1. There's no problem with "backing". Gold is backed by gold. Bitcoin is backed by Bitcoin. Bitcoin is not broken while being in the open for plenty of people t

1. There's no problem with "backing". Gold is backed by gold. Bitcoin is backed by Bitcoin. Bitcoin is not broken while being in the open for plenty of people to exploit it. Just like anyone interested may try to synthesise gold at a cost lower than the market price. 2. Every early venture is also very volatile. Facebook, Twitter, Google, the web itself and the internet were volatile in the beginning. A lot of uncertainties, legal issues, security issues etc. Only when they reach half of the potential market, they start looking stable and glorious. I bet when gold was started to be used as a currency it was uncertain, competing with previous currencies and prices were fluctuating a lot. 3. Bitcoin can't be suddenly worth 1$ tomorrow for economic reasons. Only for technical reasons (but then it is more likely to become worthless). Economically, no big holder of bitcoin is going to crash the price by cashing out publicly if there is a way to sell steadily and/or privately. Which happens already. SecondMarket's BIT gets all its coins and money purely privately, without anyone noticing much changes. Since almost no one is holding Bitcoin-denomitated debts, no one is hurt by having Bitcoin price rising unexpectedly. It only boosts interest. So if it stays around $430 for the months or grows to $1000, no one will be hugely disappointed. Even if drops now to $300, only a fraction of holders will suffer losses, while majority of others is still well in profit.