I just started investing a small bit into crypto myself. I figured if I have some skin in the game then it would incentivize me to spend more time learning about this, then I'll invest a bit more as I learn more.
You picked a relatively decent time to invest as most tokens are down pretty low just now. I suspect a few months from now, they will have bounced back and you'll have a decent return!
I get how the tech works and the purpose of crypto on a basic level, but I suppose what I'm unclear about is why are there all these different coins and what causes their price to go up and down?
There's a few reasons. For one, different coins exist to serve different ideologies about how crypto should work on a technical level. For instance, Bitcoin Cash exists because people were concerned that the original Bitcoin wasn't scalable enough. There's also low-energy coins like Tezos, or coins which prioritise anonymity like Monero. Anyone who has a certain philosophy or special use-case for crypto usually has a coin that can cater to them.
But it's also important to remember that literally anyone can pretty easily make a cryptocurrency. Lots of the technology is open-source so it's easy just to make an re-branded offshoot of an existing one with minimal effort. Some people see this as a 'get rich quick' scheme where they create a worthless coin, pre-mine a bunch of it, articially inflate it's value by hyping it up online, and then sell it all just before it collapses again. (See the SHIBA INU example in the post above)
Prices go up and down because crypto is just a volitile thing. Unlike the stock market, trading doesn't close, so transactions are taking place every moment of every day. This combined with the fact that just now you have some of the richest people in the world as well as multiple global news outlets either hyping up, or downplaying it, prices swing quite dramatically at a rapid rate. There are lots of eyes on crypto at the moment and everyone ones a piece of the action.
If that's the case, I imagine there would eventually be some sort of standardization and the coins that survive will be the ones that are the most functional and widely adopted? I get that there are a bunch of variables, like which countries and financial institutions partner with which networks, so I can see the use for up to 100 coins or so, but can't imagine that thousands upon thousands would be viable.
Yes and no. It depends what you mean by standardization really. I agree that in a future where crypto becomes a legit mainstream alternative to Fiat, only one or two coins will really be relevant. But outside of the mainstream, the number of coins will always continue to rise.
Also, for the coins that work as a direct intermediary (Fiat Currency -> Crypto Coin -> Different Fiat Currency), why would the crypto coin have fluctuating values if it instantaneously converts back to a fiat currency?
Can you give an example of this? I can't think of any coins that exist solely as an intermediary between different fiats. Are you thinking of stablecoins (which are crypto tokens who's value is tied to fiat currency - for instance USD Tether)? They exist so that you can hold your finances on the blockchain without having to worry about the volatile price swings that come with traditional coins.
Regarding NFTs, it's just way too out of my wheelhouse and I don't have enough money to take a chance at trying to invest in these, but here's a video I came across that tries to explain why people try to put value on these things. I suppose I get what he's saying but I feel like it's super risky to treat like an investment.
Some enthusiasts would call this a hot take, but I'd stay away from NFTs. I don't particularly see a future in them, at least now how they're being used just now.
Hope that's answered some of your questions! Feel free to let me know if you have any follow-ups. I work in crypto, so I'm always happy to be talking about this kind of stuff!