Nathan McCauley is the CEO of Anchorage Digital. Very recently, it was revealed that it had raised $350 million in a Series D funding round, meaning that it is now valued at more than $3 billion.
1. Started Out at Arxan Technologies
McCauley’s career started out at Arxan Technologies. In fact, he interned there. After which, McCauley went on to become a software engineer as well as a technical product manager.
2. Worked on Anti-Reverse Engineering
While McCauley was at Arxan Technologies, he worked on a number of things. To name an example, he worked on anti-reverse engineering, which refer to techniques that make it more difficult to analyze software without access to its source code. Anti-reverse engineering is useful for a wide range of parties for a wide range of reasons. To name an example, there are a lot of businesses that have a lot of value tied up in their software, meaning that such techniques are useful for protecting their secrets.
3. Worked on Key Management
Besides that, McCauley worked on key management as well. That is pretty much exactly what it sounds like, which is to say, the management of cryptographic keys used in a cryptosystem. As such, key management covers everything from the generation of those cryptographic keys to the eventual destruction of those cryptographic keys. It is extremely important because a cryptosystem would be worse than useless without it. After all, cryptosystems are expensive, meaning that an example that can’t provide any benefits would be a serious hindrance for an organization.
4. Was an Early Employee of Square
Later, McCauley joined the financial services and digital payments company Square when it was still small. To be exact, he became one of the company’s employees at a time when there were just 45 of them before leaving when the company had more than 1,000 employees. At Square, McCauley continued working on security as a security engineer as well as a security engineering manager. During his time, he worked on a number of notable projects, with an excellent example being Square’s first encrypted credit card reader. Besides this, there is one more reason why this period was notable. Simply put, Docker was where McCauley worked with Diogo Monica, with whom he would continue working until the two went on to become co-founders of Anchorage Digital.
5. Was at Docker
After that, McCauley went to Docker, which offers a number of platform as a service products. There, his role was even more important than before. This is because McCauley was the one who built Docker’s security team before leading them in securing containers, which refers to the packages by which software is delivered.
6. Grew Up in a Small Town
Background-wise, McCauley grew up in a small town in the state of Indiana. His parents worked in factories as well as other places that would be considered blue-collared. As such, it was a very dramatic change of pace when McCauley headed to San Francisco, which can be considered one of the premier tech hubs in the United States and beyond. Having said that, his story isn’t that unusual. After all, small towns have fewer opportunities than their bigger counterparts. Thanks to that, it is very common for people who grew up in small towns to be faced with a choice to either stay at home and pass up on the possibilities available to them or leave home in pursuit of the opportunities that can be found elsewhere.
7. Runs a Digital Asset Bank
Currently, McCauley is responsible for running a digital asset bank. Essentially, this means that his company offers a custodian product for cryptocurrencies as well as other digital assets. That might not sound very unusual. After all, there are a lot of custodian products that can be found out there, so hearing about one more of them isn’t that interesting. What makes Anchorage Digital stand out is the fact that it has a federal banking charter. As a result, when it calls itself a digital asset bank, it isn’t joking about the “bank” bit.
8. Deals with Institutional Clients
Speaking of which, it is important to note that Anchorage Digital doesn’t deal with normal, everyday consumer. Instead, its clientele consists of banks and other institutions. To name an example, when Visa bought a CryptoPunk in August of 2021, it was Anchorage Digital that handled the transaction for them. As such, it isn’t hard to see why investors are so eager to invest in the company. Simply put, digital assets are here to stay, so institutions need a reliable partner to handle digital asset-related matters for them. That represents a lot of commercial potential, which explains much about Anchorage Digital’s valuation.
9. His Company Has a Major Barrier to Entry
Speaking of which, McCauley’s company has a huge advantage in that it has a major barrier to entry. For those who are unfamiliar with the concept, barriers to entry are factors that can either hinder or outright prevent someone from entering a market. Something like a lemonade stand doesn’t have a lot of barriers to entry. This is because they are relatively inexpensive and low-labor to set up. Moreover, lemonade stands tend not to be very heavily-regulated. Meanwhile, Anchorage Digital’s federal banking charter represents a major barrier to entry to its particular part of the crypto market because it is so much more difficult to get one of those.
10. Wanted to Be the Institutional Player From the Start
McCauley and his fellow co-founder made a decision to be the institutional player from the start. Essentially, this meant that they sought out both regulatory clarity and regulatory compliance, which was a contrast to a lot of other companies operating in the same space that preferred to dance around the edges of what rules existed. This seems to have been a good decision, particularly since the presence of bad actors are one of the major factors holding up the market for digital assets as a whole.