Swedish programmer Alexander Bottema used to be skeptical of bitcoin until he came to see it as an innovation with similar implications as the internet — and went all in on it.
Bottema told Business Insider Nordic what happened after he went all in on bitcoin.
"I'm not a billionaire yet [in terms of Swedish crowns]," Bottema said, 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."
At that time, one bitcoin was worth $30. Today the virtual currency is valued at more than $4,000.
Bottema doesn’t want to reveal how much savings he had when he first invested, but it’s clear he’s content with the investment: his holdings have remained untouched since that day in early 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 said. "I could consider selling some of my assets should the price hit $100,000."
Alexander Bottema grew up in a small community near Stockholm. He started programming at nine years of age, using the family’s Apple 2-computer.
But programming wasn’t enough. He wanted to learn more about the theories behind computing.
In 1991, he started studying computer science at the renowned Uppsala University, where he would later continue as a PhD faculty.
He moved to Stockholm when he started working on data security and encryption for consultancy Upec Industriteknik.
When the company was acquired, Bottema and his two colleagues started their own company.
"Frontec wasn’t interested in product development, which we were into at the time, so we decided to start Polytrust," he said. "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 Massachusetts-based company provides data analysis and simulation for industrial purposes.
Seven years ago, Bottema encountered bitcoin for the first time:
”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 downloaded the technical description and the program code for the currency, and used all his knowledge and experience in studying the material, which removed his skepticism.
"It was revolutionizing," he said. "They had solved what I though was unsolvable."
Once he was convinced of bitcoin’s 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 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."
What is driving the value of bitcoin, according to Bottema, is the combination of a growing number of use cases, like micro-payments, and a limited supply of the currency.
At the outset, he worried most about a ban against the currency — but he doesn’t consider it a threat any longer. As far as a potential threat from competing cryptocurrencies, he likens it to the war between VHS and Betamax.
"Technically speaking, Betamax was better, but VHS was bigger," he said. "So even though I theoretically could invent an entirely new internet, it would be very hard to make it grow."
Bottema said he doesn't get worried whenever the currency's value plummets.
"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."This article was originally published on Business Insider Nordic.