What I don't understand about crypto currency is that one, there are no real life applications (yet) and two, there are too many currencies available.

From buying houses, booking flights and all the way down to the basics, ie food, you can live a life away from the traditional (failing) fiat currency/banking system using cryptos.

I'm prepared to believe that there may be a place for cryptos in the future however I believe it would only be two or three at most that become mainstream.

There's good use for many, but not quite the 2,000 ish currently in circulation. Picking the right ones is the tricky bit.

How these currencies became valued at billions of pounds when they have no use is beyond me.

See above.

We have chosen to place a value on them but nobody knows why that was.

Because the inflationary nature of fiat currency that ultimately robs us all and has led us, aided by the owned political elite, to where we are now. Potless.

Bitcoin, for example, is deflationary as there will only ever be a finite amount produced. The market, us, will dictate it's value. This is fundamental to any economical system.
Fiat currency however is inflationary as it can be constantly printed (from thin-air) and pushed into any given system causing more of the currency needed this year to buy the same as it would have last year. We are constantly asked to pay more (taxes) for less services. This is proof positive of a constantly devaluing currency. People really need to understand this!
Our grandparents were better off than we are today because our currency was worth more then than it is now. They could happily live an average life on one average wage. This is virtually impossible today due to the inherent inflation of the currency, chosen NOT by you or i, but being forced upon us...............for the benefit, as ever, to those who govern.

Fiat has robbed us all for decades but is now dying. Time to look to the future peeps.

I'm sorry, but I really don't get how this is going to be a good thing.
Surly, if there is only ever going to be a finite amount of a currency, it leaves it open to manipulation.

You've lived your life with manipulated currency bud.

When currencies were pegged to Gold the amount of printing from thin-air was limited due to amount of real money, ie Gold, that secured/insured any amount being printed (from thin-air). Since the end of Bretton Woods in 1971 this 'ideal' has basically turned to rats***. Due to the currency being backed by nothing, we've suffered the inherent inflation since of around 1400%.............and are living the trouble this stance has brought. But the elite are enjoying it.

What if someone, or a group decide to hoard bitcoin, the price of what's left will inevitably go up, conversely, if someone dumps a load onto the market that would force the value down?

See above.

Maybe I can't think outside the box, and am destined to be a skint wage-slave for ever!!

A debt-slave bud, paying a debt that can never be repaid to an imaginary bank that prints imaginary currency from thin-air WITH INTEREST ADDED........and every politician goes along with it.
It'd be funny if it wasn't so truthful.

Huge falls today across all currencies. Litecoin in particular which has lost over 11% of its value.

Difficult decisions now for coin holders. Do you bail out now or stick and hope they eventually rise again one day.