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Cryptocurrencies could be catching on

March 15, 2018
by Tom Valentino, Senior Editor
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As more providers weigh the merits of going in-network, one residential inpatient facility in Rockville, Utah, is exploring a modern—and somewhat financially risky—way to expand access for potential clients.

The Retreat at Zion has begun accepting the digital currency known as Bitcoin as a form of payment for services. The treatment center, which opened its doors in 2013, also accepts self-pay and most insurance plans and works with religious organizations, communities and families to provide scholarships.

“Any form of payment—whether it’s Bitcoin, insurance, self-pay or someone handing us the title to a car because it’s the only thing they have and they want to be in treatment—we have a fiduciary responsibility to work with whatever they have,” says Robert Beatty, the center’s founder and executive director.

Beatty says he has been studying Bitcoin for the past three years and was skeptical that it was a fad or scam. The cryptocurrency, first made available in 2009, once was a preferred form of payment for transactions in criminal activity because it lacks a central authority—a defining trait of traditional currency. With Bitcoin’s exploding popularity, though, law enforcement agencies have begun to more closely scrutinize the digital currency.

Today, it is gaining more acceptance among reputable businesses, from brick-and-mortar jewelers to online retailers to moving companies, with more popping up regularly on directories such as SpendBitcoins and CoinMap. Seeing companies in other industries making the leap, Beatty says he was finally convinced it was worth a shot for the Retreat at Zion.

After announcing it would begin accepting Bitcoin in early 2018, the treatment center recently began working with its first client paying with the cryptocurrency.

“It’s our loss if it doesn’t work, but we’re going to try this,” Beatty says.

The biggest risk for the Retreat at Zion is found in the volatility of Bitcoin. The currency’s value has fluctuated wildly in recent months. After topping out at an all-time high of $19,783 per coin on Dec. 17, 2017, its value plummeted to below $6,000 by the first week of February 2018. It then nearly doubled to $11,555 three weeks later.

“You have this volatility, but we’re primarily concerned with the level and continuum of care for someone who wants to be in a residential treatment program,” Beatty says.

The next currency

While the Retreat at Zion dips its toe into the world of digital currency by accepting Bitcoin, the Sober Network, a provider of digital solutions for the addiction treatment industry, is venturing into even deeper waters by attempting to launch a currency of its own.

Sober Network founder and president Harold Jonas, PhD, LMHC, CAP, launched the project in December 2017 with the idea that individuals in recovery could earn Sobercoin digital currency by completing various tasks within an ecosystem established by Sober Network, and then use the coins to purchase health or recovery services. Among the ways users will be able to earn coins:

  • Signing up for the program and downloading a digital wallet that holds the currency;
  • Using the company’s Sobersystems recovery app; and
  • Completing surveys on the individual’s demographic information and substance use history.

Data from the surveys will be used to validate users’ reports of commitment to sobriety and for analysis to enhance treatment interventions, Jonas says, adding that data will also be uploaded to third-party firms for additional use. Users are anonymized and identified only by email.

“In layman’s terms, we’re buying that information and rewarding people with Sobercoins,” Jonas says.

In time, Jonas says he hopes to get treatment centers onboard with accepting Sobercoin and its ecosystem, or helping them to develop their own ecosystem and using cryptocurrency as a rewards model. His company has begun reaching out to providers already accepting cryptocurrencies.

Jonas and his team are working toward strengthening the Sobercoin ecosystem to create “a valid and credible digital currency” that can eventually be traded on cryptocurrency exchanges. The company has not yet rolled out an initial coin offering (ICO), an alternative form of crowdfunding for digital currencies.

Reaching that point could prove challenging.

According to Bitcoin.com, of the 902 ICOs tracked by the cryptocurrency data analysis site TokenData in 2017, 142 failed before raising funds, 276 failed after raising funds, and 113 have “semi-failed,” as their communities have withered away. In total, 59% of the ICOs tracked in 2017 failed to some degree with total funding of the failed projects at $233 million.

What’s more, Google this week announced it would no longer allow cryptocurrency-related ads on its platforms starting in June, stemming from regulators’ concerns over the risks of fraud. The move follows similar action from Facebook. Together, the two tech giants control an estimated 73% of the online advertising market.

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