TL;DR

New technologies that disrupt established industries are often met with skepticism and criticism. This is because the new technology is often not well understood, and the existing industry is threatened by the new technology. This is a natural reaction to change, and is not unique to crypto currencies. While it is certainly true that there are crypto currency scams, the same can be said about every currency in the history of humanity. The best way to avoid crypto currency scams is to learn about crypto currencies, how to use them, and how not to fall victim to scams involving them. The worth of crypto currencies is highly dynamic and depends on many factors, but it is best to think of their value as a reflection of their potential use in the future as adoption continue to grow.

ELI5

Crypto currencies are a new technology that among many other things allow evil individuals to trick victims into doing things they do not fully understand resulting in the loss of value for the victim. If we remove the evil individuals then all crypto currencies scams disappear. This is why some people value crypto currencies, because they believe that as more people continue to use them, the amount of evil use will shrink or become much more difficult, resulting in the the evil use becoming insignificant and the conventional use becoming normalized.

As a beginner

Scams are a natural part of any currency. The best way to avoid scams is be informed and aware of how scams operate and what signs are recognizable for common scams. Buying something 2nd hand is a common practice and can easily become a scam, but most individuals are aware that they should not send money to a strange without receiving the item first. Why is this common knowledge? Well because the scam became so popular that knowledge about it was distributed en mass and now most people are aware of it. The same is true for crypto currency scams, but because crypto currencies are still relatively new, the knowledge about scams is not as widely distributed or well understood by the avergae individual. Additionally, due to the initial rush to jump into crypto to make a quick buck resulted in many individuals being scammed because they did not fully understand the technology they using and were not aware when a scam was being attempted on them. The more we all learn about how cypto currencies work and how to use them safely, the less likely we will see individuals be scammed.

The value of a cyrpto currency is derived from what it can be used for. In the beginning, a crypto currency's value was completely speculative, meaning that people were buying it because they thought it would be worth more in the future. This is not a bad thing, but it does mean that the value of the crypto currency is not based on anything other than the belief that it will be worth more in the future. As more people begin to use a crypto currencies and as the blockchain industry evolved to support more comprehensive use cases, the value of the crypto currencies became more derived from capability than speculation. There are still elements of economics involved in many crypto currencies that continue to drive speculation (such as maximum supply and deflation), but many core crypto currencies are now driven by their core use cases.

Bitcoin

Bitcoin remains an example of a speculative asset, it is compared as digital gold because individuals invest int Bitcoin to store value rather than to perform jobs with it. Bitcoin was initially intended to become a transactional currency, but due to the high demand and limited supply, the value of Bitcoin has risin quite high (which itself does not affect its transactionality) and the network fee to submit a transaction has grown high enough to prohibit conventional purchases. Beyond these two factors, Bitcoin also has a very slow transaction rate, which is not ideal for timely conventional purchases.

Lightning network

The lightning network is a layer 2 solution for Bitcoin that allows for transactions to be performed off chain and then settled on chain. This solution was born to solve the incompatibilities of Bitcoin as a transactional ledger. This allows for the network fees to be significantly lower and the transaction time to be significantly faster. The lightning network is still in development and is not yet widely adopted, but it is a promising solution to the high network fees and slow transaction times of Bitcoin, and is the most likely outcome for Bitcoin becoming a conventional transactional currency.

Ethereum

Ethereum is a blockchain that was designed to be a transactional ledger. It is often compared to Bitcoin as digital oil because it is used to fuel transactions on the Ethereum network. Ethereum is a smart contract platform, which means that it is designed to allow for the creation of smart contracts that can be executed on the Ethereum network. This is a very powerful feature that allows for the creation of decentralized applications (dApps) that can be used to perform complex tasks without the need for a centralized authority. Ethereum is also the most widely adopted blockchain for decentralized finance (DeFi) applications, which are applications that allow for the creation of financial instruments that are not controlled by a centralized authority.

ERC20 tokens

Ethereum smart contracts operate on the concept of contractual modular interfaces. This means that a smart contract conforming to a specific interface can be used in a common method. One such popular interface is ERC20 (ERC stands for Ethereum Request for Comment, which is essentially an standardized understanding of the Ethereum protocol), which is a standard for creating fungible tokens on the Ethereum network. A fungible token is a token that is interchangeable with other tokens of the same type. If the native Ethereum token is a dollar, then ERC tokens are like Apple store gift card dollars, you can't use them outside of the Apple store, but they have clear value within the Apple store. ERC20 tokens are the most widely adopted tokens on the Ethereum network and are used for many DeFi applications.