Schiff, with his PR campaign quote and others is speaking a language that does not even make sense. The fundamental problem is you can't talk about cars using a horse-and-carriage conceptual framework.
His insistence on "cashing back" to dollars ignores the exchange rates and capital controls when sending money between countries. Also with gift cards you can buy at Whole foods, Target, and 1000s of other stores, and actually buy the cards a few % UNDER face value because there are no credit card fees to the merchant.
His complaints about volatility hampering transfer ignore Bitcoin's age and its upwards trend.
WRT backing, gold is not backed either (it is its own backing). It rose about 10x in 10 years. In 10 more it could fall that far (just like bitcoin could fall). Schiff is "afraid" for all the poor investors? Its not stopping him from peddling his favorite commodity during its peak and even now when its price in dollars is plummeting.
A gold backed digital currency made sense when Bitcoin was worth nothing. It would have bootstrapped the currency. But given that it has a price, physical backing becomes counterparty liability. In fact, Gold has very little utility supporting its price, what it has is a lot of history. Bitcoin's worldwide transfer network has huge utility supporting the price, but Bitcoin has very little history.
If someday Bitcoin's value is diluted by 100 other popular virtual currencies, digital currencies will clearly have been a roaring success. A rising tide floats all boats.
This is not investment advice, I am not your investment advisor.