Crypto capital and Blockchain business hub
What's special about the Berlin blockchain community?
“In the last 2 years, the number of blockchain companies that are incorporated or have a presence in Berlin almost doubled. It’s a city that has perfect conditions to become a global blockchain hotspot,” – Ricardo Garcia, Co-Founder of BerChain
Coined the “Bitcoin Capital of Europe” by The Guardian back in 2013, Joseph Lubin, co-founder of Ethereum and Founder of Consensys, called Berlin in 2019 “one of the most important cities for crypto and blockchain”. The revolutionary technology has reached even the political ranks: In summer 2019 the German Government has adopted a federal blockchain strategy with the goal of making use of the opportunities offered by blockchain technology, and mobilize its potential for digital transformation.
For this article we collaborated with Ricardo Garcia, Co-founder and Vice President at BerChain, a central player in the Berlin Blockchain community, for some first-hand insights. For him the federal blockchain strategy is great step forward. “On the one hand, it signals to startups that the government is interested in investing and betting on the technology. On the other hand, it is also a signal to other countries that Germany is open for collaboration for blockchain applications,” he says.
As a non-profit association, BerChain has the mission to connect and promote the Berlin blockchain community and to strengthen Berlin as the global blockchain capital. When it comes to the German Blockchain ecosystem, Berlin already comes out on top. A recent study done by the Expert Commission for Research and Innovation (EFI) revealed that almost 50% of German blockchain startups are based in Berlin. Their 2019 Report on Research, Innovation and Technological Performance in Germany states that "according to experts, this concentration of development activity makes Germany, and Berlin, in particular, a location of international importance for blockchain technologies".
When it comes to the German blockchain ecosystem, Berlin already comes out on top, with more than half of the German startups involved in the technology headquartered in the capital. The Directory of European Blockchain Startups lists a total of 716 startups in Europe, 115 of them in Berlin, most of them also included in the startup map by the Berlin Senate Department for Economics, Energy and Public Enterprises.
From crypto hype to business solution
Blockchain is expected to change our society and economy and many German companies agree: a representative Bitkom-survey showed every seventh company (15 percent) has a high opinion of Blockchain. Garcia also regards 2019 as the year of enterprise blockchains, where “countless large multinationals, such as Unilever, Carrefour, Deutsche Bahn, Shell, ING, Deutsche Telekom, LVMH, Nestlé and many more have announced projects they are working on which involve the usage of blockchain. There has been a lot of progress in education with regards to Blockchain and its application.”
The most prominent use cases for the application of Blockchain in Berlin can be found in the energy industry for energy trading, or energy origin tracking, in decentralized identities for online services or in the internet of things. Berlin’s flagship, however, remains the development of core blockchain infrastructure and protocols. “There are a few globally highly recognized projects that are working on deep technical infrastructure problems,” Garcia states.
Why start a Blockchain business in Berlin?
While Brexit seems to also accelerate the startup influx, Berlin’s USP as a blockchain hotspot is that a lot of the development activity is happening right here. “Berlin is all about technology and development, less about speculation,” Garcia explains. In addition, he identifies five reasons that contribute to this attraction:
Low costs of living, compared to other Blockchain hubs, such as New York City, San Francisco or London
Easier access to talent, especially well-trained and affordable developers and other digital and technical professionals.
- Existing startup ecosystem and infrastructure, due to its legacy as an e-commerce and fintech hotspot. The established start-up infrastructure with access to investors, co-working spaces and more significantly facilitates setting up and funding a company in Berlin
- Open attitude toward internationals, just like a true melting pot. No matter if you are from Italy, India, Russia, South East Asia or the US – it’s easy to start a life in Berlin.
- A rebellious and artistic spirit, that attracts people that want to do things different and have new ideas. The nature of the blockchain movement was also started by a community with revolutionary ideas, which fits very well with the spirit of Berlin.
Due to the high regulatory thresholds in Germany concerning data security and the digital storage of information, blockchain companies are using Berlin as a kind of benchmark for success: If their application survives in this ecosystem, it will most likely do so anywhere else.
A fast expanding scene of Blockchain events
Whether you're a savvy investor or simply interested in learning more about this pivotal technology, there are a plethora of blockchain conferences, blockchain networking events and meetups happening around Berlin.
Blockchain Week Berlin, probably the most prominent format, is a decentralized community-organized initiative, committed to reducing the noise from the market, with education at its forefront in order to push mass adoption.
For smaller events and regular meetups, you should also definitely check out Eventbrite or Meetup. The German Blockchain Association (Bundesblock), an association promoting the technology in Germany, can also be a valuable touchpoint. It represents the interests of all companies trying out and advancing new business models and social development based on blockchain technology in Germany.
Apart from designated events, you may encounter like-minded Blockchain enthusiasts in the coworking spaces primalbase and fullnode as well as at the Factory Berlin, which also hosts a few Berlin Blockchain companies. Or pay a visit to Room77, a legendary bar in Berlin’s crypto-scene, where you can pay with Bitcoins and talk about your blockchain visons over a cold beer. Europe’s leading energy blockchain summit EventHorizon is also hosted in Berlin.
Current trends and challenges
One of the main trends to be seen in the industry, is that more and more applications have grown out of the development stage and and have graduated into extended pilot or production roll-outs.
“A blockchain solution is only valuable, if someone uses it for something meaningful,” says Garcia, “therefore, many projects are investing into working with enterprises and startups to get them to use their solutions.”
Tech for social good is another growing movement in the industry and Positive Blockchain is creating a real impact by believing in the power of blockchain technologies to generate positive social impact through innovation and humanitarianism. They are creating new models for change, advancing knowledge and helping to solve the world’s most pressing challenges. Positive Blockchain also curates a meetup called Blockchain for Social Good Berlin.
Overall, the strict regulation in Germany, especially in the fintech, energy and mobility industry, remain to slow down use cases i.e. because they still require information to be kept on paper. Another challenge is the hesitancy of some German corporates to make the first move with the adaption of Blockchain and lastly there are still struggles within the community that need to be overcome in order to increase the collaboration between all sub-communities and ecosystems as well as the connection between startups, corporates, investors, academia and politicians. “But this is why we founded BerChain.” Ricardo Garcia explains.
Nevertheless, the Blockchain strategy by the federal government is a big step forward. “We have already experienced first requests from other European governments to connect with the German blockchain ecosystem due to the blockchain strategy. This will open up new opportunities for investments in Germany and for international collaborations,” Garcia says, “we are all interested to see, how the implementation of the strategy will play out.”
If you want to learn more about blockchain in Berlin, the person to talk to is Sascha Dobratz from the economic development agency Berlin Partner. He will be happy to help you with any questions you may have.
About BerChain: BerChain is a non-profit association with the mission to connect and promote the Berlin blockchain community to strengthen Berlin as the global blockchain capital. It is member-led organization that strives to bring different stakeholders in Berlin together in formats such as networking events, working groups, workshops and more. Berchain aims at making the ecosystem more visible and connected to ensure that Berlin can maintain its position as an attractive location for blockchain companies. It’s a combination of large corporates such as Innogy and Deutsche Telekom, blockchain protocols such as Aeternity, co-working spaces such as Factory Berlin and many different startups.