Blythe Masters, the Wall Street banker famous for being called “the woman who invented financial weapons of mass destruction” in regards to credit default swaps, a key misuse of which contributed greatly to the financial meltdown at the end of the last decade, has made yet another move in the cryptocurrency space.
The firm she heads, Digital Asset Holdings, has acquired two start-ups in the space the firm aims to reign in: HyperLedger and Bits of Proof. HyperLedger may seem familiar, as it has made headline after headline. The “distributed asset ledger” company did not focus solely on Bitcoin, or any cryptocurrency for that matter, but rather focused on the larger benefits that could be had from block chain technology. In essence, HyperLedger is very much what Masters and Co. are looking for in a block chain start-up: great minds without so much Bitcoin.
Bits of Proof is a company similar in spirit to Factom, in that it seeks to leverage the block chain in previously unfathomed ways, hiring out its technology services to partners worldwide. Together, these companies will now, presumably, provide the real backbone for Digital Asset Holdings future as a distributed ledger provider. There are billions of dollars to be had in this market, creating products for firms who’ve previously relied on ancient technologies which frequently contradict each other and themselves.
From the HyperLedger announcement about the acquisition:
Hyperledger’s technology enables financial institutions to create multiple private blockchains across a known group of participants. Unlike other distributed ledgers, Hyperledger does not have an inbuilt crypto-currency and uses a proven consensus algorithm capable of thousands of transactions per second.
This alone can explain why traditional moneychangers would be interested in acquiring HyperLedger. It doesn’t require Bitcoin to run.
As to Bits of Proof, it seems their biggest contribution will be on the server side of things, as in the press release it credits them with having deployed a server meant for block chain use in their pre-Digital Asset Holdings life. They were acquired privately previous to the acquisition of HyperLedger. Masters herself, who was later vindicated even by the media outlet who’d called her a “financial terrorist,” said about the new partnerships:
We build tools to help clients harness the power of distributed ledgers to serve their own customers. We integrate financial infrastructure with a variety of innovative new technologies inspired by the blockchain. Different ledger technologies serve different purposes and all of those we integrate with are additive.