Digital Currency Startups Prosper in Berlin’s Vibrant Bitcoin Community
This is a guest post by Chris Grundy, a Berlin-based Bitcoin enthusiast who works at Bitbond.
Despite Germany’s recent negative press over the Greek bailout, Berlin remains one of the world’s greatest cities for Bitcoin lovers. Whether it’s the plethora of innovative bitcoin startups springing up all over the city, the widespread adoption of the cryptocurrency along Berlin’s high streets, or the vast amount of investment flooding into the German capital, Berlin’s relationship with Bitcoin will be instrumental in shaping its future.
Berlin startups have been enjoying an unprecedented level of investment. Indeed, “Die Welt” reported that Berlin overtook London in terms of Venture Capital Investment in 2014.
According to this report, the German capital enjoyed $2.2 billion in investment compared to London’s $1.5 billion, highlighting Berlin’s increasing suitability for promising startups to gain the funding they need to change the face of Bitcoin.
Recent political developments in Westminster might further add to Berlin’s appeal, as UK Prime Minister David Cameron “would like to see a ban on certain applications that allow users to send end-to-end encrypted messages to each other over the internet.” With catastrophic regulation potentially imminent in London, and New York’s BitLicence scaring off more and more Bitcoin companies, Berlin has a great opportunity to establish itself as the Bitcoin epicenter.
Berlin’s Bitcoin startups cover a wide range of specialities ranging from the use of blockchain to protect creative ownership online, to global P2P lending, to bitcoin mining supercomputers. Companies like ascribe.io, Bitbond, SatoshiPay and Coynoare using bitcoin technology to find game-changing solutions to traditional problems, while BitcoinBrothers and All4btc are improving bitcoins availability and usability on a global scale.
Drawing its philosophical roots from Muhammad Yunus’s Grameen Bank, Bitbondenables people from around the world to access business funding through the use of Bitcoin technology. With 800,000 EUR in funding, its P2P lending and investment model cuts out the banks, allowing investors to fund promising businesses on the other side of the globe at no cost. The need for bankless investing and lending is thrown into sharp relief in light of the 2 billion adults lacking access to banks, as recently reported by CNBC. Disintermediation allows access to working capital in the world’s financially underserved region, making lending and borrowing globally accessible. Recently, another Berlin-based startup, ascribe.io, has been garnering a lot of media attention, along with $2 million USD in seed funding from investors like Earlybird, Digital Currency Group and Freelands Ventures. CEO and Co-founder, Bruce Pon, describes ascribe as “a service for creators to protect their ideas and define how they want their ideas to spread.” With this inventive use of blockchain technology, creators can register, transfer and track their valuable digital creations, allowing them to discover where their work is being used.
Since the funding round, ascribe has been enjoying a growth rate of 10% per week. Its team of 14 is working toward allowing marketplaces to be built on top of their platform.
Also working on innovative blockchain solutions in Berlin are Satoshipay, a micropayment service for publishers, and Coyno, a user-friendly blockchain bookkeeper. Both came through the Axel Springer Plug & Play Accelerator earlier this year.
Like ascribe, Satoshipay’s goal is to help monetize content for its creators. Its prototype, which recently won second prize at the Coinbase BitHack, focuses on micropayments that allow content publishers to charge fractions of a cent. Founded by Meinhard Benn in 2014, the Berlin bitcoin startup envisions a world where content creators can monetise their work using nanopayments without scaring away consumers with cumbersome fees or subscriptions.
Coyno, on the other hand, aims to overcome the implicit tax reporting and bookkeeping difficulties inherent in bitcoin transactions in personal and professional settings. As co-founder Erasmus Hagen says, Coyno provides “a full and secure SaaS Bitcoin bookkeeping solution. Coyno offers easy-to-use wallet analytics and automatic bookkeeping, which enables private Bitcoin users to stay in control of their Bitcoin holdings.”
Bitcoin mining startup BitcoinBrothers, founded in 2013 by the Welle siblings, is building better, faster machines to make bitcoin mining cost-effective again. The Berlin-based startup offers mining services using its MSEM bitcoin mining supercomputers at over 6 petahash per second. BitcoinBrothers represents a fascinating new perspective on the scalability of one of Bitcoin’s most controversial topics.
While Greece’s former Minister of Finance Yanis Varoufakis has condemned Germany for its “absolutely impossible, totally non-viable and toxic” economic plan for Greece, Berlin-based All4BTC is allowing ordinary Greeks a way out of their fiduciary disaster. Specifically, All4BTC is a personal shopping service, that opens up every online store on the internet to bitcoin. For Greeks who are finding it increasingly difficult to gain access to their savings, All4BTC offers an alternative. Backed by the bitcoin incubator BitcoinsBerlin, the young startup has benefitted from the euro’s recent volatility, as an ever-increasing number of people in eastern and southern Europe turn to bitcoin when they find banks inaccessible.
Berlin’s attractiveness goes beyond the startup scene, government regulations and investment portfolios however. The Federal Association of Bitcoin, with its headquarters in the German capital, represents and fights for the Bitcoin community and Bitcoin businesses in Germany. Beyond that, Bitcoin businesses’ entrepreneurial spirit is merely an expression of the creative influence of the city. As Jason Fell’s insightful remark makes clear: “Berlin’s 3.5 million residents are creating a bright, new history for their city.” Berlin is itself a startup, and its citizens love bitcoin. The truth of this statement can be tasted in the beers of Room 77, heard in the EpicenterBitcoin podcasts, and seen in the eyes of the Bitcoin Meetupmembers.