Digital Currency Will Pay It (Forward)


Maybe you’ve heard of this thing called bitcoin or cryptocurrency. … And maybe you’ve wondered whether you should care and why or even when. After all, the movie theater still takes your credit card, the cafe accepts your phone’s payment app, and you can still pay cash for the protein drink you grab on your way out of the gym.

But the iPhone is about 10 years old, mobile payment systems (think Apple Pay, launched in 2014) and apps have gained significant traction, and even contactless cards—first introduced in the U.K. in 2007—are making their way to the U.S. digital currency. Cryptocurrency is evolving, too, and impacting many industries, not just finance. In fact, the health-care industry is one of the early adopters. Here are a few basics on the digital currency world and some ways you might encounter it in the months ahead.

The fundamentals


What is it? Digital currency is a software code used as a form of currency that’s transacted electronically. There are no tangible bills or coins. There are digital assets, also known as digital coins and digital tokens. These terms are sometimes used interchangeably, which can be confusing. Coins are traded on an exchange, like currencies between countries. Tokens may or may not be traded on an exchange. Like checks, tokens have intrinsic value, but you have to take them to the bank before the currency exchange window will “cash” it in. Whether coins or tokens, there is a calculated economic model, called tokenomics, supporting the system of interactions.

What are some examples of coins and tokens? CoinMarketCap provides a bird’s-eye view of all cryptocurrencies in the global realm that are traded on an exchange. You may have heard of bitcoin, but there are more than 1,600 coins, and that number grows weekly. They fluctuate significantly in value, just as different countries’ currencies fluctuate. There is not a registered list of tokens out there, but they are easy enough to find when looking up companies that are going through an initial coin offering (ICO). TokenMarket hosts a number of projects looking to be listed or funded in the future.

How do coins and tokens work? Coins are used just like standard cash. The exchange process is not yet as simple as swiping a credit card. However, over time, as the industry continues to evolve and mature, it should become more streamlined. Tokens are different: They can be earned through a host of different achievements based on the company that is offering them. That’s one phenomenon happening in the health-care sector.

From barter to bitcoin


While the U.S. economy has been supported by the dollar since 1792, Meriwether Lewis, William Clark and Sacagawea bartered with goods and services. Rebecca Burn-Callander wrote a fun article and infographic—“The History of Money: From Barter to Bitcoin”—looking at the evolution of currency. Credit cards are swiped and transacted in milliseconds today, but in the mid-1940s when the first credit cards—called Charg-It cards—were invented, most people didn’t carry multiple plastic cards with 16-digit identifier codes in their wallets. It took a while to build trust that they worked, just as it took time for people to believe that a check—a piece of paper with an amount written on it—would, in fact, be backed up by the amount at face value.

Digital currency faces similar challenges. As with anything new, perception and technology either speed up or slow down the adoption rate. The pioneers who invented digital currency looked beyond the functional system we have today (which works fine) to identify inefficiencies and also ways to make transaction processing faster and safer, as well give users more control over their own data. While calling it “crypto” currency (crypto means hidden or secret) might have been intended to suggest the protection of data, it’s a term that hasn’t inspired confidence or adoption, so the industry is shifting to referring to it as digital currency.

The underpinning of digital currency transactions is a technology called blockchain, also known as distributed ledger technology. The technology and data are decentralized. Simply put, this means your data (not just financial data) is not locked up in one place for people or organizations to manipulate, corrupt or expose. You, the user, gain greater control over your personal data, and transactions of any kind are faster and more secure. When you imagine the internet with faster access, cheaper transaction costs, safer security and more data privacy, it’s easy to see why the technology industry continues to develop blockchain and digital currency, despite the ups and downs of bitcoin’s price.

Digital currency in the health industry


There are two ways digital currency is impacting the health industry right now. First, health-care-related companies are creating their own tokens. These are typically integrated into a health and wellness rewards-based ecosystem for consumers to use. For example, users have fitness and wellness goals that are archived and verified through a means of devices, usually wearables. When you achieve your goals, you earn tokens. These tokens can then be used as digital currency within the company’s ecosystem to purchase products and services like personal training classes, fitness classes, wellness activities or other health-enhancing products and services.

Digital currency technology advances also are impacting the notion of community. Blockchain provides users with faster, safer access to contribute to, engage and connect with their community, whether they are coming together to create competitions, share videos or blogs, or inspire one another through achievements. As people continue to integrate and share their health stats, there is opportunity for closer integration with data collection and synergy with insurance companies. However, in contrast to the current paradigm in which the provider owns and can monetize the data (think, Facebook or Google), blockchain will empower users to determine whether they sell their data or maintain anonymity.

Here are some examples of digital currency’s inroads into health, wellness and sports:

Although we might still be in the “dial-up” phase of blockchain technology, the relatively fast adoption of mobile payment processing might make the idea of digital currency one that’s easy for us to embrace. And companies around the world will be ready to help us spend it.

Video credit: lucadp, Adobe StockPhoto credit: balloon111, Thinkstock; kvkirillov, Thinkstock; Youngoldman, Thinkstock