Germany has opened its doors to the wave of new technology startups in Europe, and Berlin is quietly becoming the crypto capital of the continent. While regulations have played a role in this level of adoption, the ethos of the city falls right in line with that of cryptocurrencies and blockchain technology. To bring this identity to a point, the first ever Blockchain Visionnaire Summit (BVS) brought together some of the local sector’s brightest minds to talk about the in’s and out’s of a potential “Web 3.0.”
The Difference between Features and Flaws
BTCManager moderated the opening panel, “The Pros and Cons of Ethereum and Other Platforms,” and led the discussion along the ups and downs of current networks. To better frame this, panelists included points regarding scalability, the importance of clear use cases, and why private and public blockchains can (and should) be good friends in the years to come. Speakers included Artiona Bogo (SAP), Dimitri De Jonghe (Ocean Protocol), Yuri Lobintsev (Cindicator), Mikko Alasaarela (Inbot), Rhian Lewis (Ethereum developer), Sebastian Gajek (Weeve), and Samuel Martinet (computer science researcher at Imperial College London).
BTCManager fields questions on how to think about interoperability, private blockchains, and scalability.
When thinking of how the negative aspects of a blockchain can define its function, the principle example is Bitcoin. As it is both slow and secure, many have called it (for better or for worse) “digital gold.” It is clear, however, that this is a legitimate use case. In the modern era, the digital equivalent of just about anything makes things like NFTs highly interesting, and more importantly, only really possible using some form of distributed ledger technology (DLT). In the case of IOTA, according to Samuel Martinet, their platform is much different and “scalability is a huge focus.”
The extensive connections needed to sponsor a growing network of mobile devices is far different from Ethereum’s proposal to be the “world’s computer.” This distinction, though, isn’t necessarily a bad thing, nor does it ever need to be formally answered. When asked about a future in which one blockchain rules them all, Sebastian Gajek of Weeve responded in the full support of interoperable solutions that allow multiple chains to coexist.
Similarly, but from a slightly different viewpoint, Artiona Bogo explained how enterprise-ready blockchain solutions, like those offered by SAP, will also be built to serve the specific needs of their clients. In the case of manufacturing medicines, scalability may not be necessary, as operations of this nature aren’t nearly as abundant as operations involving transactions of value. Other examples include logistics and the secure tracking of raw materials between source and destination.
Unfortunately, the bottlenecking that faces the industry is a serious point of contention, and it’s one that sees no real solution without the application of some sort of centralization. Contextually, the speed at which these technologies can possibly operate also falls into the same category as mass adoption. The companies that can solve the first will also enjoy the benefits of the second. Mikko Alasaarela of Inbot made the point that, realistically, the only companies who are getting around scalability issues are those that have some feature of centralization. The Coinbases of the industry have taken advantage of the value that cryptocurrencies generate, but instead of solving the issues outright, they have placed themselves at the threshold of the problem itself.
These kinds of realizations pose existential hurdles for anyone working in the space. If the only way towards decentralization is via centralized business models, what are we all doing? Rhian Lewis, a journalist turned Ethereum developer, described things more optimistically. There will be tradeoffs in this business but that doesn’t negate the whole industry. From this we come full circle; in deciding between two of three properties (decentralization, security, and scalability), blockchains (for now) will approach their use cases accordingly. In the future, all the digital golds, technologies focusing on IoT, and blockchains hoping to move data of all sorts will each find their respective blockchain based on specific demands.
Looking Closely at Mass Adoption
The full use of blockchain technologies and cryptocurrencies may rest more in the hands of the dreamers than those hoping to solve modern day problems. That is to say, that rather than hoping to address climate change, interesting alternatives, such as tokenized carbon credits, may be one way in which we can understand how adoption might pan out. Still, Yuri Lobinstev of Cindicator did outline three specific obstacles that need to happen before the crypto space reaches the promised land.
First, the technology is in need of a significant upgrade. Whether that be scalability, reducing transaction fees, or grokking the implications of this next wave of internet protocols, the space is clearly in its infancy. Applying the model of this-is-like-the-internet-in-1994 plants this problem in a convenient metaphor. Second, blockchain technology and cryptocurrencies are facing real hurdles in the way of regulation, but strangely this is also turning out to be a massive opportunity for places like Singapore, Malta, the Cayman Islands, and all these self-proclaimed “Crypto Valleys.”
The final obstacle was User Interface (UI), which is talked about only on a retail level, but, according to Dimitri De Jonghe of Ocean Protocol, we also need to consider developer-facing UI. Until developers hammer out the infrastructure on which Coinbase’s disruptors can be built, we may be looking at a much longer trajectory (think this-is-the-internet-1976). Regarding mass adoption, De Jonghe put it thusly, “Your mother doesn’t need to be able to read a smart contract, she just needs to be able to interact with one.”
All things considered, how the hell did bitcoin get adopted so quickly? First-mover advantage, of course, but also the rise of a sovereign digital currency arrived at a time when the cultural Zeitgeist demanded it. The problems facing society, even pre-2008, have, in many ways been turned on their head thanks to the cryptographic implications of such a far-reaching technology. From monies, logistics, arts, music, exchanges, land leases, and a laundry list of other industries, all represent companies with skin in this game. If not, they may predictably be ousted very soon.
Berlin’s Blockchain Romance
Highlighting the reasons for the city’s strategic location in the space, Pavel Romenko spoke on behalf of Blockchain Circle, a media firm that represents projects like The Hundert, Berlin Valley, and Venture Daily, among others. He began with the history of Berlin’s formation, which was 59 distinct villages that all merged into the canton of Berlin. “It is the original decentralized city,” he said.
Venture firms like Blue Yard Capital and Outlier Ventures, coupled with a rich startup scene and corporate backing, make Berlin an ideal breeding ground. As many other emerging technologies are also actively being built upon in the city, Romenko was quick to mention the convergence factor:
“Blockchain will be the gatekeeper for how we understand data and its use.”
Berlin offers a triple threat of ingredients to fuel the next wave of technology.
The city is currently playing host to a number of projects that are now beginning to enter a global market. Interestingly, Room 77, a bar in Kreuzberg, was the first brick-and-mortar store to ever accept bitcoin according to its owner, Jörg Platzer. Later, they would be the first to receive a Lightning Network payment. This is also part of the reason why conference co-founder Anastasia Chernikova finds the Berlin scene exciting:
“I’m based in New York and involved in the blockchain ecosystem there, so I definitely can consider how different Berlin’s scene is. It’s much more about developing companies and less about raising capital. Meetups and conferences in Berlin are mostly for developers, less for entrepreneurs or investors. Berlin is sometimes called the Crypto-capital, and I think it has huge potential. Room77, based in Berlin, was the first ever bar that started accepting crypto. The other day, I walked by a vintage store where you can buy anything with crypto too. That says something profound about how crypto is not just for those on the cutting edge, but for normal people.”
Berlin’s Crypto Scene
Finally, in commenting on the success of the conference and the location, Chernikova pointed out the difficult task of curating quality content and omitting certain members of the ICO space:
“With so many blockchain conferences all over the world, many of them exist only to support ICO projects and make money. As a result, those programs end up being just a cascade of companies pitching their products. We focused on companies with long-term plans – most of the founders we presented I knew directly, or I got recommendations from people I trust.”
Although it’s too early to say, the event served as a stark reminder of two things. Namely, the crypto space is nascent, volatile, and facing many serious problems. Behind the scenes, however, are serious teams hoping to see their projects to an end that may not have a quantifiable dollar figure.
In the second, Berlin is offering the perfect home for dreamers. In comparison to other hubs for the technology, Germany’s stance on crypto regulations, along with cheaper housing costs, make this a highly attractive location to help solve the Internet’s greatest flaws.
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