No problem! Just to clarify some slightly ambiguous wording that I used:
Counter goes up to eight small dots, then resets and you get your first badge to give for people's contributions.
It resets back to 1 and then starts counting up again. The badges are cumulative and you can have more than one to give away at any time. A badge that you might receive from someone else is not added to the number of badges that you can give to people. These are in separate pools. Also, you are not required to give this badge away in order to get all the benefits.
Sorry about the possible confusion that I might have caused. I'm not a native English speaker. Sometimes even I get confused when reading my own posts. ;/
Here are some posts that might give you more background on the system if you are interested:
It's a good idea to follow #hubski tag to be up to date with updates. These aren't frequent but since it's a small place there's usually some discussion. We are big on vox populi. ;)