In an age when technological advancements are redefining every profession, dentistry isn’t untouched. Artificial intelligence (AI), digital radiography, teledentistry, and intraoral scanners are just a few examples. But beyond dentistry-specific technology, there’s a financial revolution that every dentist—in fact, every professional—should be aware of: Bitcoin.
What is Bitcoin?
Bitcoin is a digital currency that operates without a central authority or single administrator. Instead, it allows users to send money directly to each other through its own peer-to-peer network. This network uses cryptography to verify transactions, which are then recorded on a public digital ledger known as a blockchain.
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Functions of money
To understand Bitcoin, it’s important to understand money. Money serves several key functions and has some specific properties:
Medium of exchange: Money facilitates transactions by providing a universally accepted asset. Bitcoin, accepted globally, fills this role, cutting across traditional banking barriers.
Store of value: Money retains value over time, allowing individuals to save for the future. With its limited supply, Bitcoin can potentially be an excellent store of value, similar to gold.
Unit of account: Prices of goods and services are represented in terms of money, giving it a standard metric. Bitcoin’s increasing adoption makes it a growing metric for digital transactions.
Properties of money
Durability: Money should withstand wear and tear. Physical currencies, such as paper bills, have a life span, while digital ones don’t degrade.
Portability: Money should be easily transported. Coins and notes have been handy, but digital currency takes portability to a new dimension. Imagine trying to transport large amounts of gold!
Divisibility: Money should be easily divided. Just as a dollar can be broken down into cents, one Bitcoin can be split into 100 million smaller units called satoshis.
Fungibility: Every unit of money should be the same as every other unit. Every Bitcoin holds the same value as every other Bitcoin.
Limited supply: To maintain its value, money should be somewhat scarce. Bitcoin is capped at 21 million coins, ensuring a fixed supply. Compare this to the current monetary supply which has no upper limit.
Acceptability: People must accept money for it to have value. More and more merchants and individuals accept Bitcoin.
Bitcoin: digital gold
For centuries, gold has been a trusted store of value. Its scarcity, luster, and nonreactivity have made it a preferred asset. But in the digital age, Bitcoin is frequently referred to as “digital gold.” Here’s why:
Scarcity: Just as there’s a finite amount of gold on Earth, there’s a cap on Bitcoin—21 million coins.
Decentralization: Gold isn’t governed by a single entity or country, and similarly, Bitcoin operates on a decentralized network, free from governmental controls.
Store of value: Historically, in times of economic uncertainty, people flock to gold to preserve wealth. Bitcoin, with its noncorrelation to traditional financial markets, offers a similar haven in the digital world.
Portability: While gold is heavy and challenging to transport, Bitcoin can be sent anywhere globally with an internet connection, making cross-border transfers seamless.
Why should we care?
Global payments: Bitcoin can make transactions quicker and often cheaper, eliminating traditional banking and conversion fees.
Investment: Diversification is the key to a balanced investment portfolio. Including digital assets like Bitcoin can potentially hedge against inflation or economic downturns.
Future preparedness: As more patients become familiar with and begin to use cryptocurrencies, offering payment options in Bitcoin can make your dental practice more inclusive and tech-forward.
Bitcoin, with its unique properties aligning closely with the fundamental aspects of money, is reshaping the financial landscape. While its comparison to gold offers a touchpoint to its potential as a store of value, its digital nature gives it unparalleled advantages in a connected world.
For dental professionals, understanding and embracing Bitcoin not only offers novel financial avenues, but can position a practice at the forefront of modern, patient-centric services.
Just as we’ve embraced technology in treatments and patient management, it may be time to do the same with money.
Editor's note: This article appeared in the November 2023 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.
Ryan Wilson, DDS, is a general dental practitioner with more than 20 years of experience. He graduated with a degree in biology from Alma College before attending the University of Detroit Mercy Dental School. Alongside his wife, also a dentist, he serves the Rockford, Michigan, community with dedication and clinical excellence. When he’s not practicing dentistry, Dr. Wilson enjoys outdoor activities with his wife, son, and two dogs. Contact him at [email protected].
