Just over four years ago, Swedish developer Alexander Bottema went from intense skeptic to comtemplating bitcoin as an futuristic reality with implications as large as the internet itself. In an interview, he reveal to the world what happened after he went out on a limb on bitcoin, and shares to other investors how we could walk in his footsteps.
Did bitcoin make you a billionaire?
”No, I’m not a billionaire yet [in Swedish Krona],” Alexander Bottema, mused on the phone.
”But my capital has grown by a factor of more than one hundred since I sold all my stocks and liquidated my savings in order to buy bitcoins in 2013.”
At that point, one bitcoin was worth 30 USD. Today, nearing four years later, the virtual currency is valued at 4000 USD.
Bottema doesn’t want to reveal his savings at the time but it’s clear he’s very happy with the investment which have made him millions: his holdings have remained untouched since that day in 2013.
”I consider it a retirement insurance. I’m not thinking about buying any more, since I can never get the same return on investment again,” he joked
“I could consider selling some of my assets should the price hit 100,000 dollars.”
Alexander Bottema grew in a community just outside of Stockholm. He started developing at nine years of age, using the family Apple 2.
”The booming personal computer market made it an exciting time to grow up.”
Programming turned out not to be enough for Alexander. He yearned knowledge of the theories behind computing. When it turned 1991, he began studying computer science at the Uppsala University, where he remained later as PhD faculty.
Uppsala moved to Stockholm when he started working with data security and encryption for a consulting firm. When the company was purchased, Alexander Bottema and two colleagues ventured out on their own by starting their own company.
”Frontec wasn’t interested in product development, which we were into at the time, so we decided to start Polytrust. We got financial support from two venture capital firms: Telia Business Innovation and IT Provider.”
Soon after that Alexander Bottema moved to the U.S. to work for Mathworks, where he remains today. The Massachusetts company provides data analytics and simulation for industrial uses.
Bottema encountered Bitcoin for the first time seven years ago.
”I rejected it as something uninteresting. Seeing that I had a long track record in data security, I was certain that it wouldn’t be possible to build safe servers that are open, and envisioned a crash. The following year, I was sitting on the subway and read in the Metro newspaper how bitcoin had recovered after a crash. I couldn’t understand how a currency that is built on trust could recover. That piqued my interest.”
He found the technical descriptions and program code for the currency, and used all his knowledge and experience to studying the material in depth. Alexander Bottema’s jaw dropped soon after. His deep skepticism was gone with the wind.
”It was revolutionizing. They had solved what I though was unsolvable.”
He was instantly bitcoin’s excellence and started calculating how the worth of the currency could stand at one day. Like many, Bottema used the gold market as a good comparison.
”The allocated value of the gold market, where rich people put their money to avoid devaluations, is roughly 8,000 billion dollars. If you divide it by 21 million, which is the number of bitcoins that will be available from the year 2140 onwards, you get 380 000 dollars per bitcoin. I ended up on values ranging between 50,000 and 100,000 dollars per bitcoin. I panicked, and bet all of my savings.”
Bottema stated that the factors driving the value of bitcoin, is the combination of a growing number of micro payments, and the limited supply of the currency.
Initially he worried most about a ban against the currency but no longer considers this something to be concerned.
Are competing cryptocurrencies a threat?
”The first one is the biggest. This is quite similar to the war between VHS and Betamax. Technically speaking, Betamax was better, but VHS was bigger. So even though I theoretically could invent an entirely new internet, it would be very hard to make it grow.”
Do you ever worry about the volatility of the currency?
“No, I know how the system works and I know what I’ve invested in. Sure, the currency dips, but it has always recovered after some time. Bitcoin’s future looks bright.