See, calling it Tulip Mania? You are at least in the ballpark. And frankly yes, a lot of cryptos are Tulip Mania (notably how NFTs were used). But Tulipmania is far different than a Ponzi scheme.
Anyway, figured I'd type up a quick primer on what crypto actually is:
The way to think of the blockchain is really as a ledger. It's a ledger where anyone can write in it according to the rules of the ledger, but you can't edit or change what was written before. (Technically there's wrong stuff there, in fact a lot of technically wrong stuff there, but this is trying to get across the basic idea and is accurate enough).
Bitcoin was the first such ledger, and in it, it had tokens. These tokens were fungible, and are given to users. Each new block in the chain is an entry in the ledger, saying who gave how many tokens to whom, and also the author of the entry can give himself some set number of new tokens for making this entry (that's the mining). The point of the mining is to incentivize people doing enough computational work to write new blocks, and thus allow transactions.
The key thing is that there isn't anything special about the Bitcoin ledger. The rules are very simple, but it's very easy to just start up a new ledger with the same rules. And this is what shitcoins are. Copies of the original. There's in truth no scientific difference between a shitcoin and a bitcoin, but there's an enormous economic difference. The economic difference is that people value bitcoin. It has subjective value, and the subjective value is what matters. Quite frankly, gold has not a huge amount of practical value either. You can do a lot more useful things with bronze or iron. Most of gold's value comes from gold being perceived as valuable. Welcome to subjective value.
Now why are some other coins useful? Two reasons: a few are actually backed by money. This is rare, and honestly not too trustworthy, but occasionally works. The second, more important reason? The rules of the ledger. You can design a really cool ruleset which allows for a lot of different things, with Etherium being the most prominent example of this, with one of the most complex rulesets, allowing for computation and complex stuff like smart contracts (effectively an implementation of a legal contract into code, that automatically does what it is in the publicly available code, and can cause money to change hands without requirement for a third trusted party).
What's an NFT? Literally what it says, a non-fungible token. It's just a string of numbers and letters on a ledger that can be traded between people, same as a cryptocoin. The only difference is that the NFT always stays separate (your account won't say you have 5.4 NFTs, but instead say you have NFT#1, NFT#2, etc). Why is this useful? Well, not for laying claim to some sort of digital art, that's for sure. What it could be useful for is linking an NFT to a real world document, like a land deed, or ownership of a IRL piece of art.
Now let's combine this altogether in an imagined crypto society. Say you were looking to buy a house in a specific neighborhood, and were willing to offer ~$400k cash in hand for it, but only if the deal is made by the end of 2023. You'd create a smart contract that can automatically transfer 200 ETH (1 Etherium is about $2.3k) if any of a certain number of specific NFTs are transferred to you prior to Jan 1 2024, each NFT listed being a land deed for an acceptable house in that neighborhood.
Now if someone wants to sell their house for that price, all they need to do is transfer the NFT. There's no need for a third party notary. No need to travel. No need to get government approval. No worries about theft or someone trying to strong arm the other, as there's no need for the two of you to even know who the other person is, much less meet.
Obviously, I've elided over details there, like legalities etc, but this is the basic idea of crypto: easy transactions.
Now one big question is who gets to control the rules of a ledger, and here's the big difference between crypto and CBDCs. In a decentralized crypto world, there's effectively 'voting' on rule changes, which are notoriously hard to do for non-shitcoins. For a CBDC? The creator always has complete control. The ledger was never actually decentralized.
