Four years ago, Swedish expert programmer Alexander Bottema went from deep skepticism to considering bitcoin as an innovation with similar implications as the internet itself. In an exclusive interview, he reveals what happened after he went all in on bitcoin, and shares how other investors can walk in his footsteps.
So did it make him a billionaire?
No, Im not a billionaire yet [in terms of Swedish crowns], says Alexander Bottema, laughing 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.
By that time, one bitcoin was worth 30 dollars. Today, almost four years later, the virtual currency is valued at 4000 dollars.
How much savings he had at the time Bottema doesnt want to reveal, but its clear hes content with the investment: his holdings have remained untouched since that day in early 2013.
I consider it a retirement insurance. Im not thinking about buying any more, since I can never get the same return on investment again, he quips.
Alexander Bottema grew up in a small community near Stockholm. He started programming at nine years of age, using the familys Apple 2-computer.
The booming personal computer market made it an exciting time to grow up.
But programming wasnt enough for Alexander Bottema. He wanted to learn more about the theories behind computing. In 1991, he started studying computer science at the renown Uppsala University, where he would later continue as a PhD faculty.
Uppsala turned into Stockholm when he started working on data security and encryption for consultancy Upec Industriteknik. When the company was acquired, Alexander Bottema and his two colleagues started their own company.
Frontec wasnt 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.
After Stockholm and Polytrust, Alexander Bottema moved to the U.S. to work for Mathworks, where he is still employed. The Massachussetts-based company provides data analysis and simulation for industrial purposes.
I rejected it as something uninteresting. Seeing that I had a long track record in data security, I was certain that it wouldnt 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 couldnt understand how a currency that is built on trust could recover. That piqued my interest.
He downloaded the technical description and the program code for the currency, and used all his knowledge and experience in studying the material.
Alexander Bottemas jaw dropped. His deep skepticism was gone with the wind.
Once he was convinced of bitcoins excellence, he started calculating how much the currency could one day be worth. Like many others, Bottema used the gold market as 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 380000 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.
What is driving the value of bitcoin, according to Bottema, is the combination of a growing number of use cases, like micropayments, and a limited supply of the currency.
At the outset, he worried most about a ban against the currency but he doesnt consider it a threat any longer.
Isnt there a threat from competing cryptocurrencies?
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 not get worried whenever the currency’s value plummets?
No, I know how the system works and I know what Ive invested in. Sure, the currency dips, but it has always recovered after some time. Bitcoins future looks bright.
Heres how you invest in bitcoin:
Create an account on an exchange, not an intermediary. This will give you the best price. The most accessible one for Swedes is Bitstamp.net.
All bitcoin exchanges are strictly supervised, which means you need to send copies of your ID so as to prevent money laundering.
Send over money to your account using a (European) Sepa-transfer.
Now you are eligible to buy bitcoins.
If youve bought the currency, and your exchange goes bankrupt, its important that your withdraw them.
Transfer them your own bitcoin wallet, for instance Ledger Waller or Blockchain.info.
Its important that you save the code of your wallet on a printed piece of paper or a USB-drive in case your computer would crash or disappear.
When you want to sell, just do the opposite.
Read the original article in Swedish on VA Finans.
- Bitcoin (BTC) Price, Chart, Info | CoinGecko - November 17th, 2018
- Bitcoinker - The Best Bitcoin Faucet, Claim Every 5 Minutes! - November 17th, 2018
- Africa Dominates P2P Bitcoin Exchange Paxful With $64 Million ... - November 10th, 2018
- Bitcoin Dips Below $7,000, Hitting Lowest In 2 Weeks - August 8th, 2018
- Things you need to know Bitcoin.com - July 29th, 2018
- Bitcoin - Bitcoin Price Live, BTC Value, Mining, BTC to USD ... - July 10th, 2018
- Digital Currencies and Financial Inclusion: Revisited | CGAP - May 19th, 2018
- Bitcoin vs. Electronic Money: Digital But Different | CGAP - May 19th, 2018
- Must I pay tax this year if I transfer bitcoin from ... - April 4th, 2018
- Will a 1099-B form work best for reporting bitcoin ... - April 4th, 2018
- Bitcoin (BTC) price: News & Live Chart - Trading Analysis ... - March 29th, 2018
- Bitcoin USD - BTCUSD Overview - MarketWatch - February 28th, 2018
- Buy Bitcoin IRA | Bitcoin IRA Investment & Retirement Account ... - February 28th, 2018
- Bitcoin Fees Have Become Infeasible - Bitcoin News - December 23rd, 2017
- Bitcoin's incredible surge takes it above $9,500 - Nov. 27 ... - November 27th, 2017
- Warning Signs About Another Giant Bitcoin Exchange - November 23rd, 2017
- What Is Bitcoin, and How Does It Work? - The New York Times - October 6th, 2017
- Why Beanie Babies make for a better investment than bitcoin - MarketWatch - September 5th, 2017
- Bitcoin's price hit $5000 last week. It's still a dumb investment - Los Angeles Times - September 5th, 2017
- Bitcoin dips another $300 after China's cryptocurrency crackdown - CNBC - September 5th, 2017
- IRS Eyes Profits From Bitcoin and Bitcoin Cash Investments - Investopedia - September 5th, 2017
- Sequoia, IDG to Invest in China Bitcoin Mining Giant - Bloomberg - September 4th, 2017
- Bitcoin Price Drops By Over $250 as Crypto Markets Lose Billions - CoinDesk - September 4th, 2017
- Bitcoin $5,000: Currency Hits New Record High | Fortune.com - Fortune - September 2nd, 2017
- Bitcoin Drops Below $5000 as Crypto Markets See $13 Billion Sell-Off - CoinDesk - September 2nd, 2017
- Searching for the future of currency, major companies try Bitcoin technology - PBS NewsHour - September 2nd, 2017
- Bitcoin Mempool is Empty and High Transaction Fees are no Longer Required - newsBTC - September 2nd, 2017
- Literally just one huge chart showing bitcoin's incredible rise to $4800 - MarketWatch - September 2nd, 2017
- Bitcoin's nearly five-fold climb in 2017 looks very similar to tech ... - CNBC - September 2nd, 2017
- BTC-e's Big Claim: Bitcoin Withdrawals to Begin Tomorrow - CoinDesk - CoinDesk - September 2nd, 2017
- As bitcoin surges in price and popularity, so do the complaints - CNBC - August 31st, 2017
- Here is how Indians are minting a fortune in bitcoins - Economic Times - August 31st, 2017
- Why Miners Are Mining Bitcoin Cash and Losing Money Doing It - CoinDesk - August 30th, 2017
- Bitcoin jumps nearly 70% for August to record high, offshoot 'bitcoin cash' falls to more than one-week low - CNBC - August 30th, 2017
- Bitcoin Foundation seeks legal protection from US currency regulation - The Independent - August 30th, 2017
- Bitcoin's epic rise leaves late-1990s tech bubble in the dust - Economic Times - August 30th, 2017
- 99Bitcoins | Buy Bitcoin, Bitcoin Guides & Reviews for ... - August 29th, 2017
- Dark web finds bitcoin increasingly more of a problem than a help, tries other digital currencies - CNBC - August 29th, 2017
- Bitcoin Meets Zcash: Developers Test Tool for Trustless Trades - CoinDesk - August 29th, 2017
- Russian Regulator: Bitcoin Should Be Limited to 'Qualified Investors' - CoinDesk - August 29th, 2017
- As bitcoin and rivals surge, so too have complaints to the CFPB - MarketWatch - August 29th, 2017
- Is Bitcoin the New Gold? - TheStreet.com - August 28th, 2017
- How To Gain Bitcoin Exposure Inside Of Your Traditional Brokerage Account - Seeking Alpha - August 28th, 2017
- Value of all digital currencies hits record around $160 billion as ... - MarketWatch - August 28th, 2017
- Why Motherboard Is Capitalizing 'Bitcoin' Again - Motherboard - August 28th, 2017
- New Bitcoin.com Charts: The Bitcoin Ecosystem at a Glance - Bitcoin News (press release) - August 27th, 2017
- Expert Predicts Bitcoin Will be Worth up to $20000 in the Next Three Years - Futurism - August 27th, 2017
- Does Bitcoin Have a Mining Monopoly Problem? - Fortune - August 27th, 2017
- Bitcoin poised to challenge record after recovering from correction - MarketWatch - August 26th, 2017
- Bitcoin Prices Rise But Fall Short of All-Time High - CoinDesk - CoinDesk - August 26th, 2017
- Bitcoin and Artificial Intelligence Can Help Fight Sex Trafficking ... - Fortune - August 26th, 2017
- Bitcoin Investors, Beware: The IRS Is Coming for Your Vast Riches - TheStreet.com - August 26th, 2017
- Bitcoin's Lightning Network Moves Closer to Compatibility - CoinDesk - CoinDesk - August 26th, 2017
- A sketchy Satoshi has popped up to promote his new blockchain - The Verge - August 26th, 2017
- Bitcoin And Why You Think You're Right (Even When You're Wrong) - Seeking Alpha - August 26th, 2017
- Bitcoin and Ether rise, helping take crypto space above $150 billion market cap - MarketWatch - August 23rd, 2017
- Bitcoin Prices Are Up Over $100 Already Today - CoinDesk - August 23rd, 2017
- MGT Capital Raises $2.4 Million to Expand Bitcoin Mining Operation - CoinDesk - August 23rd, 2017
- Hackers Swipe Bitcoin by Stealing Your Cell Phone Number First - Inc.com - August 23rd, 2017
- Bitcoin rebounds after briefly entering correction territory - MarketWatch - August 22nd, 2017
- Here's Why Bitcoin Rose More than $1000 in Two Months - Futurism - August 22nd, 2017
- The IRS Has Special Software to Find Bitcoin Tax Cheats - Fortune - August 22nd, 2017
- Bitcoin Prices Dip Below $4000 to Hit 7-Day Low - CoinDesk - August 22nd, 2017
- China's two biggest bitcoin exchanges helped themselves to $150 million in idle client funds - Quartz - August 22nd, 2017
- Bitcoin Analysts Compete for the Highest Price Forecast - Bloomberg - August 21st, 2017
- A Bitcoin Law for Every State? Interest and Animosity Greet Model US Regulation - CoinDesk - August 21st, 2017
- Take Two: Bitcoin Miner BTCS Announces New Merger Deal - CoinDesk - August 21st, 2017
- Bitcoin About To Burst - Seeking Alpha - August 21st, 2017
- 10 Bitcoin Wallet Apps You Should Consider Using Today - HuffPost - August 20th, 2017
- Bitcoin-accepting shops leave cookie trail that crumbles anonymity - The Register - August 20th, 2017
- Bitcoin Trades Sideways as Bitcoin Cash Price Drops to $800 - CoinDesk - August 20th, 2017
- 'Bitcoin cash' surges 40% in single day as investors bet on its faster processing speeds - CNBC - August 19th, 2017
- 'Bitcoin cash' soars to record high above $900 as 'mining' profits jump - CNBC - August 19th, 2017
- Photos: Inside one of the world's largest bitcoin mines - Quartz - August 18th, 2017
- Bitcoin Surged to a New High Adding $17 Billion in Just Over a Week - Fortune - August 18th, 2017
- Another major country joins China and Japan in cracking down on bitcoin exchanges - CNBC - August 18th, 2017
- Bitcoin Cash Breaks Price Doldrums to Push Past $400 - CoinDesk - August 18th, 2017
- Poloniex and Breadwallet Will Support Bitcoin Cash Transfers - The Merkle - August 14th, 2017
- Bitcoin Price Flies To More Than $4100 Over Weekend - PYMNTS.com - August 14th, 2017
- Why is Bitcoin worth more than gold? - Independent Online - August 14th, 2017