In Venezuela, I Used Bitcoin to Pay for the Birth of My SonBy José Rafael Peña Gholam
CARACAS — On September 30 my first son, Adrián, was born in Caracas, Venezuela. Thanks to my hard work and my savings in Bitcoin I managed to pay, in one day, all of the medical costs for the birth of my child. In the midst of the economic crisis roiling my country, Adrián was born in a decent private clinic in the Venezuelan capital.
Living in Venezuela has pushed me to find ways to protect myself. One option is Bitcoin, which I wrote about previously. For the past two years I have received my entire salary in Bitcoin. I am fully aware of Bitcoin’s volatility but it still feels much safer than the hyperinflated Venezuelan Bolivar (VES). To give you an idea, in January of 2019 a café con leche cost 450 VES. By September, that same coffee was 14,000 VES, according to this Bloomberg index.
From the moment I knew I was going to be a dad, I started thinking about was how much it would cost to get decent treatment for my wife and baby. A few years ago a private clinic would cost somewhere between USD $500 and $700. In the private clinic that we ended up using, you couldn’t give birth for under USD $1500, and a Cesarean cost $2500.
It’s worth noting that this private clinic is among the least expensive. I’ve heard of clinics in Caracas where it costs up to USD $6000 for a Cesarean. The minimum wage in Venezuela is currently 300,000 VES, or around USD $16 a month.
Perhaps you are wondering: Why am I talking about US dollars when I live in Venezuela? Because here, most businesses price their goods and services in dollars in order to protect themselves from hyperinflation. Then you can pay in bolivars using the VES/USD exchange rate of the day, or directly in dollars if you have them. I could have put my savings in dollars, not Bitcoin, but over the past few years, Bitcoin has also offered significant returns.
Imagine, for example, that I only had VES. It’s quite possible that due to hyperinflation, today’s medical costs in VES would have exceeded my savings.
So if I didn’t have Bitcoin, what would have happened to my wife and child? The best option would have been a public maternity hospital that is dedicated to the care of mothers and babies. These places are saturated with patients, with little personal attention and an insufficient budget for supplies.
I’ve heard stories about the conditions in these maternity hospitals. Some employees at these public hospitals apparently earn low wages, leading to few capable employees. This can lead to a lack of care or even mistreatment of women in labor. I’ve also heard of women going into labor that lasts days, during which time they are left alone with their baby, or of exhausted women dropping their babies from the bed.
There was no way I was going to let my wife be treated in this way.
Of course, selling Bitcoin to make large payments comes with risks. I know this because the week that my son was born, the price of one Bitcoin fell from USD $10,000 to USD $8,200. It is extremely frustrating to see that kind of market movement eat into your savings.
That week was not easy for me. I watched the price go down and didn’t know if I should exchange into a stablecoin to protect myself from another drop, or just do nothing and hope that Bitcoin’s price would rebound before September 30, when I had to pay for the birth of my son.
I chose to wait. Unfortunately, the price of Bitcoin did not return to USD $10,000 that week. I thus took a loss and paid the clinic bill at an exchange rate of USD $8200 for 1 BTC.
I traded my BTC for bolivars on LocalBitcoins.com, a popular website that matches buyers and sellers. The night before my son was born I transferred the BTC to LocalBitcoins, which has an escrow service, hoping that my transfer would be confirmed by the time I arrived at the clinic. I chose to trade with the person who offered the best price, used the same bank as me and had a good reputation on the platform. This person had an IP address in Singapore but a phone number registered in Venezuela, just one of those strange things that you see on LocalBitcoins.
At least for me, it is easier to get Bitcoins than dollars. On LocalBitcoins I just choose the best offer, make the trade, and then wait for confirmation that the transfer went through. I can receive Bitcoin without even leaving my office.
Getting dollars is a different story. I would have to announce to my circle of friends and family on Whatsapp or Instagram that I was interested in buying. If I found someone willing to sell, we’d have to negotiate the exchange rate and then agree on a location to hand over the cash, while I transferred the VES.
In the case of my son’s birth, the exchange of BTC into bolivars went through the morning that my wife began giving birth. This was a very risky move on my part. I was aware of all the obstacles that could prevent me from paying the clinic on time, and so I was nervous during the entire process.
I feared that the person who initiated the trade would not respond or worse, that my bank would block the transfer for being a suspiciously large sum of money. My counterparty sent six transfers of different amounts from four bank accounts from the same bank, probably to avoid the blockage of any one transfer.
After I received my bolivars, I proceeded to pay the clinic. I did it in two bank transfers, with no problems. After I completed the last transfer, the relief and joy that I felt was completely surpassed by the first moment that I saw my son. All the burdens of paying the clinic vanished in an instant. Still, I was proud and happy to have paid the costs of his birth in my own way, using Bitcoin.
I have to admit that it wasn’t easy to part with most of my Bitcoin savings. I didn’t want to do it, but it was more important to provide a safe birth for my son and decent treatment for his mother.
I’ve written that Bitcoin will not save Venezuela, and I still believe that. But telling this story has made me realize how important Bitcoin has been in my own life. It has allowed me to fight Venezuela’s hyperinflation, to amass some savings, and to pay large sums of money in a matter of hours, without having to actually travel anywhere. Imagine what it would take to sell that quantity in gold, for example.
I often see people on social media saying that Bitcoin has no real use besides market speculation. In countries without serious economic problems, perhaps that is true. But countries like Venezuela, where the economy is dysfunctional, showcase Bitcoin’s greatest potential. The story of my son’s birth is an illustration of that.