First Blythe Masters, Now Goldman Investing In Bitcoin

When Bitcoin first appeared, its proponents valiantly claimed that the revolutionary new digital currency was nothing more than a modernized version of a legacy non-fiat currency such as gold or silver, one which would allow global transactions seamlessly and without tracking by monetary authorities, but one which was more convenient than gold as one would never actually have to hold it – the “bitcoin” could be stored safely in virtual vaults that could be accessed anywhere in the world. Most importantly, it would be a libertarian statement of non-compliance with the fiat status quo.

Then MtGox happened and “unexpectedly” thousands of Bitcoin users found out they had been corzined, and their digital “money” – which supposedly was traceable – had disappeared forever.

Of course, fraud happens, so this humiliating incident to what was once the biggest bitcoin exchange was promptly brushed off.

But when a little over a month ago we reported that none other than former head of JPM’s commodities head, (JPM) Blythe Master, had reemerged from the shadows as chief executive of the Bitcoin startup Digital Asset Holdings, then all those who valiantly clung to the belief that Bitcoin is some aspiration to a libertarian, anti-status quo contrarianism, were promptly quieted.

As the FT reported then, the startup aims to be a venue for buyers and sellers of financial assets to meet and transact, switching currencies into bitcoin in order to cut the cost and time of settlement and make use of the decentralised “block chain” as a secure record of transactions.”

“There is a school of libertarian ‘visionaries’ who want to imagine a world without big banks, big governments,” said Ms Masters, who left JPMorgan last April. “That’s nice, but completely irrelevant to this business model. We don’t imagine a world in which big banks and big governments don’t exist.”

“They say they want the world to change, but the world will change by adopting new technology to do a better job,” she said. Reducing the frictional costs of financial transactions is “one of the great challenges of our time”.