It is not necessary for a freeroll to have its prizes in cryptos, for that the rooms have cryptos as a withdrawal method. If you want to deposit or withdraw using this method, I recommend a room that has them available
It will make the situation more complicated, because they are not so much in use yet. It would be interesting, because it is a new kind of currency. If the exchange methods become easier and more practical it would be a good option.
Any prize is good with me. Danger with Crypto is the volatility. The value of the prize can move 10% or more if it is determined a week before the tourney.
I do not think so. Given the volatility of cryptocurrency markets, you can both make a profit and make a loss. This is a risky asset. But in most cases you can use cryptocurrency to withdraw funds.