Blockchain in Healthcare – The „Future Workshop“ by Jens Spahn

The Federal Ministry of Health is looking for meaningful applications for blockchain technology. Federal Health Minister Jens Spahn launched an ideas competition at the end of October. Participants can still submit their proposals until 10 December on how the new technology can improve the German healthcare system.

One of the most legendary quotes from former chancellor Helmut Schmidt is that those who have visions should go to the doctor. Anyone with visions of how to revolutionise doctor visits can turn to Federal Health Minister Jens Spahn (CDU). With an ideas competition, the Federal Ministry of Health is looking for blockchain-based concepts to make the German healthcare system fit for the future.

The Bitcoin revolution task is kept very open:

„Solutions are sought for applications in the German healthcare system“. As examples of potential areas of application for the Bitcoin revolution blockchain, the Ministry mentions to onlinebetrug legal and identity management, declarations of consent and the organ and tissue donation register.

„Blockchain: […] Everyone is talking about it – but it is often difficult to find concrete applications, especially beyond Bitcoin“,

Spahn said in the announcement video for the ideas competition, in which he calls on (adult) individuals, teams, universities, start-ups, companies – in short: anyone involved in blockchain technology – to support the Ministry in this search.

Participants can submit their proposals to an independent, interdisciplinary panel of experts by 10 December. The experts will then evaluate the concepts according to their relevance for the German healthcare system, their sustainability, interoperability and data security. The best projects will receive an invitation to the Ministry’s „Future Workshop“ on 27 February 2019. There, the winners of the preselection can present their projects to the panel of experts, which then selects the winners. The winners will receive prize money totalling 30,000 euros. The first prize will be 15,000 euros, the second and third prizes 10,000 and 5,000 euros respectively. The closing date for entries is 10 December 2018.

Sparse details on the Future Bitcoin revolution Workshop

Further details about the „Zukunftswerkstatt“ are not yet known. „Information will follow“ is the title of the corresponding FAQ under the item „What happens at the Bitcoin revolution Future Workshop? In June, Spahn was still sceptical about blockchain technology, but recognized the need for action in the area of digitizing the healthcare system: „We have to move faster than before,“ he stated at the Cube Tech Fair in Berlin.

There was „a lot of talk and few concrete applications,“ Spahn said at the time. A step towards concrete applications has already been taken with the announcement of the Zukunftswerkstatt. However, it is not without a certain irony if one mocks oneself about the sluggish blockchain adaptation on the one hand and on the other hand does not provide more detailed information about the „Future Workshop“ program even after just one month.

Index fund for crypto currencies: Better investment than Bitcoins?

Willy Woo, the New Zealander who has been financing various start-ups for 15 years, is enthusiastic about the new possibilities of crypto currencies. In his contribution, he deals with the question of whether crypto currency index funds could beat Bitcoin.

Woo simulated investments in Altcoins to examine their developments over time. This could be used to determine whether an investment in the general fund of crypto currencies would make more sense as a passive investment strategy than direct Bitcoin trading.

Explanation: Index funds are passive investment strategies that invest passively in an entire market. An index fund on the S&P 500, for example, would buy all S&P 500 shares. The opposite of index funds are actively managed funds in which managers make decisions about which investments to buy and which investments to sell.

The Bitcoin secret

For his study about the Bitcoin secret, Woo simulated the investments from October 2013 until today, i.e. over a period of three years. Read more about it on

The very long observation period for crypto currencies is particularly interesting because the bubble from 2013 and the bear market from 2014/15 were also taken into account.

Woo invested fictitiously in the ten most important crypto currencies for the study. Every 30 days he updated the list of crypto currencies, included additions and did not look at other currencies any further.

The result of cryptosoft

Woo played through various cryptosoft scenarios in which he included different Altcoins in the fictitious fund. Overview of the cryptosoft results:

Bitcoin vs. Top 10 Altcoins (measured by market capitalisation share)
Bitcoins outperformed the Altcoin portfolio by a factor of 3.8. Woo attributes this to the very divergent market sentiment: While the Altcoins even performed much better in the 2013 bubble, they lost enormously as a result and fell significantly below the portfolio result.

Bitcoin vs. Top 20 Altcoins (measured by share of market capitalisation)
Had the 20 strongest Altcoins been included in the portfolio, Woo says that their performance would have been almost identical.

Bitcoin vs. Top 11-20 Altcoins (measured by market capitalisation share)
Those who had selected the Altcoins with the highest market capitalisation in places eleven to 21 could be pleased about a significantly better result after the simulation: While the profit ratio of the Top 10 or Top 20 Altcoins was about 4.6 (BTC) to 1.2 (Altcoin), this strategy achieved a result of 4.6 (BTC) to 3.6 (Altcoin).

The idea behind this strategy is to look at Altcoins with particular growth potential and remove them from the portfolio as soon as they have passed the growth phase and are among the ten largest.

Woo considered this portfolio to be particularly promising because it was able to hold its own in the bear market and generated strong profits in the bull market. In the end, however, the Bitcoin investment won.

Bitcoin vs. Top 20 Altcoins, capped (investments by market capitalisation share)
Woo has also created another portfolio from the Top20 Altcoins, with the currencies being bought pro rata according to their share of the total market capitalisation. At the same time, one coin may account for a maximum of 25% of the investment, thus avoiding centralisation.

The result was significantly worse than that of the other strategies: 0.82 (Altcoin) to 4.6 (BTC) was the figure at the end of the simulation.

Bitcoin vs. Top 20 Altcoins (equal shares)
In order to achieve broader diversification, this strategy looked at the top 20 Altcoins, each with the same share of the total investment. The result, however, marks the taillight: with 0.64 (Altcoin) to 4.6 (Bitcoin), this was by far the worst result.

Summary: Is the Bitcoin unbeatable?
After his investment simulation, Woo comes to the conclusion that it is difficult to beat the Bitcoin with index funds. With the current situation on the Altcoin market, this is almost impossible, because the Bitcoin is siginificantly underperformed and the portfolio of several Altcoins is much more volatile.

He also criticizes the hypes in the world of crypto currencies: Many startups are strongly overestimated and shitcoins are overestimated. While there are strict regulations for IPOs, the issuing of an old coin is not really tied to special regulations. However, according to Woo, we will see many crypto investments in 2017. It would make more sense to use a fund strategy, he explains, despite the above results.

EU ministerial meeting in Vienna – Belgian think-tank Bruegel advises common set of rules

On Friday and Saturday, 7 and 8 September, the EU finance ministers will meet for an informal meeting in Vienna. Among other things, the legal handling of crypto currencies will be on the agenda. The Belgian think tank Bruegel is now calling on the ministers to push ahead with the joint regulation of the cryptosector. They could, for example, target mining farms or trading platforms in order to dispel misgivings about tax evasion and money laundering in the crypto-currency environment.

However, there is no immediate pressure to act against the Bitcoin loophole

If the EU finance ministers weigh up the opportunities and risks of Bitcoin loophole this weekend at their first meeting under the Austrian Council Presidency in Vienna, the Belgian think tank Bruegel advises the ministers to adopt a clear position in a consultation document. Read about it here:

There was a need for common standards and a common set of rules for the crypto trade and initial coin offerings (ICOs). This clear message emerges from a consultation paper for ministers, which is available to Reuters.

The document states that it is „impossible“ these days to regulate crypto currencies such as Bitcoin itself. But the control of activities in this sector is possible, for example, through stricter rules or even bans on mining farms. Asian countries, for example, which pursue similar strategies, could have achieved great successes.

As has already happened in China, mining farms could be banned by the news spy

Furthermore, European legislators could in future target stock exchanges and trading platforms in order to gain more control and an overview of the news spy. As the document further states, such supervision could become necessary especially in light of the planned settlement of the news spy Chinese cryptory Binance in Malta.

At present, however, the ball is in the court of the respective ministers. The stock exchange control is still subject to the official authority of the member states. Existing European initiatives such as the Anti-Money Laundering Directive are unlikely to take effect until 2020.

VAT and Bitcoin: The Ministry of Economic Affairs takes a position

As a representative of the Federal Government, the Ministry of Economic Affairs has filed a petition concerning a case pending before the European Court of Justice. Therein the Federal Government refers regarding a future turnover taxation of Bitcoin purchase and sales for the first time a clear position. The Federal association Bitcoin e.V. received from David Hedqvist insight into the documents. We publish the submission and allow ourselves a comment.

Background of the Bitcoin revolution

Swedish Bitcoin entrepreneur David Helqvist intended to buy and sell Bitcoins commercially. In order to clarify whether he would have to charge VAT on the fee he charged to his users in addition to the purchase price of the Bitcoin revolution, he made a binding request to the local tax authorities. In the course of the proceedings, the Swedish judges responsible for the question asked the European Court of Justice for a fundamental answer on this controversial and new issue. In addition to the question of the VAT status of the fee imposed on Mr Helqvist, they raised the question of the treatment of the Bitcoin revolution purchase and sale of Bitcoins as such.

At the European level, it has by no means yet been clarified whether Bitcoins may go from hand to hand like normal money without paying turnover tax. Should it come to the application of the value added tax on the purchase and sales of Bitcoins, the consequences for Bitcoin users in Europe would be serious. A trader who allows himself to be paid in Bitcoins first pays VAT on his service or product to the tax office. As soon as he then sells the Bitcoins or buys new goods with them, he would again be liable to VAT. Paying with Bitcoins would almost double the value added tax. Bitcoin as a means of payment would therefore be very difficult or even impossible to use in a regular business operation in Europe.

Contents of the Bitcoin loophole

In its reply, the Federal Government rejects all attempts to apply the existing laws analogously to turnover with Bitcoin. It does not consider the exceptions for securities, bonds or money applicable. The submission gives the impression that the responsible employees of the Ministry of Economic Affairs have worked with a focus on legal Bitcoin loophole details and underestimate the political significance of such a regulation.

Bitcoin no money
First, they exclude the comparability of Bitcoin with money. Point 31 is particularly interesting:

In the case of legal tender, the state uses its sovereign task to determine and organise the currency of the state within the monetary constitution and to prescribe it as a means of payment.

Money in the sense of the Ministry of Economic Affairs is only what the state declares as such in its sovereign task.

Bitcoin no claim
The Ministry of Economic Affairs also excludes the definition of Bitcoin as a requirement. According to the exact wording of the law, this is perfectly understandable. However, Bitcoins are de facto treated as a claim, albeit not against a third party, but against a decentralised network. The „ownership“ of Bitcoins is nothing other than the demand against the network to be allowed to send a certain number of Bitcoins within the network to any address at any time. No special creativity is required to recognise the similarity of Bitcoin to the financial instruments listed under letter d..

Bitcoin not a security
The Federal Government rejects an exemption from value added tax in accordance with letter f. This is what point 53 states:

On the contrary, Bitcoins are a virtual exchange unit which enables a person to purchase goods or services offered in Bitcoin. …] Bitcoins are therefore not primarily directed towards a payment in cash, but towards a contribution in kind.

The definition of an alleged „intended use“ of Bitcoin is a creative construct of the Federal Government. Bitcoin was invented and defined without any purpose and can be used by any user as he sees fit. Whether they are buying goods or services, speculating or simply saving money, all these uses are at least equally possible with Bitcoin. Bitcoin is used de facto just like money.