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Blockchain Startups in Germany

Modern Berlin has always been an uber hip place to hang out - at least after the tearing down of the Berlin Wall in 1989. Once the artificial separation of the East and West parts of the city was removed, this once and future vibrant center of Europe drew artists, thinkers, writers, and hipsters from near and far. It should come as no surprise that when a burger joint began taking Bitcoin as payment for food back in 2011, the smell of money drew the odd bedfellows of lefty entrepreneurs and right leaning venture capitalists to scope out the blockchain startup scene.

Modern Berlin has always been an uber hip place to hang out - at least after the tearing down of the Berlin Wall in 1989. Once the artificial separation of the East and West parts of the city was removed, this once and future vibrant center of Europe drew artists, thinkers, writers, and hipsters from near and far. It should come as no surprise that when a burger joint began taking Bitcoin as payment for food back in 2011, the smell of money drew the odd bedfellows of lefty entrepreneurs and right leaning venture capitalists to scope out the blockchain startup scene.

Basic Blockchain

When the individual or collective (no one knows for sure) known as Satoshi Nakamoto dropped the first cryptocurrency - Bitcoin, in 2009 - on the world, few realized the real game-changer in the equation was the underlying decentralized foundation on which it was built, known as blockchain technology. Fast forward a few years and European nations are just starting to realize how big this thing might become. Germany is no exception. In the short time since Bitcoin arrived, the number of cryptocurrencies in circulation have grown from one to more than 1,500.

Bitcoin timeline

The second most popular blockchain-based cryptocurrency, Ethereum, is actually much more than a place to conduct daily transactions. Conceived from the beginning by founder Vitalik Buterin as a platform that developers could use to build their own applications, even currencies, it was the Ethereum blockchain that really opened Berliners' eyes to the spectrum of possibilities.

Building Blockchains in Berlin

While it's difficult to pin down a particular geographic area as more advanced than another in the blockchain world, the rise of the Ethereum platform hooked a solid cross-section of the twenty-something and thirty-something crowd in the city and gave them a new focus. Here was a platform every bit as interesting and potentially lucrative as when the internet itself came to town. Not since those heady days has a technology gotten so many people so excited.

Berlin - ICO Town?

Remember back not so long ago when the techies in Silicon Valley in California were bringing IPO (initial public offering) opportunities to market as a way to raise cash for their brash, new, and sometimes successful ideas? We're seeing history repeat itself with today's ICO (initial coin offering).

ICO

Perhaps the fastest ways to a million bucks is to create your own cryptocurrency and hold an ICO on Ethereum. More than one blockchain entrepreneur has used this method to push a business idea out to the masses and watch the Euros roll in as startup capital. This is where the venture capitalists belly up to the table.

The cool thing about this is that creating a blockchain application is not all about simply putting another cryptocurrency on the market. Anything the human mind can conceive, you can bet someone is in the stage of developing it thanks to the concept of smart contracts. What's a smart contract?

The Smartest Contract Ever

Here's the cool part about blockchain as manufactured in Germany's best-known city on any given day. The use of so-called smart contracts in combination with tokens that go far beyond the relative simplicity of monetary transactions allow the the creation of a variety of capitalistic endeavors.

Smart Contract Audit

The two parties to a smart contract include 1) the startup service or product and 2) the person using the product or service via ownership of what is called a token. This is known as tokenizing the blockchain, though you could also say it was helping monetize the blockchain far beyond the boundaries of simple transactional work that Bitcoin mapped out.

Berlin vs the World

Presently, the Berlin blockchain community boasts serious competitors in the following industries:

  • Payment/Wallet/Exchange Services
  • Internet of Things / Energy
  • Financial Technology
  • App Development Technology
  • Database
  • IP/Identification

It's clear from a quick search of other first world cosmopolitan cities that Berlin is not at the top of the food chain in blockchain apps yet. Both London and New York have two to three times the activity judged by eyeballing the number of active websites related to blockchain technology. Whether or not Germany, in general, and Berlin, in particular, can climb into the big leagues remains to be seen. A lot depends upon how warmly government agencies and regulators embrace the ideas that seem to fly out of creators' heads at roughly the speed of light.

Final Thoughts

If we had to pick a blockchain industry that's leading the pack, it would be energy. Several exciting applications in this field like Share&Charge and Conjoule are doing interesting things. Additionally, there are quite a few Germans working locally on blockchain projects that happen to be headquartered elsewhere. Applying the old ideas of national boundaries to an increasingly interconnected world is tough. The thing to keep in mind is that, when it comes to the German blockchain startup scene, there's enough going on to make things interesting. Whether or not it will ever reach a full-blown Silicon Valleyesque boil remains to be seen.

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