Zakat is a religious obligation for Muslims. It is a way of giving back to the community and supporting those in need. The word Zakat means “to purify” and it is seen as a way of purifying one’s wealth.
Zakat is calculated on a person’s net worth and is typically 2.5% of a person’s total assets.
Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Bitcoin is unique in that there are a finite number of them: 21 million.
So, how much is Zakat on Bitcoin?
Zakat on Bitcoin would be calculated as 2.5% of the total value of all the bitcoins in circulation. As of writing this, there are approximately 18.5 million bitcoins in circulation with a total value of around $215 billion.
This means that the Zakat on Bitcoin would be approximately $5.4 billion.