Bitcoin makes Dental Practice 1000x More Profitable
An incredible metric, isn't it?
You have heard of this Bitcoin thing right! A lot of people are excited about Bitcoin and many are freaked out by this new kid on the block.
When you asked someone to clarify a Bitcoin, they said it was a cryptocurrency. Secretly, you think to yourself; what in god's name is a CRYPTOCURRENCY??
Dentists are accepting Bitcoin for payment in their practice now. You are wondering if you should be doing this as well? Is it really smart to use this new form of payment from patients who actually want to spend Bitcoin?
Great questions. Let's first DE-MYSTIFY Bitcoin and see how you can prepare your dental practice for this technology in a profitable way.
DE-MYSTIFYING Bitcoin
First, forget everything that you know about Bitcoin. Instead let's talk about something simple. Like Peaches. Yes the fruit!
You have a patient who has a filling done today. The cost of the filling, 1 Peach. Yes, you now accept payment in the form of Peaches. The patient brings you 1 Peach and you are now 1 Peach richer.
This physical trade happened between you and the patient and no person in between was needed. On the other hand, what if this was not a physical trade?
Let's say that the patient has a digital peach on their computer and they wanted to give you the digital peach for payment. So they email you their digital peach. But wait, what if the patient had already sent the same peach to another person as payment. How do you know that the patient actually owns the peach that they are giving you as payment? This problem is known as Double-Spending.
Once physical trades are substituted for virtual trades such as the digital peaches, the problem of Double-Spending becomes an issue. Hence, all peaches in the system have to be tracked in order to make sure no one is cheating and double-spending their peaches.
This type of bookkeeping is called a Ledger. So, who keeps this ledger?
In traditional systems, banks maintain these ledger and they ensure that every transaction is valid and recorded. The bank becomes a Intermediary in the transaction between you and the patient. This has added cost such as:
- A Cost of Transaction
- Delay in Processing the trade
- Trust has to be placed in the banking system
You can imagine how this system's efficiency decreases further when insurance is involved as more intermediaries have to be part of the transaction. With each added party, more transaction cost and time delays are added.
Bitcoin, theoretically, can solve both of these problems.
How, you ask?
In bitcoin, the ledger is publicly maintained by many people around the globe. Even you can keep a copy! (There is a trust-based incentive to keep this ledger). When a new transaction occurs, everybody who keeps the ledger adds this new transaction to their own copy of the ledger. Double-spending is virtually impossible as each new transaction chains itself to older transactions and cannot be changed once processed.
This approach decreases processing time as transactions can be verified a lot faster with a lower cost (the cost of transacting on bitcoin is very high right now due to market volatility) and trust doesn’t have to placed in a centralized institution such as bank.
To sum up, bitcoin is a new form of Digital Currency that uses technology to prevent cheating and removes the need for trust intermediaries such as banks from transactions.
Should you start using bitcoin?
Bitcoin is exciting and it's new. Certainly, using bitcoin can make a practice more profitable by saving lots of money on credit card fees and time in payment processing. Especially as insurance companies begin to utilize Bitcoin, the cycle of treatment, coding, insurance payment can become fast and cheap. However, currently the state of the Bitcoin ecosystem is less than ideal. Here are the Pros and Cons for accepting Bitcoin in your dental practice.
Pros of using Bitcoin
- Everyone is talking about it. Dental practices that start accepting bitcoin grab media attention. It is a wonderful way to get FREE PRESS!
- Pioneering the technology. You are not first to the bitcoin game but it is still very early in Bitcoin's existence and you could definitely reap huge rewards by investing early in the technology.
- Bitcoin is increasing in value right now. (Right now being Jan 1, 2018…if you are reading this way in the future the value of the currency could be much higher or significantly lower) The amazing thing about bitcoin is that in the 2017 its value increased 800%. This gain is unheard of in the free market. So either run away or get involved.
Cons of using Bitcoin
- Bitcoin is extremely volatile. If you receive a payment of 1 bitcoin today, it could be worth twice as much tomorrow or worth half or worse nothing. It is a gamble and not at all in line with a dental practice philosophy.
- Transaction cost is high. Due to the speed at which investors are trading bitcoin, transaction fees for sending bitcoin is very high.
- It is a complex setup. Setting-up payment of bitcoins is not easy (requires technical expertise). Especially, If you don't want to have all your Bitcoin stolen, you will need an IT professional.
- Not many patients have bitcoin. This is probably the biggest reason for not using bitcoin in your clinic. It will rarely get used and be more trouble than it is worth
Every dentist should know about Bitcoin because this technology is a paradigm shift for payment. However, accepting Bitcoin in a dental practice today is not an effective or efficient payment solution.
As the ecosystem of Bitcoin grows and the currency itself matures, you will notice more businesses begin to offer this as a form of acceptable payment. When 1 in every 10 patients in your practice considers using Bitcoin to pay for their visit you should definitely already have 'Bitcoin Accepted Here' advertised on you practice window.
You want to get started with Bitcoin?
To accept bitcoin in your dental practice, you can signup with BitPay that processes bitcoin payments. BitPay offers apps that sync its services to a range of point-of-sale programs. If your POS system doesn’t work with BitPay, Bitcoin Checkout allows you to accept these payments in person with your smartphone. Please understand this ecosystem more in depth before jumping in as there are several safeguards you will have to put in place to protect your shiny new Bitcoin.
What do you think. Should dentists accept bitcoin as a form of payment? Is Bitcoin never going to be a good fit for a dental practice?
