Abid Hospital in Pakistan Accepts PakCoin Cryptocurrency
The Abid Hospital in Islamabad, Pakistan, has become the first hospital in Asia to accept payments in cryptocurrency. Patients get a 20% discount when they pay in Pakcoins.
Abid is a fairly new hospital, opened in January 2015. It is primarily a surgical facility and lists a staff of nine doctors. It accepts a limited number of charity cases.
While Bitcoin remains secure as the world’s leading cryptocurrency, it has become less suitable for some purposes than it used to be. It was the first of its kind, and its creator, the mysterious Satoshi Nakamoto, didn’t expect today’s widespread use. Transactions require confirmation for recipients to be sure they’ve been paid; otherwise, dishonest people could spend the same money twice. The time to complete confirmation has grown long, sometimes taking hours. The associated fees have grown large enough to discourage Bitcoin’s use for small payments.
Many alternative currencies have entered the competition, offering solutions to these problems. PakCoin is specifically aimed at Pakistanis, though it can be used anywhere. Up to 150,000 Pakistanis can get 50 Pakcoins (a very small amount at current exchange rates) for free. It claims “nearly instant transactions” and very low or zero processing fees. It’s derived from Litecoin, which was designed to handle higher transaction volumes than Bitcoin. Like Litecoin, it relies on an algorithm known as scrypt.
Pakcoin and Litecoin use the same blockchain concepts as Bitcoin. There are multiple copies of the ledger. New blocks are created by “mining,” which requires computational effort and is rewarded by newly created units of currency. The code is open source.
The advantages of cryptocurrency
An interview with the developer of Pakcoin (who goes by the name Pakcoin) discloses some of its purposes. A key goal is to make it usable for ordinary people who don’t know much about cryptocurrency or blockchains. Eventually people will be able to associate wallets with user names, so that they can accept payments at an address with a recognizable name.
Pakistan isn’t a wealthy country. The average annual income is about $1500 in US currency. Investment and savings are low. Only 15% of Pakistanis have bank accounts. Cryptocurrency can be a useful tool for people who don’t have bank accounts or credit cards. The challenges in Pakistan are strong; only about a quarter of the population has a mobile Internet connection. Smartphone adoption is growing fast, though, and could exceed 50% by 2020.
The risks
Cryptocurrency remains risky. Some currencies have collapsed when their development teams fell apart. People who put all their money into Pakcoin could get rich or lose everything.
Any new way of doing business opens up avenues for fraud, since most people don’t understand it in detail and can be tricked. If user names become a common way of designating wallets, spoofing of names will inevitably follow. Fraudulent exchanges will try to cheat people, taking money outright or misrepresenting market exchange rates.
The value of a cryptocurrency comes from its usefulness in exchange, and every organization that accepts payment in it adds to its legitimacy and stability. In some parts of the world, such as Pakistan, more people have cell phones than have bank accounts. Cryptocurrency payments stand a reasonable chance of being widely adopted, since they’re a more accessible option for a large part of the population.
Abid Hospital is small and new, but it might be the start of a trend. As more organizations adopt digital currency as a payment option, it will become more familiar, and the currency will stabilize. There are still many ways the scenario could go wrong, but it’s a trend worth watching.
