How would you solve volatility problems in new currencies? Backing it with something?
Volatility decreases the more people who use it. You can see it clearly in the fiat world - the small no-name currencies can move wildly (which is why most of their govts opt to peg them to the dollar). The huge liquid currencies move by perhaps 1% a day, it's a big event when it moves by double digits
After Brexit the pound moved by 10% and the entire planet was having hysterics about it, because it was such a rare event.
In that case we'd need Bitcoin to become as used as USD in order to become stable? As it's decentralized it can't be stabilized by any institution like governments...