:47
  • Yishai, thank you for your comment. The Electronic Records and Signatures Act has requirements to make a digital signature valid and not a forgery. Among its requirements is that one file for an official certificate. For one to officially obtain a legally binding digital signature one must fill out a form and submit it to an authority that issues the digital signature. This form requires amongst other things, a valid passport picture and a hand signed signature to complete. Without this hand signed signature ( with passport picture) this digital signature has absolutely no legal significance – Yosef Nanach Apr 01 '14 at 21:23
  • As mentioned before a number or code cannot be a legal signature unless this number is associated with a hand signature. Crypto "currency" has no such requirement and therefore cannot ever be real money in any court of law. Torah or secular. if there is No Government that issues it themselves. Then no government will acknowledge it. Once a government authority verifies an identity then yes a code can be used to verify a document BUT ONLY after a form has been completed with a signature (more the one signature in this case) – Yosef Nanach Apr 01 '14 at 21:34
  • @YosefNanach, I think you are confusing a digital signature with an electronic signature. The former is about cryptography and repudiation. The latter is the replacement for a pen on paper. – Yishai Apr 01 '14 at 22:38
  • @Yishai No i am talking about digital cryptographic signatures. Just use your mind and think about it. If there is No trusted third party to identify a person or legal entity. Rather an individual simply generates a code and later on provides a key. All that "proves" is that he now has a key it does not prove that he is that person. A person cannot generate his own identity. If i could "sign" a check with a code that i generated by myself, all this validates is the computer that generated the code. It does Not validate the person. What proof is there that i "signed" anything. – Yosef Nanach Apr 02 '14 at 05:32
  • @yosefnanach, I was talking about what is legally a signature. Pen on paper = seal = electronic signature. – Yishai Apr 02 '14 at 11:31
  • A legally binding DIGITAL SIGNATURE MUST be verified by a third party certificate authority. This authority will not issue your digital cryptographic signature without your hand signature. Not true? – Yosef Nanach Apr 02 '14 at 11:41
  • @Yishai What i understand to be an ELECTRONIC signature is an electronic printable image of a persons hand signature. Are we understanding one another on these terms? – Yosef Nanach Apr 02 '14 at 11:44
  • Both of these signatures are legally binding and can validate legal contracts cryptocurreny REQUIRES neither. – Yosef Nanach Apr 02 '14 at 11:47
  • http://www.justice.gov.il/NR/rdonlyres/7554DECF-BA18-465E-8565-D8F090F56018/0/3.pdf – Yosef Nanach Apr 02 '14 at 11:54
  • @YosefNanach, A digital signature requires no third part (e.g. PGP) and those that have third parties, the third parties don't necessarily require a physical signature anywhere in the process. An electronic signature under the Act is "an electronic sound, symbol, or process" and is deliberately vague to allow the market to decide. I'm not addressing how that applies to Bitcoin = money in halacha, as I'm not sure. I think Bitcoin takes things previously indivisible and divides them, leaving a Halachic question about which component is controlling. – Yishai Apr 02 '14 at 13:55
  • Bitcoin's signing process would almost certainly qualify as a signature under the (American) Act. Whether or not that makes Halachic money is another matter. I was just correcting the factual assumptions you were making in arriving at your answer. – Yishai Apr 02 '14 at 13:56
  • @YosefNanach, looking at Israel's law that you linked, it is way more restrictive than what is prevalent in other countries. Nothing that I saw in that law required a pen on paper signature, but it allows for the government to require that, so perhaps they do in practice. – Yishai Apr 02 '14 at 14:02
  • @Yishai you seem to be missing my point. Crypto currencies are not signed in as being a currency by a government. – Yosef Nanach Apr 02 '14 at 14:39
  • A digital cryptographic electronic signature alone cannot be a secure validation without an identified person registered by an authorized magistrate. They must fill out a form, give personal information and prove legally that they are who they are. Cryptocurrency production and signatures do not require an identity nor authorization such as this and ALL real money does. – Yosef Nanach Apr 02 '14 at 14:49
  • Gold requires no signatures, this is because it is not real money as asserted in the answer from @Ariel if my understanding is correct? And cash requires no signature by a human hand? So? I have to admit I am perplexed at this point. What is the body of halachah on signatures called? – הראל Apr 02 '14 at 15:27
  • @Hockenhull gold of itself is just a commodity – Yosef Nanach Apr 02 '14 at 16:04
  • @Hockenhull Money, of necessity must be minted, and issued by a governing authority. This official issue if money must be sealed. The Hebrew "chotam" means seal and signature. If it is not signed and sealed as money by a recognized governing authority then it is not. The US dollar is issued by such an aithority. The US dollar is not just paper it is money because it is sealed and stamped and printed and signed as money. Crypto "currrency" is mot real currency because it lacks this requirement. Just like monopoly money is not real money. Even if we use it netween us for tade. – Yosef Nanach Apr 02 '14 at 16:13
  • Cash DOES require a seal and signature yes without it. It is not cash – Yosef Nanach Apr 02 '14 at 16:15
  • @YosefNanach, I'm not missing that point. I'm just saying it is a valid signature method (in some countries, anyway). In the case of Bitcoin, it is just that private individuals sign it, not the government. In other words, the controlling factor in your answer is really that it isn't signed by the government, rather than the nature of the signature. I'm not, as I said, commenting on that. My only point was that it is done via valid signature method, albeit not by a government representative or under government authority. – Yishai Apr 02 '14 at 16:28
  • @Yisai I understand what you are saying. I agree that cryptographic digital signatures can be legally binding signatures. But even so it is not enough to validate the issue of real money. We need more Torah sources on what actually is a valid signature or seal in order to go more in depth about this point. Either way my main point remains clear I hope : ) – Yosef Nanach Apr 02 '14 at 16:40