Crypto is arguably the most volatile asset class in the world – but in a similar vein, it’s also the most profitable.
And because of how profitable it is, it has tempted many beginners to make forays into the market in a bid to multiply their capital multiple folds.
However, while crypto’s volatility directly translates to a lot of money-making potentials – it is also a strong double-edged sword, as volatility makes it incredibly easy for beginners to lose money and make a ton of mistakes in the market.
Mistakes Every Beginner Makes
The very first mistake is trading with money you cannot afford to lose. Many experts and beginner crypto traders lose a ton of money on a handful of trades. While it’s normal to make mistakes as you start your cryptocurrency journey, this mistake is so fundamental it may cripple your trading life and the life you had before you even began trading as well.
Your preferred trading platform can also constitute a mistake in and of itself. That’s because some trading platforms lack adequate security, possess high fees, and boast poor withdrawal times – hence when you kick-start your crypto trading journey, you’re better off picking a trading platform that offers low fees and has had zero security issues in the past.
Let’s say you do get things right, and you manage to start trading. You would still need to diversify your portfolio. But picking secure virtual coins according to what strategy you choose might be difficult without some sort of personalized guidance.
The Solution: Walled Gardens
Have you ever played an open-world video game that is not really ‘open-world’? While you can move around and do what you like, the game stops you from going to places that you aren’t yet ready for because your level is too low, or you just haven’t crossed certain milestones yet.
This concept is synonymous with the general walled garden principle. It aims to restrict the users’ access and media information, limiting novice traders to only relevant aspects of the platform.
Walled garden, as a technological term, was coined by Tele-Communications Inc. founder John Malone. Since then, many fields have adopted this concept–especially educational institutions that use it to stop students from browsing inappropriate websites. Instead, it typically works with a lock and key type of mechanism, allowing only authorized users to get past the gates.
In crypto, a walled garden is a secure and singular platform that buyers and sellers can come to and exchange currencies. Who can access these walled gardens are controlled, and it gives the controller more precision over how trades and payments are managed.
Unlike a normal platform, a walled garden platform will force its users to use only the features available on that ecosystem, ensuring predictability. However, the admin may add as many cryptocurrencies and features as needed on the platform.
Advantages to the End-User
As stated above, the many problems, the bane of many new traders is “choice”. With a more enclosed system, traders can properly be guided into what they should be doing. Also, since cryptocurrencies are very volatile and decentralized, it may be difficult to the untrained eye which one will be accepted by the authorities.
Standard walled garden platforms fix this problem, streamlining your choices into a verified cryptocurrency that you know will surely be useful.
Goaded by the stories of some coins spiking in value, many new traders jump on the bandwagon of altcoins because they are cheap. However, the reality is that some of these may be scams, and many of them hardly develop.
Walled garden platforms, by their very nature, take away many of these problems for the new trader. This ensures a scam-free environment for traders
Potential Drawbacks
While a walled garden ecosystem can be great for beginner investors, eventually you will want more freedom to trade and spend your cryptocurrency as you wish, without any restrictions. One of the major appeals, and in fact the driving philosophy behind cryptocurrency is the notion that you completely own your crypto wallet.
In a walled garden scenario, you technically own your cryptocurrency and can trade it with other users of the platform, but this sort of defeats the “wild west” philosophy behind cryptocurrency.
Walled Garden Examples
Paypal
Paypal offers a closed ecosystem based on Coinbase. They manage cryptocurrencies in a way that users may only use them for online shopping. Therefore, PayPal customers can use their coins to pay for items offered only by affiliated merchants. With this system, PayPal has recorded a growth in people using crypto to make payments since it makes it easier to make payments.
eBay
eBay also has plans to create its own walled garden. It will be their way of tapping into crypto since they left Facebook’s Libra project. It looks like eBay wants an ecosystem that can handle crypto payments while limiting how and where they can move their crypto. At the same time, the eBay market structure offers such diversity that it will facilitate rather than restrict.
In a recent interview, Jamie Iannone, CEO of eBay, said that the company would be exploring new methods of payment by March 10.
Amazon
Another potentially immense crypto walled-garden behemoth is Amazon–should it choose to tap this potential. Amazon is the top retailing choice in the world, standing at the forefront of consumer trade.
If Amazon creates a walled garden that links the consumers with select merchants and wallets, the effects of this could be game-changing. As it is, Amazon already serves as a framework for the prevailing crypto world. And Amazon Web Services carries 25% of “all Ethereum workloads in the world.”
Some prospectors guessed that Amazon would have already keyed into crypto payments as the year began. It is only logical, as doing this could make (or save) Amazon millions, reduce credit card chargeback, and make transactions generally safer.
However, things might be a bit slower because Amazon might launch its own cryptocurrency rather than adopt another one. Moreover, since Amazon is already well-known and trusted, with hundreds of millions of loyal users, creating a cryptocurrency based on the value it offers will be the best financial course of action.
Investment Advice
As such, walled gardens are a rising opportunity for investors, and understanding the safety and security they provide is the key to spotting them and hedging your bets on them. While you can invest your money, using a service like SoFi, you can also invest your time and learn all you need to know about trading in a walled-garden ecosystem.
This makes you part of the rising cryptocurrency trade in a novel and controlled way.
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