Important Terms you need to know as a Beginner in Bitcoin investment

[Tonimez]

Bitcoin investment is a growing area of interest with increasing number of investors on a daily basis. This is very interesting to see that the Nigerians and the world is now beginning to appreciate the area of digital economy. Bitcoin investment is a good area of investment and just like every other investments, there are basic terms you have to understand in other to be able to make decisions on how to go about your bitcoin investment to avoid possible Losses.

Some of the terms include but not limited to;

DISCRETIONARY INCOME: This is money left from your income after attending to your basic responsibilities. These responsibilities ranges from feeding, children's school fees, House rents, Hospital checks, Transportation, TV subscriptions and home maintenance fee and many other necessary expenditures that awaits you due to your position and for the sake of living. This amount varies due to some factors which could include variation in Basic income, Variation in basic responsibilities and personal factors. This is the amount you are at liberty to play around with after you receive your payment, hence the money you can also invest with.

EMERGENCY FUNDS: This is a part of the Discretionary income that you save up for emergency situation. This money is usually a percentage of the Discretionary fund which you set aside incase of any unforeseen circumstances and usually kept in an easily accessible manner (in fiats). The amount of emergency funds usually vary too due to some factors like the stage of investment: a beginner's emergency allocation is usually higher and could gradually drops overtime (if it is not spent over a long time) and could stop temporarily for a while depending on the amount of emergency funds already accumulated.

BACKUP FUNDS: This is a fund set aside for some unplanned exigencies like change in price of commodities, inflation or something important needs that were not captured in the basic responsibilities. This backup funds too varies and serves as a cushion too along side the emergency funds for the safety of our bitcoin stash.

RESERVED FUNDS: This is a fund set aside mostly for buying bitcoin during a favourable period which could be a time of dip or when there's expectations for rise in price of bitcoin. This reserved funds can sometimes be used up especially after exhausting the backup funds and emergency funds, it serves as extra cushion to the bitcoin in a case of serious unforeseen circumstances.

INVESTMENT FUNDS: This is the money which we introduce into bitcoin investment. This money is usually a percentage of the Discretionary income too and it is usually invested in bitcoin at a particular time. The amount of investment funds generally depends on your basic income and your basic responsibilities. This money is usually allowed as our savings after receiving our weekly or monthly payments.

DOLLAR COST AVERAGE: This is an investment strategy widely known as DCA strategy and it is a way of investing in bitcoin regularly over time regardless of the price of bitcoin and provided you have an available discretionary income. This strategy is very important for beginners because it allows you to invest in a less stressful way which would minimise any form of financial stress and also maintain your cashflow. A proper use of DCA strategy can guarantee a huge success over a long time period.

DIP: This is a period of reduced bitcoin price as compared to the All time high of bitcoin. The extent of dip varies always depending on the market Conditions. There are investors who basically accumulate their bitcoin during dips which is a term usually referred to as "Buying the dip". This strategy is not a very good option because it can cause procrastination among investors and may make a beginner not to own any bitcoin till forever. For me, Every bitcoin price is a dip because the price will keep going up.

LUMP-SUM: This is an investment strategy that involves investing a huge amount of money into bitcoin at once unlike the DCA strategy whereby an investor usually invest in a financial friendly manner with small amounts (compared to the lump-sum strategy). This strategy is good because it allows you to buy larger amounts of bitcoin at once probably during dips. However it can also lead to financial stress which will cause an investor to risk selling off his bitcoin prematurely or selling at loss in the event of emergencies.

OVER ACCUMULATION: This is the stage at which an investor has accumulated enough bitcoin than he planned from the onset of his investments process. This stage comes after a long period of continuous accumulation and aggressive buys too. At this stage, the investor may choose to minimise the rate at which he accumulates bitcoin or may decide to start selling (usually after 4-10 years at least)

HODL: This is a slang for Holding Digital assets Long-term HODLing of bitcoin is very crucial if you wish to increase your chances of making profit from your bitcoin because it will allow you to stay through one or more bitcoin cycles of at least 4-10 years. This improves your chances and maintains your bitcoin stash.

SHORT-TERM INVESTMENT: This is a type of investment in which the person invests for the purpose of making a quick gains. This is also known as Trading. This type of investment is regarded as risky due to the fact that a person stands higher chances of loosing your money during the process or may hinder you from gaining the full profit that bitcoin could offer you if you had HODL longer. Beginners are supposed to be careful when embarking on a short term investment and only invest what he or she can afford to loose.

LONG-TERM INVESTMENT: This is a situation whereby a person invests in bitcoin over a long period of time. This makes the investor to leave his investments over a long period of time. Long-term investment ranges from 4-10 years period and beyond during which bitcoin has gone through several cycles. The longer the HODLing period, the higher the chances of the investor to make profits overtime. In a long-term plan, it is advisable to invest by DCA using your Discretionary income in order to be able to hold your bitcoin for long in a financially stress-free manner.

BITCOIN VOLATILITY:
This means that bitcoin is volatile, meaning that the price is not fixed nor one directional. Bitcoin exhibit a kind of market behaviour whereby it is very unpredictable and can go up or down at anytime. Bitcoin Volatility is one of the strengths of bitcoin and allows bitcoin enthusiasts to either capitalise on the volatility to Trade bitcoin or to HODL bitcoin through a long-term investment other to avoid the possible losses due to negative Volatility.

BITCOIN CYCLE: Bitcoin has followed a four-year cycle tied to Bitcoin halving events, which happen approximately every four years. This period of 4 years see bitcoin pass through many stages and mostly arrive at a new All time high at the end of the cycle as bull market. This cycle is neither fixed or absolute. But having the knowledge of bitcoin cycle would assure you of the safety of your funds even during bear market and it's the more reason why bitcoin long-term investment spans through 4 to 10 years and beyond. You can read More about bitcoin cycle at your leisure time.

As a beginner, you can get into bitcoin investment and succeed, not majorly by knowing everything about bitcoin, but by just having the basic knowledge of bitcoin and the suitable strategies that will guarantee your success in bitcoin.

P.S: Sourced from my residual knowledge gained since joining this forum and further studies on net. BEGINNERS MUST LEARN RIGHT!!!

       You can add more of the basic terms that would be useful for Beginners in bitcoin.

[BIT-BENDER]

Good work but this type of thing serve less use because there is no term beginners can't get when they search, very soon this thread will be pushed down and hardly accessible to newbie so it's best to teach the beginners how to fish than giving them fish.
To the newbies finding anything complicated you can always use the search or do your research especially on terminologies.

[hmbdofficial]

Well, as I read through I can tell that you’ve highlighted quite a number of items a beginner should get him self acquainted with  but I think you’ve missed out the most important aspect that a beginner should be worried about about Wch is the security of funds how to avoid malware,pishining  and most importantly how to protect our private keys this are the lost important things two know because when your funds are exposed every other thing is secondary.

[Tonimez]

Good work but this type of thing serve less use because there is no term beginners can't get when they search, very soon this thread will be pushed down and hardly accessible to newbie so it's best to teach the beginners how to fish than giving them fish.
To the newbies finding anything complicated you can always use the search or do your research especially on terminologies.

Thanks for the kind words. A beginner can always scroll through pages of the threads and could incidentally stumble on the piece and could gain a knowledge he wouldn't have thought about. By "Giving them fish", do you mean oral lecturing of beginners? Several beginnners get into bitcoin indirectly (not from anyone) or through old members, but not every time that you will be there to lecture him on the things he needs to know. We can always teach beginners on our own, but we may also sometimes forget some areas to mention, that's where this knowledge counts for the beginner.

Various threads are always continuously pushed down and everyone knows it. However, you don't know who would get a crucial help within the short or long period of time it will spend above the threads.
Using the search engines is very good, but as a beginner it's only when you know what to browse about that Google can be helpful. The above write up is only a hint (Not all encompassing). So as a beginner you will always need to Do your own research (DYOR).

Well, as I read through I can tell that you’ve highlighted quite a number of items a beginner should get him self acquainted with  but I think you’ve missed out the most important aspect that a beginner should be worried about about Wch is the security of funds how to avoid malware,pishining  and most importantly how to protect our private keys this are the lost important things two know because when your funds are exposed every other thing is secondary.

There's room to add your own knowledge too. I don't know it all as I stated earlier. This is a good aspect too, security of coins is very important but I feel that a beginner may not also easily have to learn about the security before going into bitcoin investment but can learn about it during the process.

[Donk1]

Well bro you did a great job on bringing out the terms. Basically we have a lot of newbies in the Nigeria board though most of them may have had knowledge about all these terms, but not all. So I like to believe that this thread would serve as a shortcut for them.

​And again I will advise that as a newbie, do not just look at the term and comment that it's good also do your own research to make sure that it's correct because ,to me as a newbie doing research should be your number one priority as it would help you gain knowledge faster. That's just it So that whenever you come across it in a where both in and outside the forum, it wouldn't be new to you..

[FirmWars]

       You can add more of the basic terms that would be useful for Beginners in bitcoin.

More basic terms that a Bitcoin beginner needs to know are wallet, address, private key or seed phrase, security and privacy. some people mistake address to wallet and mistakes secret phrase to private key, it might look unimportant until one has need for it and then starts making mistake because they know nothing about it. In terms of security and privacy, we all know how important it is for Bitcoiners to be rooted in the wisdom of good security measures so that scammers don't steal their hard earned money that has been invested in Bitcoin. Security is important for beginners as much as they see importance to also invest in Bitcoin, if a beginner can not secure, then their investment will only mature to be taken by a scammers, the scammers could even be their friends in disguise.

[Obim34]

Every thing you listed are self explanatory to a newbie, honestly you can buy the advice from BIT-BENDER, if i say anything longer than this, it may seem like condemning your effort on bringing this thread, but you didn't do justice to the thread, soft critic should help you improve, no body has anything against you, just improve. Moreover, i checked your topics on politics board, those are alright.

[ejikeme24]

This are the basic knowledge we keep talking about here, you would have used the word (basic knowledge) instead of terms " because most newbies might be finding it hard to understand what you mean by terms because I have never seen anyone making use of the word terms" but I totally understand what you're talking about. All this things you highlighted is very necessary and compulsory for all beginners to know before investment should be make because without knowing this basic things we might be facing alot of difficulties in our accumulation journey.

[Jubilee58]

This is very interesting, you have highlighted the things or the knowledge that a bigginer need to kick start his or her bitcoin investment. This basic knowledge enables you to delve into bitcoin investing without much stress

Going into bitcoin investing without having basic knowledge can be very disturbing but with these ideas you know how to invest in bitcoin comfortably using the right method.

[JimaGod]

OP already done a great job providing essential information and selfe explanatory guidelines for newbies in the crypto world. We're lucky to be born into the generation of modern technology. Knowing what we know now,  we can beat our chest and provide ourselves with crucial information that would help elevate us and put us entirely on another new phase in cryptocurrency. I know the challenges that comes with it especially when you're newbie.

Common man, no rewards come for been a newbie in the market. It's very compulsory to learn the market extensively because there's nothing like fair treatment when the market finally comes for us all. We should be prepared and ready for whatever outcome the market might exert.

[Brizi5000]

This are the basic knowledge we keep talking about here, you would have used the word (basic knowledge) instead of terms " because most newbies might be finding it hard to understand what you mean by terms because I have never seen anyone making use of the word terms" but I totally understand what you're talking about. All this things you highlighted is very necessary and compulsory for all beginners to know before investment should be make because without knowing this basic things we might be facing alot of difficulties in our accumulation journey.

weather terms or basic knowledge i believe the Op has just passed a crucial message across to us so we can get ourselves acquainted with these terms mostly used by bitcoin investors. from this message now knowledge have been acquired as we hope to learn more and explore in the cryptocurrency world.