Good point about confiscation (e-gold). What about stability? Without being backed by a commodity, how do we keep the value of Bitcoin stable? Under a gold standard, the stability of the money is pegged to the value of gold.
Stability is relative.
Bitcoin is now unstable (short term) because it has low liquidity and is used primarily as a speculative asset. I expect it will stabilize with broader usage and better liquidity over time as it becomes more and more useful.