True but sad. The major problem I see with crypto currencies is...

True but sad. The major problem I see with crypto currencies is that they are a purely notional expression of value. They have no physicality and are not tangible. Your story highlights the major problem with something which is only a concept and that exist as nothing more than electrons secured by an algorithm.
Gold, on the other hand, is tangible. It has physical reality which has a minimum value as expressed by the cost of production. The base price must include such costs as equipment, labour, land costs, smelting, transport, taxes etc. The additional premium it has comes in the form of desirability, demand and acceptance as store of value.
Cryptos lack these elements and that is their inherent weakness.p