In this article, Natasha Schön from the wonderful THX team examines the current Dutch and German blockchain ecosystems and discusses what kind of light this may shine on upcoming developments in the Blockchain industry.
(Link to original article: https://medium.com/thxprotocol/mapping-the-dutch-and-german-blockchain-ecosystems-e4b45fbfe296)
“When we say that blockchain has begun to level out, don’t get us wrong. It’s not that the blockchain hype is over — far from it.
But there’s been a noticeable change: instead of approaching it as the be-all, end-all, we’re seeing realistic solutions that update and improve already existing systems … some of which we use every day.
Europe, in particular, has been investing in the adoption of blockchain and appears to be driving much of the current blockchain developments. We know this due to the sheer amount of Blockchain organizations and partnerships (over 1,500 and counting) that have popped up in Europe to encourage collaboration and adoption.
This push does not necessarily come from the European governments; it’s truly a grassroots movement and is driven forward by the many communities that have sprung up.
This is especially true for The Netherlands and Germany.
These two European ecosystems are smaller than the U.S., which has more funded blockchain companies than the UK, China, and Singapore combined, and somewhat smaller than various countries in Asia like Singapore, who only has a handful more startups than Germany and The Netherlands. Despite the size differences, there’s huge innovative potential stemming from these two small European countries due to the many communities and the collaboration between them.
We know that it’s hard to pinpoint blockchain developments to one geographical ecosystem since legal entities, organizations, and origin stories are spread over many different locations.
But we think it’s important to 1) have a birds-eye view of these two ecosystems (especially since they are related to THX, our own blockchain company), and 2) what these developments say about the short-term future of blockchain.
A brief overview of two blockchain ecosystems
The blockchain ecosystem in The Netherlands
The Dutch mentality to innovate can be traced back to the Dutch stock exchange when various Dutch stakeholders chose to come together, rather than compete, to fight against a common enemy: rising water levels.
— Inspired by Rudolf van Ee, the founder of Blockchain Netherlands (BCNL)
Being a country that’s always been focused on innovation, its no wonder that it experiences a broad interest from residents (430% increase in the number of Dutch people who had invested in cryptocurrencies between Oct 2017 and Feb 2018 according to Forbes). This has largely influenced how the ecosystem looks today.
Here are three major characteristics of the Dutch ecosystem today:
A growing, collaborative culture
The Dutch blockchain ecosystem currently hosts over 300 companies. There’s no surprise why: the Dutch market has a solid digital and physical infrastructure for projects, companies, and organizations. And when we say solid we mean + 7,500 startups, + 400 venture capitalists funds, and + 85 accelerators and incubators (more information can be found on TechLeap).
It’s amazing how much innovation can fit into one, tiny country!
This passion has resulted in a culture where companies learn from each other, leading to a number of meetings, hackathons, training sessions, and courses relating to blockchain.
A cooperative ‘cross-sector’ environment
The passion for blockchain is also apparent in the rising number of government-supported blockchain pilot projects, new prototypes, project implementations, and international partnerships. Companies from all sectors work together on projects related to blockchain (see the Dutch Blockchain Coalition for more information).
Due to the steep rise in interest, it’s becoming increasingly professional since there’s more focus on information security and governance. For example, VNG Realisatie created a practical blockchain applications guide for governments.
The number of startups is leveling off
Currently, the number of startups in The Netherlands is withdrawing. According to Bart Mol, Satoshi Radio’s Host, and a local blockchain expert, the Dutch ecosystem is not necessarily growing at the moment. This isn’t actually a bad thing. Instead of starting new projects, startups are more focused on developing and applying their blockchain solutions.
It will also provide the government with some breathing space. Many have been asking whether the Dutch regulation legislation can keep up with the boom. In fact, according to a report by the Library Of Congress, the Dutch government has been struggling to keep up with regulations and has concerns over predatory behavior.
The blockchain ecosystem in Germany
The blockchain startups in Berlin form a unique community of support. During the steep rise in ICOs in2017/2018, you could find aa lot of startups helping each other by revising white papers, exchanging ideas, and providing invaluable feedback.” — Inspired by Ricardo Garcia, the founder of BerChain.
Germany is often whispered as the birthplace of Ethereum. It’s long been a hot spot for blockchain companies to set up shop, due to unique state support, innovation opportunities, and essentially, the largely affordable living cost for expats.
Here are three major characteristics of the German ecosystem today:
A high number of startups
When you consider the high number of blockchain startups it attracts, we can only expect more innovation to stem from this ecosystem. There are currently 178 startups, meaning it has the second-highest number of startups in the EU (around 8%) — mostly all located in Berlin.
According to The Global Startup Ecosystem Report 2020, Berlin’s startup ecosystem has a value of over $33 billion and is among the top 15 cities in the world for funding opportunities.
A largely ‘grassroots’ ecosystem
Germany caused a lot of hype in the blockchain scene when its government released a blockchain strategy for adoption, innovation, and legislation. Despite these steps, the ecosystem is largely driven by the rising number of startups, with a few key global players registering in Berlin; Centrifuge, Bitwala, Naga, Neufund, and more. Here’s a larger list of key players in Germany.
The rapid increase in startups may be leveling off, as it has in The Netherlands, as startups look for wider, global teams.
A collaborative environment
There’s a diverse range of talent in Berlin, which has resulted in the rich ecosystem we observe today. It’s characterized by many crypto and blockchain meetups that jointly solve problems and often lead to — you guessed it — increased innovation.
The small players in Germany are looking to work more with large businesses and governments. For example, over 40 financial institutions in Germany have declared their interest to offer cryptocurrency services to customers. This comes shortly after a law was passed that allows banks to offer such services after obtaining a license from BaFin. This is especially favorable for financial blockchain startups Solaris and Bitwala.
Simon Schwerin of KILT Protocol further remarks that “…[m]any blockchain companies are also starting to work together with regulators to help innovate regulation itself, which is an exciting step for a country as large and traditional as Germany”.
[Stay tuned for our follow-up articles that will dive a bit deeper into the advantages of both Dutch and the German ecosystems for blockchain startups.]
Striking similarities between ecosystems
You might have noticed several striking similarities between these two major ecosystems in Europe. We have too.
- Firstly, the collaboration between projects is key. Amsterdam and Berlin have become popular hot spots for startups, resulting in an enormously collaborative culture. This can only be positive moving forward. Only a strong, thriving network can help both ecosystems fully realize their potential.
- Secondly, there’s an increased focus on regulations. Based on our research, 2019 was the year of understanding the roles and positions of regulators in both The Netherlands and Germany. This essentially makes blockchain a much more approachable industry: startups have clearer definitions for how they can proceed and investors are provided more protection.
Some of these regulations, such as the Anti-Money Laundering Directive 5 (AMDL5), may become a hurdle for early-stage companies.
Although there are some doubts about the regulations, they seem to be a necessary evil for the industry to mature and reach a more mainstream audience.
How has the COVID-19 affected these ecosystems?
These characteristics make us wonder: how will 2020 kick off the next decade of opportunity for blockchain? What about COVID-19? Has that affected the slow but steady progress that’s been made in the blockchain industry?
According to the IDC, blockchain spending will slow-down around the world (to $4.3 billion) due to COVID-19. However, like all other technology investments, spending on blockchain projects will recover, and “perhaps sooner than legacy projects”, according to James Wester, Research Director for Worldwide Blockchain Strategies. This is due to the transparency, decentralization, and redundancy that the technology offers.
Furthermore, blockchain has become a form of saving grace for some companies. Those that have adopted blockchain early on have been able to harness the technology positively in the first months of the pandemic to, for example, manage supply chains or manage medical data verifications.
So, if you’re like us and are mid-way through a blockchain project, it might just be a matter of time until interest takes off again — and that the industry will keep developing positively.”
Link to original article: https://medium.com/thxprotocol/mapping-the-dutch-and-german-blockchain-ecosystems-e4b45fbfe296
More info about THX Project: https://www.thxprotocol.com/
// ABOUT BCNL FOUNDATION //
BCNL is thé community for blockchain, crypto and DLT startups and scale-ups in the Netherlands.