Cryptocurrency in Dermatology
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Cryptocurrencies are rapidly becoming a mainstream financial tool as evidenced by Bitcoin recently surpassing $100,000. This milestone signals a significant shift in the global economy, offering new opportunities for innovative payment methods. The growing acceptance of digital currencies, combined with an increasingly supportive regulatory environment, presents an exciting chance to enhance financial efficiency and attract a more diverse patient base. Dermatology practices, particularly those focused on cash-based and cosmetic services, are uniquely poised to benefit from integrating cryptocurrency into their operations.
Why Should Dermatology Practices Accept Cryptocurrency?
Dermatology practices are especially well-suited for accepting cryptocurrency. Many cosmetic treatments, such as Botox, fillers, microneedling, and chemical peels, are typically paid for out of pocket, making them ideal for cash-based models. Additionally, our field sees significant medical tourism for high-value procedures like hair restoration, liposuction, and advanced laser surgeries. Patients from countries with unstable local currencies or complex exchange rates may find cryptocurrency a practical and secure alternative for payment. International transactions utilizing cryptocurrency are completed within minutes, whereas traditional international payments conducted through SWIFT (Society for Worldwide Interbank Financial Telecommunication) may take several days to process.
If dermatology practices accept cryptocurrency, patients can ensure they will receive medical care without regard for their country of origin. Indeed, storing assets as cryptocurrencies can protect individuals against the actions of tyrannical governments. Many authoritarian regimes may arbitrarily seize assets of individuals deemed to be “criminals,” and nations without independent central banks can devalue their currency on a whim and eliminate citizens’ entire life savings. Legally dubious actions such as debanking (a bank closing a customer’s account that it deems poses a reputational risk) even occur in the United States and other supposedly free economies.
Acceptance of cryptocurrency can also help position certain medical practices as futuristic, freedom-loving, and tech-savvy, and thus attract the growing demographic of cryptocurrency enthusiasts. By incorporating cryptocurrency payments, dermatology practices can cater to this expanding demographic of medical tourists and cosmetic patients while enjoying greater payment flexibility.
The Cost Advantages of Cryptocurrency
Although the startup cost for cryptocurrency adoption may seem daunting, there is some evidence that cryptocurrency transactions have the potential to improve financial efficiency as technology continues to evolve. For example, although credit cards remain a popular payment method for dermatology services due to their convenience, the associated transaction fees—often 3% to 5%—can eat into a practice’s revenue. Cryptocurrency payment systems, on the other hand, may incur fees as low as 0.5%, providing significant savings over time. In an era of rising inflation Cryptocurrency in Dermatology As this payment method gains broader acceptance, it represents an exciting frontier for dermatology practices looking to modernize their operations. Aamir Hussain, MD, MAPP 38 January/February 2025 | The Dermatologist® | the-dermatologist.com Business Insider and thinner margins on medical care, this slight disparity in fees may keep struggling practices profitable. For cash-based cosmetic practices, this cost reduction could lead to higher profitability while still offering patients a modern and convenient payment option. Although certain older blockchains such as Bitcoin may take several minutes to process transactions, newer payment systems such as those on the Solana network are specifically geared toward transactions that can be processed in milliseconds.
Additionally, cryptocurrencies can be subdivided into more precise units than fiat (traditional) currencies; the smallest Bitcoin units are known as satoshis (or “sats”), where 100 million sats is equivalent to 1 Bitcoin. Individuals may purchase Bitcoin in smaller increments than they could for fiat currencies, which are generally only measured to 3 or 4 decimal places. This precise subdivision may eventually improve the precision of medical reimbursements by allowing more significant digits to be used in computational transactions.
This precision may also aid in other business aspects of the practice. For instance, practice owners can consider disbursing a percentage of their revenue to partners as shares in various cryptocurrency assets. These assets have the advantage of being subdivided more precisely than fiat currency and the potential for a higher investment upside when compared with traditional stock options.
Streamlining Payments with Smart Contracts
Blockchain technology introduces another compelling innovation: smart contracts. These are self-executing agreements embedded directly into the blockchain, ensuring that transactions occur automatically when predefined conditions are met. No third party is needed to verify these transactions, therefore streamlining the payment process. For dermatology, this could mean automating payments for services such as telemedicine consultations or cosmetic procedures, reducing the need for intermediaries and minimizing disputes over billing.
Smart contracts also improve transparency and trust by embedding compliance requirements directly into each transaction. Although implementing this technology may require an initial investment in expertise and infrastructure, the long-term benefits of automation and reliability make it a worthwhile endeavor for forward-thinking dermatology practices.
A Simple Roadmap to Cryptocurrency Integration
Practices seeking to implement cryptocurrency payments should consult with financial professionals well-versed in this space. However, the basic steps are as follows:
- Train your staff. Educate team members on the process of handling cryptocurrency payments and utilizing the payment platform’s tools effectively.
- Select a reputable cryptocurrency exchange. Open an account on a trusted platform, such as Coinbase or Binance, to manage cryptocurrency transactions securely.
- Set up a payment gateway. Implement a cryptocurrency payment gateway to facilitate patient payments. These platforms act as intermediaries, ensuring transactions are processed safely while mitigating price volatility by temporarily locking in exchange rates.
- Decide on a retention strategy. After payments are received, determine whether to hold cryptocurrency payments as digital assets or convert them immediately to fiat currency.
- Store digital assets. The practice owner should periodically transfer all digital assets away from a digital exchange, and payments should be stored in an offline storage platform (known as a cold wallet) to prevent cybersecurity breaches.
Selecting the Right Digital Currencies
Not all cryptocurrencies are created equal. To start, dermatology practices should consider accepting well-established options such as Bitcoin, Ethereum, or US Dollar Coin. Bitcoin and Ethereum are the highest-value and most widely accepted cryptocurrencies, whereas US Dollar Coin’s value is pegged to the US dollar, reducing concerns about market volatility. Educating patients on these options will help build confidence in the system and streamline adoption.
It is essential to ensure that patients understand potential risks, such as value changes in the cryptocurrency they use for payment. Having extensive informed consent documentation is critical. For example, patients may have bought Bitcoin for $50,000, only to see its value increase to $100,000 a few hours after they have paid for a procedure using this currency. Patients may be understandably frustrated in these situations; it is imperative that practices obtain consent from patients before conducting payments in cryptocurrency and ensure patients understand the potential risks and benefits of this price volatility. After all, it is possible that the value of Bitcoin suddenly drops to $25,000 within a few hours of the transaction, effectively providing the patient with a 50% discount. This clarity will protect both the practice and its patients from misunderstandings.
A Future-Ready Approach for Dermatology
Although cryptocurrency payments are unlikely to replace traditional models entirely, offering this option can help practices stand out, especially in a competitive market focused on cosmetic and elective procedures. Along the way, we can also ensure that patients receive medical care irrespective of their national origin. By adopting cryptocurrency, dermatologists can appeal to tech-savvy patients and those engaged in medical tourism, reduce transaction fees and improve profit margins, and optimize certain operations through blockchain-based solutions like smart contracts. Cryptocurrency is not just a payment innovation; it is a step toward positioning dermatology at the forefront of medical innovation.
Aamir Hussain is a dermatologist in Northern Virginia.
Disclosure: The author reports no relevant financial relationships.
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