Andre Achtstaetter ADT podcast cover
Episode: 51

Andre Achtstaetter - Cryptocurrency & NFTs

Posted on: 17 Mar 2022
Andre Achtstaetter ADT podcast cover

Andre Achtstaetter is co-COO at adorsys, an integration and technology partner that supports banks, financial service providers and FinTechs in creating new digital services in the open finance sector.

In this episode, we take a deep dive into two related digital trends which have been gaining a lot of traction recently – cryptocurrency and NFTs. We talk more generally about blockchain and decentralized technologies, before going more in depth about the use cases and the future potential of these two technologies.


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“When you look at the mobile phones, I mean, everybody's using it. So, blockchain, mobile phone – goes together. It's convenient. And the more convenient you are using blockchain, you can use it. And it's available anytime, anywhere at the palm of your hands.” 

Welcome to the Agile Digital Transformation podcast where we explore different aspects of digital transformation and digital experience with your host, Tim Butara, Content and Community manager at Agiledrop. 

Tim Butara: Hello, everyone. Thanks for tuning in. I'm joined today by Andre Achtstaetter, co-COO at adorsys, a finance focused IT consulting firm from Germany. Today we'll be tackling two trends that are becoming really popular these days, namely, we'll be discussing cryptocurrencies and NFTs, and we'll be taking a look at the future potential of these two technologies. Welcome, Andre. It's really great having you with us today, discussing this with you on the show. Would you like to add anything to my introduction or should we just go ahead with our questions? 

Andre Achtstaetter: First of all, thanks a lot for having me. And yeah, we could directly jump into the questions, but two sentences regarding myself, perhaps as an introduction. I have a fintech and a banking background and I basically served the banks and fintech in the board, in some positions as CEO, here now as co-COO where I shape the future of adorsys. And yes, please back to you regarding the questions that you would like to ask. 

Tim Butara: Yeah, I think that the topic is definitely a great one, definitely a hot one, definitely loads to talk about. But we always like to start with something basic. So maybe for those listeners who may not be as familiar with these two topics, can you maybe give us a brief definition or a kind of overview of crypto and NFTs, especially NFTs, since it's newer and hotter, and I think fewer people are familiar with them. 

Andre Achtstaetter: Sure. With pleasure. Look, for me, the topic of blockchain is an enabler, and we're basically looking at a transparent, decentralized technology which comes in the form of a peer-to-peer network. And I mean, what does it do? It basically records transactions, which might sound very simple, but there's no central authority, which is one of the major differences. There's the topic of verifiability and auditability that can change the game in industries and in businesses, as well as the intermediaries in most cases are cut out, just looking at the opportunities you have regarding cross border payments. 

The topic of confidentiality and integrity is also one we need to look at and the robustness of the network. Like, can it be hacked? How can it be hacked? Can the blockchain be changed? And this is something that makes this a technology that is very interesting for future businesses, for driving new markets. And this might also be one of the reasons why the finance industry is already looking at it. We look at the banking sector. I just mentioned cross border payments, but the insurance companies in the accounting and auditing firms are also looking at it because there are lots of opportunities there using this technology. 

We are at the beginning, but now building the bridge to the other technology or to the offspring of it, I would say, to the topic of NFTs or non-fungible tokens, we see that there's a lot of hype in the market, lots of money. But what is it actually? It's a unique digital value and it establishes the ownership. It basically reflects the owner's personality digitally. And yeah, this is by using several standards like the ERC 722, 721, sorry. I think when you look at the market, basically what you see is it can be traded. 

I'm always afraid when I look at newspapers and I see that they write about something. Same with stocks. When a newspaper in Germany writes about stocks, it means: go sell. So basically one of the topics is, you can trade it. And this makes it interesting because there's a lot of money in there, but there's a lot more to it in terms of use cases that I will share later on. But one example is for me the topics like Jack Dorsey's first tweet that was sold for $2.9 million. And this basically tells me– or Rolex art. Rolex art. 

When you look at Rolex art, a typical Rolex costs 10 K. When you go on and you click on Rolex art, you see that you find the Rolex art NFT for 10 ETH which corresponds to 30K to 40K based on the price. So it's basically times four the physical value. And this for me is something where I personally believe that when looking at NFTs in the future in the long run will be social currencies. 

I believe that in ten years we will sit together and while having a glass of wine in a bar, people will show each other the NFTs and they can verify if you really own it. If you have a public wallet, for example, and they can say, hey, he really owns this. And I think this will change and become a social currency. Definitely. 

Tim Butara: So maybe as a follow up question, what's the difference between– maybe this might be counterintuitive or totally unintuitive for someone who's not familiar with this, what's the difference between NFTs or like just having JPEG of an art saved on your computer or your phone or something like that? 

Andre Achtstaetter: Yeah, basically, look, the NFT is a unique digital value and basically it tells you on the blockchain that you're the owner. Very simple. And yes, I understand this is a typical question that comes, the JPEG question, if someone wants to copy it, can they do it? And I have to admit, I have one entrepreneur who is a friend of mine who is running an NFT project and he did it on Cardano. And while I was on the weekend cleansing through OpenSea, I saw his artwork and I was like okay. Why is it sold and minted on Ethereum? Because the project is on Cardano. 

So I told him that. And what he told me is, it's a scam. So he was sending directly in his Discord group a scam alert. So this is one of the challenges, I think, in the industry to avoid these because there will be people stealing and copying. But in the end, I think those projects who have the right followers, who are established, having the right business case, they will make a difference in the future. And in the long term view. 

Tim Butara: Yeah, I knew I had to ask this question. As you said, it's a pretty generic question. But exactly because it's generic and because these topics are so new, for somebody not familiar with them, that will probably be the first thing to pop into their heads. And if they don't get it answered, then they may as well just stop listening to us, right? 

So, yeah, definitely the fact that it's decentralized, that this confidentiality, the robustness that you pointed out are definitely reasons that these two technologies are so hot at the moment. Are there any other key reasons or elements of this? And can you tell us more about the possibilities that you think that they'll open up in the future? 

Andre Achtstaetter: Yeah, look, I think there's a lot coming with the reason of being more and more transparent. Transparency is key, I think, in this context. Why is there lots of money in the market? Because there are several use cases. And when you have such use cases, people want to try it out. And those who have the money are basically using it to create new industries. 

Let's look at use cases in detail. I mean, you have the collectibles industry. This is already there. And I personally believe that, as I said, it will become a social currency. But also looking at the payments industry, when you can cut out intermediaries and enable cross-border payments at different costs, different speed, that makes a huge difference for the customers, too. And this is one angle we will look at in the future, too, the music industry, where you can work with royalties. 

Same for art and fashion industry. I'm just discussing with friends who have art galleries. They're basically telling me, okay, I'm selling my photos or my pictures that I paint and then it's gone. With the use of NFTs, you can include royalties. So with every purchase, with every purchase, you earn something. And this can change industries forever. It's a new revenue stream for them, even if they don't think in revenue terms. But it changes the whole industry. 

Let's also look at education. You can tokenize licenses and certifications and sports. Look at the sports industry. When you issue tickets, why would you use paper and kill the rainforest? Yeah, there are discussions going on how green the minting of such NFTs is. But it's definitely one point to use NFTs when you issue tickets, so you basically have a digital value while holding the NFT, and on the secondary market, you might sell the ticket. I mean, I just imagine I would have been at a World Cup final and I would have the NFT still available and I could put it now on a marketplace.

With one of my former employers, I was visiting twice the Champions League final. I'm a football fan and a heavy Bayern-Munich fan, I hope this doesn't kill this call, but what I basically would like to have now, I would like to have the NFT, the ticket of the finals that I've visited, one in Lisbon, Real Madrid against Atletico. If I put this today on a secondary market, I would perhaps stop working. You never know. There might be a collector who's interested in paying me millions for this.

These are the opportunities. So not only in the field of gaming or playing, but in real life, these examples, they exist. This can even be in name, service and domains. And what I personally see is, apart from all these use cases, I think it's a key in the future to virtual worlds, because I had this surreal experience, because we’re, with adorsys, we're part of the Hanseatic Blockchain Institute. 

I had this experience that on one evening on a Monday, I was led through a soirée where basically we were looking at paintings, at NFTs, that were hanging in a virtual gallery and we could click on them and we could buy them. So basically, it changes the way– I mean, I lived two years in Paris and there I needed to go to the Louvre to attend such events. Right now, when you look at metaverses you're invited to a soirée, you have a glass of wine next to you, you look at paintings and you can buy them virtually, this changes the whole game. So basically, I personally believe, apart from all these use cases, social currency is key and the value it brings is tremendous. 

Tim Butara: But, yeah, it's very interesting that you mentioned the metaverse. I was just about to ask, obviously, we're headed towards this. I think that they're making really fast progress. And, I mean, it will not just be the social currency of the future for the real physical world, but it will probably be that much more important in the metaverse, where it will be THE currency, you won't be able to operate with anything else, probably.

Andre Achtstaetter: Yeah, definitely.

Tim Butara: So what about specifically in banking and finances? What kind of role is crypto playing there and what kind of potential does the NFT technology or the NFT industry have there? 

Andre Achtstaetter: Here you speak to the banker. I was ten years running a bank in more than seven countries, and I know the challenges the banking industry has. When looking at the technology. Being a banker, I'm more concerned about new competition. So the new competitors come into the market with lending protocols or where you can even save money. I think this is something a lot of banks don't have on the radar. Let me give you one concrete example, the Aave protocol. 

When I looked at the Aave protocol in January last year, a friend of mine brought me there, by the way, I saw that they had a book, let me call it book. The value on the landing protocol of 9 billion. They are today at 27 billion – times three. So basically, when you look at a normal midsize bank in Germany, would you say that a normal midsize bank in Germany would grow at such a rate, times three, in one year? Most probably not, because they need to keep risk under control and so on. 

So basically, this is something where I need to ask the banks, show me your development compared to new competition, because the more we move into the adoption phase, like, that you can even give credits on a blockchain, short term credits, for example, near prime credits. This might change the whole industry and the banks– I mean, I was running retail units in several countries. And the challenge basically what I had in the ten years where I was doing this was redesigning the business model. 

And we were more concerned with closing branches and optimizing the cost-income ratio rather than finding those business models that are basically changing the industry. And with protocols like Aave, there's a huge potential in there, and it might even replace banks in certain service areas. And there's one more thing to this. 

When you look at the mobile phones, I mean, everybody's using it. So, blockchain, mobile phone – goes together. It's convenient. And the more convenient you are using blockchain, you can use it. And it's available anytime, anywhere at the palm of your hands. I'm asking you, when was the time that your bank understood that they need to make a smart app or an app for you to use all the banking functions at the palm of your hands in a convenient way? This took time, right? Blockchain is already there. 

Tim Butara: Yes. And even once they realized it, it took a long time to get rid of all the bugs and all the challenges and all the obstacles – you know, you could do it, but every time I open the banking app on my phone, there's a new update or there's a new disclaimer or something like that. So I totally get what you're saying. 

And you mentioned adoption already. So can we talk more about this? What's the situation with adoption in these two industries? I mean, obviously, I think crypto is already more established. It's been around for a longer time. But what about NFTs? What's the situation with adoption of NFTs and what can be done to improve that? 

Andre Achtstaetter: Yeah, look, I mean, that is one of the major questions, basically, we need to ask ourselves right now because I think we're at the beginning because the adoption is not there yet, but you can pay some sports events, but you cannot go to your local club and pay with cryptocurrencies or NFTs. So basically this is something that might change in the future. But there will be projects that survive and there will be some projects that fail. 

I think the use cases that we need to look at is, for example, like I said in the banking industry, the cross-border payments. I mean for example Barclays invested in a company called Krowd which is a startup for trade finance. So they're actually transforming the global collection industry by having a global look at it and by digitizing invoices. So what's the target? I mean to enable SMEs more cash, to provide cash flow. And I think this is vital for each and every SME to grow. 

And now we're going back to the traditional lenders; somehow this is a business, even in the fintech space, that is not running as it could and this is the market to go to. But there are also other initiatives like digital identity structures on smart contracts that are basically financed by banks to understand the technology better. And I think this will be, now when I look specifically at the banking and finance industry, this will be the major driver, understanding technology and using it, executing on it, playing with it, and then making sure that the customer understands basically how to use it. I think this will be the key to make it as convenient as possible. 

Another example, I mean when you trade cryptocurrencies, let's just quickly move to the topic of cryptocurrencies because everyone is crazy about it. So there are exchanges that are not that easy to use. Then there are exchanges that basically explain you what you're investing in and there are items that you click on. They make your life easy so you don't need to type in a wallet address or something which is not convenient. So you get my point. I think it is about convenience and the convenience will decide how much we use it in our daily life. 

Tim Butara: But would you say that this convenience is specifically to how something is done or to the benefits that using this new thing will give you? 

Andre Achtstaetter: I think the benefit definitely needs to be there. But the more convenient it is, the more I can make sure that people use it. Just this topic of blockchain. When I speak to people right now, to my ex-colleagues in the bank, I sometimes understand that they know Bitcoin, they know Ethereum, but the technology is a different thing. And how to use this technology internally and externally with your customers, these benefits are not clear. I think there's a lot of work with workshops to help to show also the banks and insurance companies how this might transform their business even.

Tim Butara: So, can we now maybe talk more about the future? I know that we already started talking about some future potential or we took a look ahead and speculated on what these two technologies could look like and their adoption could look like in the future. Can we elaborate further on this and maybe take a look at short term versus long term future for crypto and NFTs? 

Andre Achtstaetter: Yeah, I mean, look, short term, I believe that there will be still hype, there will be ups and downs. I just heard yesterday, because I was making a project with some students and one student told me that her friends are basically betting all their savings on NFTs and they want to make money with it. So, yeah, they can be traded. This might be one of the ways to use it, but I think the technology, in the long run, then, will evolve and some projects will lead the way. What does that mean? I think not every project will survive. 

On the contrary, I believe that a lot of projects will fail, but this will pave the way for the successful projects because you learn from those failures. It reminds me a little bit of the time 25 years ago when the Internet started, and I think we're somewhere there. This can be compared. So we need a long-term view on it and understand in each and every industry what the impact is. Again, why would you issue tickets not using NFT technology for a World Cup or for a Champions League match? 

This is something– I mean, I can trade my cards now that I have from Lisbon or from Berlin 2015. I could have them on and I could sell them for, I mean, if someone pays 40K for Rolex art and the physical Rolex cost 10K, why wouldn't they pay me 200K for the Champions League ticket? And they say, hey, look, this is the Champions League ticket. I was there. That's the final in Lisbon. I was there. But this is the hype part. Yes, it's nice to sell it on the secondary market, but let's have a look at our kids. I have two kids and my small one, he likes Pokemon cards and he likes those football cards. So question to you. Did you collect Panini football cards? 

Tim Butara: No, but I did collect Pokemon cards. 

Andre Achtstaetter: Okay, excellent. So, look, I was a big fan of the Panini football cards where I had all the players and my market was the schoolyard, and there was always someone who was selling me those cards and I could sell him or we could trade it. I mean, today the market is global. It's a global market and it's not the schoolyard anymore. And I was trading cards there. So the opportunity, even for kids, is insane. Open markets, global markets, trading cards. 

So this for me, is one of the major benefits of such a technology, just looking at this particular sector. In the long run, now going to a more serious thing like auditing or banking, this will affect the industries because now in these industries, we talk about cost effectiveness and robustness of the system. So we're going back to what basically Blockchain brings. And there, there are several use cases that we need to look at, and I think this needs to be understood by those players in the markets. 

Tim Butara: I love that analogy with the schoolyard and now how the market has evolved and became a global market. And soon we will not just have one global market, but we'll have a physical global market and a digital global market in the Metaverse. I agree with you. Every point of our discussion today has a lot of potential in the future, right? Blockchain in general, then Ethereum based implementations, then Bitcoin based implementations, NFTs. I think that we could do three more episodes on similar topics, and we'd find unique insights and unique approaches for every one of those episodes. 

But I think that this is a great starting point for anybody listening right now who wants to learn more about this. And as a kind of final question for you, Andre, for our episode today, for those people in the audience who would maybe like to start making use of NFTs or cryptocurrency right now but aren't sure how to start, what would be your top tip of advice to them as to how they should approach it and what they should keep top of mind in order to be as successful as possible? 

Andre Achtstaetter: That's basically the hardest question. But look, it's about getting educated, and even considering to design your business on the blockchain. How could this be done? By using workshops to better understand the technology and in best case to even have a prototype. Look, I mean, I saw a lot of companies already in my life and I coached a lot of companies. And what I always advise is – have a prototype that you know how to use this. On a slide deck, it looks different; on a slide deck, everything is clear. Everybody knows what we're talking about. 

But in the end, you might totally miss out on what this could be doing for you and your business. So using something then in a prototype phase is something totally different and it feels even different. So this would be my advice. I would also look at how to assess how it affects the industry competition, where I'm in, my supplier, my customer, those who buy my products. And basically also, if it brings new competition. Like I said, with the Aave protocol, I mean, there might be competition that was not there before. And if I don't see them coming, I might disappear one day. 

So I would not advise to jump on the hype train, to invest and to do this and that, 100x, 1000x, what you see in the newspapers. I would say rather try to understand the technology and how you want to use it. And yeah, if you then in your free time want to invest in NFTs, feel free to do that, but understand what you invest in. So when we're now talking about the investment part, which is not financial advice, by the way, but I would say understand what you invest in. Look at projects and the possibilities they might have. 

Look, I'm also invested in crypto and I love reading those white papers. I fell in love a little bit with the idea of GRT, the graph protocol. This is something that I follow. Then there are other companies like 2key Network that might change the marketing in the long run. So I try to look at these projects in terms of when we look at the blockchain in terms of what does it mean for an industry or for a vertical and how could this evolve? And yes, you never know what happens. There might be regulation moving in, but these are the things that are basically making me interested in those projects because I can see how they could develop from a local to a European or even on a global scale. 

Tim Butara: I think these were some invaluable points of advice and some great points right here at the end, Andre, what a great way to finish our discussion for today. Just before we wrap everything up, if our listeners wanted to reach out to you or maybe learn more about you, what's the best way for them to reach you? 

Andre Achtstaetter: Please reach out to me on LinkedIn and I'm happy to have a call with you. I'm a heavy LinkedIn user. You'll find also my phone number there. Reach out and I'm happy to have a discussion with you about this topic. Thank you. 

Tim Butara: Well, Andre, this has been awesome. I really enjoyed our conversation for today. As I said, we could probably have a few more and maybe we'll have a talk about that and maybe we'll organize them. But for now, thank you so much. This is all from me. 

Andre Achtstaetter: Thank you very much. 

Tim Butara: Well, to our listeners. That's all for this episode. Have a great day, everyone, and stay safe. 

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