A 22-year Wall Street veteran who is now the CEO of a crypto bank told us how the 2008 global financial crisis led her to bitcoin — and breaks down where the real value of cryptocurrencies lies today
"I wasn't sophisticated enough back then to understand the counterparty risk I was taking on by leaving my coins in an exchange. And to me, that is the single cheapest tuition I've ever paid that I lost money in Mt. Gox," she said."I didn't put much in, but oh boy did I learn a valuable lesson when Mt. Gox went bust.
What bitcoin and its blockchain technology allow users to do is transmit money across the planet at the speed of light and get confirmations within a few minutes, ensure irreversibility in the sense that once a transaction goes on a public blockchain, it cannot be reversed, and it's programmable money and users can write software to program them.
"Those three features do not exist in fiat currency systems, so those three things matter," she said."And that's what's going to solve a lot of the settlement issues in traditional financial services." Long, who started her Wall Street career with Salomon Brothers and later held senior roles at Credit Suisse, knows the proverbial"market structure debt" within the financial and banking system all too well.
"We are stuck with this layered market structure where each intermediary has to process transactions in sequence, they can't do it simultaneously," she said."Because of these market structure issues that need to delay settlement, it creates counterparty risk and ties up capital. And one of the fundamental tenets of finance is if you can turn your capital more frequently, you increase your returns.
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