Understanding the basics in Bitcoin before investing

[DaveNeck]

*Understanding Bitcoin before investing*
 Before one start crypto investment I think you should consider whether crypto fits your portfolio goals, risk profile, and personal convictions before buying. Crypto is highly volatile, and does not have the same regulatory protections as registered securities.                  .
 *Risk tolerance in bitcoin investment* :     Bitcoin is a high-risk investment, and you should carefully look at your risk tolerance before you invest. If you don't feel comfortable investing in volatile assets or only have a small sum of money to invest, you may want to consider other investment options.
What do you need to know before investing in Bitcoin?
   
What beginners should know about Bitcoins before investing?
Bitcoin is a form of digital currency that uses blockchain technology to support transactions between users on a decentralized network.
New Bitcoins are created as part of the mining process, as a reward to people whose computer systems help validate transactions.
Buying Bitcoin exposes you to a volatile asset class.
The question is what do you think a newbie should know as elementary knowledge before investing in Bitcoin

[franky1]

bitcoins risk tolerance is only high when you are buying bitcoin at it market high
so if people are buying low selling high. they can mitigate risk

bitcoins risk tolerance is only high when you are buying bitcoin for short term mega greed expectation
bitcoins bull bear market cycle is ~ 4 years so expecting short term profits is riskier the shorter you are willing to wait
to mitigate the risk dont make short term decisions or use fund you will need to extract short term

though bitcoins volatility does have market cycle expectations(based on previous performance) of multiplier profits. trying to predict the best bottoms and best tops is where the most risks occur.
to mitigate those risks do not try to be greedy to want to grab the lower most bottom perfect timing and upper most top perfect timing
instead set sensible rational gains % to then extract your funds with profit.

for instance if other stocks/shares/savings interests are only offering <10% averages a year:
dont get greedy wanting 10x(1000%) a year via bitcoin. you will be disappointed
dont get greedy wanting 2x(200%) a year via bitcoin. you will be disappointed
dont get greedy wanting .5x(50%) a year every year via bitcoin. you will be disappointed
dont get greedy wanting .5x(50%) within months via bitcoin. you will be disappointed

set a more rational amount. buy when the market is low and sell when its at your rational gain
EG anything better then 10% is GREAT opportunity that beats other markets, so be happy even if you just set a 10% gain and wait for the target to hit

EG
bitcoins 2016-2020 market cycle had a $500-$20k low high(based on 2016-2017 performance)
if someone see that as a 40x opportunity. they are already thinking too riskily
if they bought at $15k thinking they can still achieve multiples, they are already thinking too riskily
if they are thinking of achieving multiples in months they are already thinking too riskily


EG
bitcoins 2020-2024 market cycle had a $15k-$70k low high(based on 2021-22 performance)
if someone see that as a 4.5x opportunity. they are already thinking too riskily
if they bought at $60k thinking they can still achieve multiples, they are already thinking too riskily
if they are thinking of achieving multiples in months they are already thinking too riskily

those wanting to buy and hold for things like retirement. you dont need to be checking prices daily if you have no expectation to sell daily, anytime soon. so dont panic about the daily whims of markets
prices of anything are not suppose to only go up, they can come down. so dont panic when things go down if you didnt expect to sell anytime soon
just let the market cycles play out over time

[Upgrade00]

Bitcoin is a form of digital currency that uses blockchain technology to support transactions between users on a decentralized network.
New Bitcoins are created as part of the mining process, as a reward to people whose computer systems help validate transactions.

• Bitcoin does not use blockchain to support transactions. Transactions are what makes up each block which is joined with the rest to form a chain.

• Miners do not validate transaction, they confirm them by solving the cryptographic puzzle and make their candidate block the next confirmed block.

Buying Bitcoin exposes you to a volatile asset class.

Every asset has a certain level of volatility.

[franky1]

Bitcoin is a form of digital currency that uses blockchain technology to support transactions between users on a decentralized network.
New Bitcoins are created as part of the mining process, as a reward to people whose computer systems help validate transactions.

• Bitcoin does not use blockchain to support transactions. Transactions are what makes up each block which is joined with the rest to form a chain.

• Miners do not validate transaction, they confirm them by solving the cryptographic puzzle and make their candidate block the next confirmed block.

to clarify
blocks do not need to include transactions (see "empty blocks" examples) however no one can consider a transaction as confirmed unless its seen inside a block

mining pool managers manage the block candidate and transaction selection. miners however do not see transactions, they just produce a sha256 identity thats expensive and timely to recreate for the block

[Helena Yu]

Crypto is highly volatile, and does not have the same regulatory protections as registered securities.

Why if Bitcoin doesn't have regulatory protections? there's no point to have regulatory protections. FDIC insures your money in banks up to $250K, but there's no guarantee if they will refund your money when the banks collapse, there's no deadline when you will get your money (remember the longer they pays you, the longer your money will become small due to inflation), etc.
                  .

What beginners should know about Bitcoins before investing?

They need to know how to differentiate CEX, DEX and non custodial P2P.

What's the point to know Bitcoin is decentralized bla bla when they're use Binance to hold their coins? they already ruin the Bitcoin's purpose.

[Upgrade00]

to clarify
blocks do not need to include transactions (see "empty blocks" examples) however no one can consider a transaction as confirmed unless its seen inside a block

You're right. When you break it down into nuances, there are situations when blocks do not include transactions, but those happen very uncommonly and far between.

[franky1]

Crypto is highly volatile, and does not have the same regulatory protections as registered securities.

Why if Bitcoin doesn't have regulatory protections? there's no point to have regulatory protections. FDIC insures your money in banks up to $250K, but there's no guarantee if they will refund your money when the banks collapse, there's no deadline when you will get your money (remember the longer they pays you, the longer your money will become small due to inflation), etc.

FDIC only sends out cashier cheques as a last resort, usually in days-weeks of bank failure. but first port of call is to sell a failed banks database of customers+balance to another bank to manage. again usually in days/weeks

bitcoin does not have this insurance when using CEX so always advisable to not store funds in a CEX.
it is the users sole responsibility to secure their funds. much like money under the mattress.. there is no insurance/third party refund service
any service that does offer it is where you give them your funds and you relinquish your ownership. but currently no service would or should or could offer that, honourable and guaranteed

[PrivacyG]

Bitcoin will be hard to comprehend particularly for a less technical Newbie and it comes with some hard lessons to learn.  About investing, life et cetera.  I am confident this is valid for all of us.

Do not play with the course of the Market if you are not ready for big losses every now and then and if you are greedy or impatient.  It is much more intelligent to choose Dollar Cost Averaging instead.  It always works just fine.  Trading is fine for small amounts risked.  Once you add too much money in the pot, you will start taking unnecessary and irrational risks unless you can REALLY control yourself.

Anyway.  Most of us are not made for Trading and this is perfectly fine.  Just purchase every now and then and you will most likely do great IF the previous Market runs are going to occur again.

[m2017]

Before one start crypto investment I think you should consider whether crypto fits your portfolio goals, risk profile, and personal convictions before buying.

Can the item of investment be influenced by any personal convictions other than the desire to make a profit?

Crypto is highly volatile, and does not have the same regulatory protections as registered securities.         

Securities are also subject to volatility, of course, not as highly as that of crypto. No regulatory protections will save you from the collapse in the value of securities and the accompanying losses.

If you don't feel comfortable investing in volatile assets or only have a small sum of money to invest, you may want to consider other investment options.

Bitcoin is just well suited for small investments. Try to find securities in which you can invest $5.
   

Bitcoin is a form of digital currency that uses blockchain technology to support transactions between users on a decentralized network.

Bitcoin is now more of a digital security (stock) of a technology company or something like that.

Buying Bitcoin exposes you to a volatile asset class.

Is the stock market really that stable?

[bittraffic]

They have to learn that they can buy a fraction of BTC like 0.005BTC, I think this is the most basic and they can send BTC to anyone as long as the wallet destination is also a BTC address to which exchanges also have BTC address where they can deposit. This is the most basic and no blockchain knowledge is needed.

Know when to buy and when to sell. This I think is the only I want a newbie to understand as an investor because it's the only they can make money in investing BTC.
This includes learning when it's the halving and then the bear market will almost be over. Trading BTC is a different topic for a newbie.

[SamReomo]

What do you need to know before investing in Bitcoin?

You should know that Bitcoin is a crypto-currency that anyone can purchase and hold without any interference from a third part but you'll have to know about P2P trading in order to purchase Bitcoin with 100% privacy. An investor should also know that Bitcoin is digital in nature and storing it on a online exchange can be a very risky thing.

What beginners should know about Bitcoins before investing?

Beginners should know that Bitcoin can be a useful asset if they invest in it with complete care. A beginner should know that one should have his/her own personal wallet if he/she wants to invest in Bitcoin. A beginner should understand that sharing your wallet's private key and seed phase with anyone will allow that person to transfer the bitcoins that you have in that wallet.

[Hamza2424]

What a coincidence here haha I've just replied to a newbie on his misconception about Bitcoin's price action, and the difference between the open market asset and gambling. So moving onto what Op is saying, I don't think for everyone the learnings should be the same as we can classify the categories of people entering the Bitcoin community some are Investors, Some are Holders and some of them want to enter as miners (An exception) and everyone have their own mindset while entering we can just quote some of them general things.

Everyone needs to know what a is Public ledger. (Blockchain).
What is Digital currency and how does it work? (Sending & Receiving)
How to secure your digital assets. (Wallets).

These can be baseline education requirements for everyone who's entering Bitcoin further he can learn according to his requirement of the role he wants to have in the community.

[Raceonsucced]

They have to learn that they can buy a fraction of BTC like 0.005BTC, I think this is the most basic and they can send BTC to anyone as long as the wallet destination is also a BTC address to which exchanges also have BTC address where they can deposit. This is the most basic and no blockchain knowledge is needed.

Know when to buy and when to sell. This I think is the only I want a newbie to understand as an investor because it's the only they can make money in investing BTC.
This includes learning when it's the halving and then the bear market will almost be over. Trading BTC is a different topic for a newbie.

Yes of course like that, as beginners we must understand very well with the conditions that occur, where it will greatly benefit us as investors, and not only that, most of the investors they hold it if conditions are very unlikely.
As a beginner we imitate if step by step if we want to take advantage of the benefits obtained and so on my advice is that a beginner must really master the basic techniques, there are many free services that we can learn from so that profits are increasingly in our favor.

[snowpega]

hmm, Op the way you are explaining Bitcoin is not a good explanation of Bitcoin I hope you also need to educate yourself about Bitcoin. In my honest opinion, if we come into the crypto space bitcoin has very less risk to our funds well if I see it from my view I am holding it for long-term investment and will fetch my amount when I reach/hit my goals and on the other hand, as you are saying the risk is too high in Bitcoin asset is not a good definition of it please do some good research on its ecosystem then you will come to know what actually it is.

well, let's talk about "volatile" Dear it is a digital asset so it is obvious it is a volatile asset. Mention me any digital asset that is not volatile haha. The thing it is less risky to invest in Bitcoin if you want to enter in crypto space my suggestion will be Bitcoin DYRO. Tell me one thing haha if you consider it too risky while entering in the crypto space then what kind of shit alt projects you would prefer to invest in/buy? just asking okay? if you feel good then answer this question. Bitcoin is the king here alone which has been increasing its value since the day it was born what do you think the time when everyone comes to know about it and want to invest in it then you can't imagine where the price will go because there still many people who do not about what bitcoin actually is just like you.

Just wait for the time when everyone desires to own it or buy it and that time may be late for them because I think the price will be too high due to demand only those people who had bought it for the long term and still buying will be in good advantage becaure of their strong belive in it. At the end i would like to suggest you that dear do research on it that may help you to understand it. Many Thanks!

[franky1]

well, let's talk about "volatile" Dear it is a digital asset so it is obvious it is a volatile asset.

to clarify
its volatile because its an asset that is internationally accessible without needing lengthy 14day-30day delivery times

so whilst slavic countries value it at a mining cost of $24k so can sell at profit at todays $48k (2x profit)
pacific islands value it at a mining cost of $144k so happy to buy it at $48k (3x discount)

bitcoins current potential window of speculation due to international access and underlying value cost ranges, opens a wide window of market expectation that can go down to $24k in dire times of $144k in hype times. depending on whoms buying/selling and the season of speculation

[Ale88]

*Understanding Bitcoin before investing*
 Before one start crypto investment I think you should consider whether crypto fits your portfolio goals, risk profile, and personal convictions before buying. Crypto is highly volatile, and does not have the same regulatory protections as registered securities.                  .
 *Risk tolerance in bitcoin investment* :     Bitcoin is a high-risk investment, and you should carefully look at your risk tolerance before you invest. If you don't feel comfortable investing in volatile assets or only have a small sum of money to invest, you may want to consider other investment options.
What do you need to know before investing in Bitcoin?
   
What beginners should know about Bitcoins before investing?
Bitcoin is a form of digital currency that uses blockchain technology to support transactions between users on a decentralized network.
New Bitcoins are created as part of the mining process, as a reward to people whose computer systems help validate transactions.
Buying Bitcoin exposes you to a volatile asset class.
The question is what do you think a newbie should know as elementary knowledge before investing in Bitcoin

I know that many people will disagree with what I'm about to say but I think that you can buy bitcoin even when you don't understand a lot about it. I'll try to explain myself better: if you care about finance, inflation, privacy, keeping control of your money, then bitcoin is already good for you. Just buy and then study more and more. The only downside is the psychological part because not everyone is able to stand market dumps.

[GbitG]

The question is what do you think a newbie should know as elementary knowledge before investing in Bitcoin

Knowing that Bitcoin is a volatile asset is enough, in my opinion. I know that one should know the basics of Bitcoin before they gets involved because you simply can't use something if you don't know what it is, how it's used, and what it's used for, however, from an investment viewpoint, you don't need any additional knowledge other than knowing that it is a volatile asset and when you are trading volatile assets, you are supposed to aim for a lower buying price and a higher selling price, which is the basic principle for trading.

That being said, anyone investing in Bitcoin needs to understand that they aren't supposed to use money that isn't kept idle and might be needed in the near future because the market is highly unpredictable and you cannot know when it might go up or down and your money can get locked for weeks, months, or even years sometimes.

[SOKO-DEKE]

The question is what do you think a newbie should know as elementary knowledge before investing in Bitcoin

Before any newbie should invest in Bitcoin, they should grasp several crucial aspects. Firstly, they should that Bitcoin operates as a digital cryptocurrency, independent of governmental control. This means its value isn't tied to any specific nation's economy or regulations. Secondly, it's vital to understand Bitcoin's volatility, implying its price fluctuations can be significant and rapid. This volatility can lead to substantial gains or losses in short periods, necessitating caution and strategic decision-making.

Moreover, newbies must prioritize securing their Bitcoin holdings by comprehending proper wallet management. Without adequate knowledge of secure storage methods, such as hardware wallets or encrypted software solutions, investors risk losing their assets to theft or technical mishaps. Therefore, educating oneself on these fundamental principles ensures a safer and more informed entry into the world of Bitcoin investment, mitigating potential risks and maximizing opportunities for financial growth.

[stadus]

Newbies should know that investing in bitcoin carries high risk. If they are not patient enough and would always want quick profits, then they won’t be good with bitcoin long term hodling, since the price varies from time to time. One day it’s going upward, then suddenly its price declines, so your faith and patience will definitely be put into test.

However, as you go with bitcoin long term hodling, you will also develop your own strategy and slowly understand the process. Just learn from the early successful investors and you will have the chances to be like them too.

[Lantind]

Newbies should know that investing in bitcoin carries high risk. If they are not patient enough and would always want quick profits, then they won’t be good with bitcoin long term hodling, since the price varies from time to time. One day it’s going upward, then suddenly its price declines, so your faith and patience will definitely be put into test.

However, as you go with bitcoin long term hodling, you will also develop your own strategy and slowly understand the process. Just learn from the early successful investors and you will have the chances to be like them too.

For those who don't have patience when looking at market conditions and they want quick profits from investment, it is impossible for them to get this because the price can change at any time and for some who are just starting out they will panic because they don't know how Bitcoin works so some don't dare to hold until they sell at a loss.

Yes, of course it would be very good if in the process of collecting Bitcoin we could learn about it from those who have a lot of experience in investing in Bitcoin and also we have to be diligent in looking for information ourselves and if we don't understand it well then we can ask those who have experience in this field to be as successful as they have become.