Definitely you are right, This is absolutely paper money, but you can use them unlike stocks. Crypto works like this, for example steemit, you need steem to use steemit to promote something. So even if the platform goes down you can still use steem.

And if you think about it, whats not paper money? Even real estate is paper money, if no one is willing to pay the price you ask, you are stuck with the property.

But to avoid major catastrophe always cahs out the initial investment. It solves all your problem