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Topic: Bitcoin mathematics for beginners (Read 142 times)

sr. member
Activity: 700
Merit: 348
January 28, 2024, 11:48:01 AM
#8
To @OP before sharing any information, especially mathematical formulas we must verify if the information we are sharing is correct, a simple google search will verify the formula if they are correct.  Aside from that, I think @OP needs to modify his formula and adopt the correction done by @Saint-loup and @Faisal2202

This has been repeated here over and over but they (newbies) turn blocked ears and pretend as if no one is talking. Read, learn and understand before you think of teaching others. I know knowledge is not measured by our ranks here and some people behind newbies accounts can not underrate but it's also important to identify the areas you are good at and verify what you intend to post before making it to public. There is no point in rushing to teach others when you also need the knowledge. The annoying thing is to abandon the thread after creating one without following up the discussion. I can see that here, the Op followed up and effect the correction given but sadly he refused to acknowledge those who call his attention. Nevertheless, it's a good topic but just like Faisal2202 said, majority of us don't care about the calculation and formula but we focus on the profit and lose on our investment.
hero member
Activity: 1232
Merit: 475
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January 27, 2024, 03:33:34 PM
#7
It's surprising than anybody except Faisal2202 for the Dollar-Cost Averaging formula has come to correct your mistake.
Thanks for noticing and admiration, it makes me happy  Cheesy By the way, you also corrected the formula for ROI which no one noticed yet, I also did not, but thanks to you. Op should edit the post accordingly unless he/she has a better explanation.
@OP had given formulas but sadly most of the given formulas were wrong and were corrected by Faisal2202 and Saint-loup, -cut-
Not a big issue as I don't see anyone using the formulas for their profile or trading purpose and making a loss but I do agree with you that we should do proper research before making a topic, but sometimes when the post is above our understanding, we make mistakes in them, I also made many topics till now, in which I was wrong sometimes, but corrected by other members. Thus learned new things in the correct way.

OP might be using this formula for I don't know how much time, but due to this forum he got corrected like I was, so we should not worry that much (to OP) about the fact that we are being corrected publically, instead we should focus on the fact that we are being taught for free. My teacher used to say, even if you have to bear the insult, bear it, but do learn from others. I don't know how you (OP) fell about this but I was bashed by seniors many times but never felt insulted (I hope you won't mind my words and learn from it).
hero member
Activity: 1722
Merit: 801
January 26, 2024, 10:45:53 PM
#6
To invest in Bitcoin, an investor must have capital management for different things, not only for investment but also for other things in life.

The capital spends for investment must not be all of money that person has. Using all money to invest is very risky because investment itself is already risky. It can cause profit or loss so if an investment leads to completely loss, the person will be bankrupted.

Now with investment in Bitcoin, OP has to buy it from an exchange that can be decentralized, centralized or peer to peer. There will be different costs like exchange fees for taker, maker orders and withdrawal fee.

Check those fees around exchanges https://www.cryptowisser.com/exchanges/

Check withdrawal fee around exchanges: https://withdrawalfees.com/coins/bitcoin

Choose good wallets to withdraw bitcoin from centralized exchange and store it in your non custodial wallet.
https://bitcoin.org/en/choose-your-wallet
legendary
Activity: 3010
Merit: 1280
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January 26, 2024, 08:57:44 PM
#5
Snipped

You try in making some breakdown but in words and not mathematically as you has already said, I expect seing some mathematical calculations to proof what you're saying, never the less, we should be more concerned about the way things appeared and how we are to go by them, everything we may want to know about Bitcoin has been made available for us already, we can only just have a means of getting them through the acquisition of knowledge, begin such by understanding the white paper illustrations and protocols and you can then start from somewhere.

@OP had given formulas but sadly most of the given formulas were wrong and were corrected by Faisal2202 and Saint-loup, this is one good reason why we should do deep research in creating guides or know-how topics.  With less knowledge, we might misguided people and give wrong information.  Luckily we have members here who are knowledgeable enough to spot wrong information and correct it accordingly.

To @OP before sharing any information, especially mathematical formulas we must verify if the information we are sharing is correct, a simple google search will verify the formula if they are correct.  Aside from that, I think @OP needs to modify his formula and adopt the correction done by @Saint-loup and @Faisal2202
legendary
Activity: 2604
Merit: 2353
January 26, 2024, 05:45:26 PM
#4
Return on Investment (ROI): Percentage profit based on your investment. Formula: ROI = (current price of Bitcoin - purchase price) × 100.

Dollar-Cost Averaging (DCA): this is a Strategy where you invest a fixed amount regularly. Formula: DCA = (average cost per Bitcoin) / (Total investment amount × Bitcoin quantity).
It's surprising than anybody except Faisal2202 for the Dollar-Cost Averaging formula has come to correct your mistake. I agree with him the right formula should be
DCA = Total investment amount / Total Bitcoin quantity to know at which average price you have buy your BTCs and what is your Break-Even Point. But you can also reverse the formula to find how many bitcoins on average you have been able to buy for one USD.

But your Return on Investment formula is also wrong because if you've bought one BTC at $20k it would mean that currently you've made (40k-20k) x 100 = 2000k= 2 million %
Instead, the right formula is  ROI = (current price of Bitcoin - purchase price) / purchase price × 100
If you apply the same values as above you get : 20k / 20k x 100 = 100%
sr. member
Activity: 672
Merit: 416
stead.builders
January 26, 2024, 11:12:35 AM
#3
Snipped

You try in making some breakdown but in words and not mathematically as you has already said, I expect seing some mathematical calculations to proof what you're saying, never the less, we should be more concerned about the way things appeared and how we are to go by them, everything we may want to know about Bitcoin has been made available for us already, we can only just have a means of getting them through the acquisition of knowledge, begin such by understanding the white paper illustrations and protocols and you can then start from somewhere.
hero member
Activity: 1232
Merit: 475
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January 26, 2024, 10:58:09 AM
#2
You have put a great effort here, understanding of these formulas is no doubt a good way to start as beginners, but honestly, we don't need forumals at every point, we only need enough maths to calculate whether we are making a profit or loss. For example, if we invested 100$ and made $200 which means we made $100 profit. But still, formulas give us a broad idea sometimes, they come in handy. Talking about the DCA formula, I think you made some mistake in that, or I might be wrong, it just not looks fine (your DCA formula).

The correct one should be like  DCA=Total investment amount / Total Bitcoin quantity, and I won't say we invest a fixed amount of money in DCA after some interval of time, because we can invest the variable amount of money and we are not obliged to invest a fixed amount every time.

DCA is actually a good strategy, and I have practiced it in accumulating BTC, but till now I never used a formula nor I have ever needed it. I just kept some funds aside and invested them in BTC after every week and the amount was not fixed, but still, DCA works for me.
member
Activity: 66
Merit: 17
January 25, 2024, 04:35:49 PM
#1
Usually, Bitcoin investments involve a small mathematical aspect. Understanding this is crucial for effective risk management and comprehending how your invested money can grow. Don't be afraid; let me break it down gradually.

Investment Amount: this is The money you're putting into Bitcoin.
  
Bitcoin Quantity: this is The amount of Bitcoin you want to buy. Formula: Bitcoin quantity = investment amount / current price of Bitcoin.

Transaction Costs:these are Commissions added to transactions on the blockchain.

Return on Investment (ROI): Percentage profit based on your investment. Formula: ROI = (current price of Bitcoin - purchase price)/(purchase price) × 100.

Dollar-Cost Averaging (DCA): this is a Strategy where you invest a fixed amount regularly. Formula: DCA = (average cost per Bitcoin) / (Total investment amount × Bitcoin quantity).

Risk-Reward Ratio: this a Fraction between potential loss and potential gain. Formula: Risk to reward ratio = potential loss / potential gain.
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