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, in 2019 called Berlin “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 adopted a federal blockchain strategy with the goal of making use of the opportunities offered by blockchain technology and mobilizing its potential for digital transformation.
We asked 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, 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, 114 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 concur. A representative Bitkom-survey in 2021 showed that fifty-nine percent agree with the statement that blockchain technology is one of the most important technologies of the future. 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 announced projects which involve the usage of blockchain. There has been a lot of progress in education with regards to blockchain and its application.”
Berlin is one of the first states to put a pilot project into practice. Berlin students will be able to receive their report cards digitally as early as the beginning of 2022. This will be made possible by an innovative blockchain project of the Berlin administration (SenWeb, SenBJF), which was awarded a prestigious administration prize by the capital in October 2021.
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?
Berlin’s USP as a blockchain hotspot is that a lot of 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 Berlin’s legacy as an e-commerce and fintech hotspot. The established start-up infrastructure with access to investors, co-working spaces, and more, all significantly facilitates setting up and funding a company in Berlin
- Open attitude toward internationals. 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 who want to do things differently and have new ideas. The blockchain movement was 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.
After the big success in 2020, Berlin Partner for Business and Technology teamed up once more with BerChain to organize Blockchain in Use Conference 2021. A five day online conference with five new verticals around latest blockchain use cases.
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 space Full Node or 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.
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.”
Many industries today consider blockchain as a helpful tool to improve their processes. Industries such as supply chain, healthcare, energy, IoT or AI indicate that cross-technology blockchain solutions are growing.
In 2021, Decentralized Finance, Non-Fungible Tokens (NFT) and Self Sovereign Identity will be the most promising use cases from a technology perspective.
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, strict regulation in Germany, especially in the fintech, energy and mobility industry, does slow down use cases, particularly because information is still required 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 collaboration between all sub-communities and ecosystems as well as enhance 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.
Learn more about use cases made in Berlin
The range of Berlin companies and motivated teams is large, colorful, and diverse. This exciting scene is presented here in regular portraits, interviews and videos.
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.
Header image: iStock - NicoElNino