There IS NO NEED FOR CRYPTO. TAKE YOUR MONEY OUT BEFORE TOO LATE

Booooooooooomer alert

oh shit we have a crypto forum now, thats cool

1. Their utility, adoption, and reliability. It's common knowledge which coins are reliable and which aren't
2. Exchanges' smart contracts are open source, wallets are unhackable 
3. The same ways one protects against volatility in anything? 
4. Never unless they make their own
5. All transactions are recorded on the blockchain's ledger, you can look up any wallet and all its history
6. For most people a google search isn't too much even if it is for you
7. Shitcoins are the ones with no utility 
8. Stablecoins are pegged to USD, others are pegged to themselves
9. It isn't proof of stake is replacing proof of work for everything but bitcoin. And Bitcoin's environmental impact is massively overstated 
10. No third party holding in escrow so transactions are almost instant and not retractable, anonymous but recorded, supply is not inflationary or controlled by any government, p2p transactions easier

Ok. I'll bite. I'm a moderate crypto enthusiast... I'd like to think I'm in the middle. There are some crypto-bros and boomer old school finance people that are (too) hard core in their opinions on both sides. Let me try to be a bit dispassionate:

MY Cypto CV: I've gotten into crypto lately as a hobby (more from a computer science/engineering side). I personally have a farm of rigs at just shy of 1 GH/s mining ETH (for now, until PoS... then we'll see). Using over 10 GPUs that are a mix of NVIDIA and AMD. Primary algoirthm: daggerhashimoto.

1. Crypto like BTC and ETH (the two largest) actually have "industrial applications". To use a mining analogy, think of them as PGMs like platinum and palladium. They are valueable, both as a store of value as well as a "material" that is needed for Web3 like defi etc. (you'll have to read up on/Google this yourself. This would take forever to explain here)

2. This is my biggest legit concern. The very thing that makes crypto attractive as a relatively untracked, noninstutional "free(dom)" currency is the same thing that gives it geniune concern in my view. The idea that so many people are investing in technology that could disappear at any minute. I know this isn't perfect, but imagine crypto as cash. You put it into the bank because you have supreme trust you will get it back.

3. Nothing. Same way I protect myself when buying stocks and bonds. Homework. And crypto, as you can rightly imagine, is the worst for this. The "market" is all over the place with many actors who don't know what the F they are doing. There are a lot of "I don't actually know what I'm doing/I think I can get rich quick" voices here.

4. Respectfully, I think you are asking the wrong question here. Here I'd use the analogy of crypto as the currency of some random country you've never heard of. Sure, it's valuable, highly volatile and could appreciate or depreciate at the blink of an eye. Just because it's a currency doesn't mean major central banks need to/care to "endorse" it as a part of their monetary policy frame work. What you should be asking is if there will be a greater market demand for use of it (beyond as a store of value and its inherent "industrial applications") - what I mean: Can buy something with crypto? And I don't mean like a Gemini Visa card where they take your crypto, sell/convert to cash, and then pay. I mean transactions entirely in Web3 completely avoiding traditional finance infrastructure.

5. This one is surprisingly easy. Anywhere you trade crypto, they track it the same way you trade stocks, except you get a Form 1099-MISC instead of a Form 1099-INT. What did you buy at, what did you sell at, how do you get taxed? Ask your accountant.

6. I don't. I don't move the market, I participate in it. Different investment profiles/thesis for different investment objectives. It's something else to invest in that you should at least look at. Like any other investible security/asset.

7. See #1.

8. Not relevant. See #4.

9. I would debate that this is untrue. For example: at current difficulty, it takes about 20,000 kWh to produce one ETH (deliberately stated as kWh and not TH). Note this is based on TDP only: excludes CPU, 80Plus rating loss, other infrastructure costs and "Rule of 80 usable kWh at-the-wall" (power lost through transmission). These My personal stats. "If my math is right (and it always is)" ~Tony Stark. YMMV greatly depending on hardware, cooling environment etc. 

The process of creating the ETH through PoW validates transactions on the blockchain. But that's it. No paper/cotton for bills, refining of ore to make coins.  I would argue the resources required to make traditional currency are also pretty resource heavy (the old story of a penny costing ~2 cents to make). But in all fairness I haven't done the full apples-to-apples analysis, but my gut instinct is that this is less resource intensive. I could be wrong.

10. When I was younger, I like to collect coins for different countries. I just thought it was neat how different people used different forms of money. My nostalgia aside, it's something else to invest in, learn about, and try to understand. Part of my interest is that I feel like this is one of those "new" things young people get that old people don't fully, and I find it to be a nice academic endeavour. It's one of those things where I feel like it's a "science project" that can have real life busineess applications - things that are not yet real, but could be (and highly profitable) very quickly from an applications perspective.

Epilogue:
Would love some comments. I got into this as an academic exercise/hobby that is mildly profitable. At current rates, I mine at profit margins of ~20%. At the height of their peak prices, my profit margin was as high as 50% with a payback period (for the equipment) of ~2 years.

Am I getting MS because I wasn't PC enough in my response to Certified Investment Banking VP?  

How big is your short position? Oh right you don't have one. When you lie and say you do have a short position, well then you just answered your third question in your post all by yourself. Proud of you. 

OK Klaus Schwab

It's evident from the questions you ask that you haven't done an ounce of dd in the space. And when users above try to give you answers, you berate them. What's wrong with you

Any Russian right now would have been happy to have bought bitcoin even at the 60k highs of last year. Still would have been a better off after considering today's 30% devaluation and the additional 10% or so devaluation since the last BTC all time highs. 

Have been DCAing into BTC since 2016. There will be volatility, but that volatility is slowly decreasing (along with the returns) over time. Best asset to hold for the long term as fiat will continue to be devalued.

As for alts, I can't really comment. Lot of alts from 2013 and 2017 no longer exist or are abandoned projects. Good for short term trades, but questionable for decade long holdings periods. 

I honestly don’t know a ton about crypto, but I’d refrain from making negative statements about crypto because most young people (which is the majority of this site) get really triggered if you diss crypto. I assume most younger folks are heavily invested into it and want it to succeed, so they will MS you for talking negative about it. 
 

with that being said, I don’t think crypto is the best medium of exchange. I think it serves a purpose for those who travel abroad or want to have more privacy from the government. Avoiding exchange rates overseas is a huge benefit. I honestly think nobody even knows 100% what drives crypto prices and whether or not it will work. It’s still very early. The “why” is there- a decentralized currency that you can use digitally without trace. But there’s still a lot of scam, pump and dump, volatility etc that plagues the crypto market. I think everyone wants to find the next Bitcoin and become a millionaire with a $100 investment, but that’s probably not going to happen unless you have some insider knowledge or create your own coin. I think the accessibility of crypto is also it’s downside. The fact that anyone can just create a coin ends up ruining the quality of crypto that typical fiat cash currency doesn’t have to deal with. 
 

I’m kind of just sitting on the sidelines to see how this plays out. If it works and becomes main stream and the government doesn’t over regulate it then I will be more than happy to adapt it. If not, then we just move on from it. 

.