Hank Paulson, former secretary of the U.S. Treasury, called it “an economic 9/11.”

Having loaded up on mortgage debt that went sour, then failed to find a savior in the government or private sector, the 158-year-old Wall Street investment bank Lehman Brothers filed for bankruptcy on Sept. 15, 2008.

The fallout over the following days, weeks and months would threaten to topple the entire financial system, necessitating trillions of dollars in rescue lending to banks and other firms by governments and central banks. The global financial system hadn’t looked more fragile at any point since 1929.

Worse, support for the system was undermined by the fact that Wall Street executives still collected multimillion-dollar bonuses – even as millions of the taxpayers, who helped fund those bonuses, lost their homes.

Within a couple of months of Lehman’s bankruptcy, though, a new piece of technology would debut – almost unnoticed – one that appeared to offer an alternative to this catastrophe-prone system. On October 31, 2008, an unidentified individual going by the name Satoshi Nakamoto published the bitcoin white paper to a cryptography mailing list.

The paper described “a purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution.”

Satoshi had almost certainly been working on the protocol for months or years prior to Lehman’s collapse but, according to Cornell computer science professor and blockchain researcher Emin Gun Sirer, there was a timely motive to the launch.

Sirer told CoinDesk:

“It’s very clear that Satoshi was affected by the events that led up to the financial crisis of 2008, and then it’s obviously recorded in the genesis block as well.”

Sirer is referring to the Times of London headline bitcoin’s creator pointedly inserted into the first bitcoin block ever mined, on Jan. 3, 2009: “Chancellor on brink of second bailout for banks.”

As awareness of bitcoin spread, different people saw different things in it, but for many, it represented an alternative to fiat currency issued by central banks (which had just fired up the proverbial printing presses again) and the fractional reserve banking system (which had nearly collapsed beneath a mountain of lending).

Most of all, it promised to bypass the financial institutions the crisis had cast such doubt on.

Laszlo Hanyecz, known as “Bitcoin Pizza Guy” for becoming the first person to use the cryptocurrency to purchase real-world goods (two pizzas for 10,000 BTC in May 2010), told CoinDesk that he believed bitcoin could replace “the established system of banks and the endless line of middlemen all taking a cut.”

Yet over the past decade, the worlds of bitcoin – and its cryptocurrency and blockchain offshoots – and traditional finance have begun to interact in ways almost no one would have predicted early on.

Wall Street veterans are decamping to work for firms focused on cryptocurrency. Major financial institutions are flirting with blockchain. And cryptocurrency investors are pushing for the creation of investment vehicles by industry incumbents.

Ten years after bitcoin was born into the flames of the financial crisis, have the cryptocurrency community and Wall Street made nice?

Bitcoin versus the world?

Early on, the ethos around bitcoin was undeniably subversive.

One early adopter and miner, who asked to remain anonymous, told CoinDesk that “in the very beginning” there was “a great deal of discussion about the anarcho-capitalist and/or libertarian ideals” that bitcoin appeared to make possible.

He mentioned dark web markets such as Silk Road, which used bitcoin, but noted that these rested on a misunderstanding of the protocol’s limited anonymity.

Even ignoring its illicit use cases, though, the creation of decentralized money appeared to pose a threat to the established order. It provided, the early adopter said, an escape from “the interpersonal and cultural damage and destruction done by the monetary monopolies” – meaning banks and governments.

Taariq Lewis, a long-time cryptocurrency developer whose most recent project is codenamed Lyra Protocols, agreed that “bitcoin was always meant to bypass the financial system.”

As such, some early bitcoiners worried that participating in such a project could be dangerous.

Stefan Thomas, who discovered bitcoin through the random-browsing site StumbleUpon in 2010, and then went on to work as Ripple’s CTO before starting his own venture, told CoinDesk:

“A lot of people early on in the bitcoin community were very worried that central banks would look at this as a fundamental threat to one of the key, key, pillars of power of the government, which is the ability to issue currency. And so a lot of people early on stayed anonymous, they did not reveal their real identities.”

As it turns out, he said, most of the supposed central bank “illuminati” were simply curious about the new technology.

Although, that’s not to say that mavens of established finance haven’t lashed out on occasion. Jamie Dimon, JPMorgan’s CEO since before the crisis, has called bitcoin a “fraud,” though he’s since walked that statement back. And Warren Buffett, the billionaire investor who bailed Goldman Sachs out in the week following Lehman’s bankruptcy, has called bitcoin “rat poison squared.”

To be sure, for all the hope it’s inspired (and acrimony it’s generated), bitcoin is far from toppling the incumbent financial system.

Wall Street banks – most of them – not only survived the crisis, but have grown bigger than they ever were before it. Central banks and fiat money show no signs of going anywhere, and bitcoin remains a tiny sliver of the global monetary system.

“It’s turned out,” said Sirer, “that undoing the Fed and replacing money as we know it is actually a tall order, and it has to happen in stages if it’s going to happen at all.”

In the meantime, he added, “There’s a lot to be had from playing nice with the existing system and making it better.”

l33t meets the Street

The view that bitcoin and traditional finance are anything but oil and water – unthinkable when bitcoin was young and the crisis’ wounds were raw – is now practically mainstream.

Thomas described the shift in thinking over the past five years.

In 2013, he said, Ripple was one of the first to think about taking blockchain into the enterprise space, and the typical reaction to that from that time period ran:

“What the hell are you doing? This is the opposite of the whole point of this. The point is you don’t need a bank, why would you work with one?”

He usually replied that banks are where consumers keep their money, so it “isn’t so realistic” to expect that to change soon.

Tone Vays, a cryptocurrency researcher and consultant who worked at the investment bank Bear Stearns prior to its March 2008 collapse, and subsequently became a VP at JPMorgan Chase, made a similar point.

“Most people aren’t ready yet to be in control of their own private keys,” he said.

Far from eliminating middlemen, Vays said, the bitcoin ecosystem will have its own banks – in fact, it already does, in the form of Coinbase and other big exchanges.

Nic Carter, who worked as a research analyst for the asset manager Fidelity before joining the cryptocurrency venture capital firm Castle Island Ventures, said much the same thing. Bitcoin demonstrated that “money and state can be separate,” he said, but added, “I don’t think bitcoin is incompatible with banks.”

That sentiment is typical of a new generation of bitcoin, cryptocurrency and blockchain enthusiasts and professionals.

Many of them, noted Amber Baldet, who worked as JPMorgan’s blockchain program lead before leaving to co-found a new blockchain startup, are “not necessarily of the same initial philosophy that captured the hearts and minds of early users.”

In fact, Baldet, Vays and Carter have all previously worked in traditional finance.

“Coming from the world of traditional finance, I am quite optimistic about the intersection of the two,” said Carter. “I think cryptocurrency will eventually be financialized and will be custodied by large institutions, regulated markets will emerge, along with all the hallmarks of what will become essentially a vibrant virtual commodity market.”

Indeed, many in the cryptocurrency community appear to be welcoming the entrance of financial incumbents – for instance, bitcoin investors are holding their breath for SEC decisions regarding proposed bitcoin exchange-traded funds (ETFs).

Defining revolution

It’s worth noting, though, that despite signs of rapprochement, some in the cryptocurrency community remain wary of Wall Street, central banks and the like.

“Bankers are experts on all the different kinds of market abuse and they are kept honest by market surveillance and government oversight,” Hanyecz said. “In bitcoin markets, anything goes, so I think bitcoiners would be wise to consider that before wishing for more institutional involvement.”

And Carter cautioned that “bitcoiners will have to be vigilant that bitcoin itself is not totally co-opted.”

But for Zooko Wilcox, old school cypherpunk and CEO of the Zcash Company, the point of cryptocurrency is not to “convert everyone else in the world to share our revolutionary fervor.” Rather it’s to provide people with “something they need – a fairer, safer, and more efficient financial system.”

The kind of system, in other words, that Lehman’s bankruptcy proved the world didn’t have.

Cryptocurrency “began with a small group of hardcore revolutionaries,” Wilcox said, but:

“Success will mean billions of people finding cryptocurrency to be convenient and reliable without ever understanding either the scientific or the political revolutions behind it.”

Occupy protester image via Daryl L / Shutterstock