Bullion backed digital currency will work?

[ihatesilicon]

Wondering if there is a need for a digital currency to be backed by anything like bullion. XNF-NoFiatCoin may be trying something which non of the existing crypto currencies have explored. XNF is backed by bullion which people can redeem. XNF is traded on Ripple. But the question remains same, Is there actually a need for a crypto currency to be backed by something?

 

[ihatesilicon]

Value of XNF has increased over 300% within a month which is a remarkable achievement but I wish value will be sustained and won't be volatile as in case of some digital currencies around.