They're a horrible, misguided, ultimately destructive distraction. You cannot "back" a crypto-currency and still have it retain the primary feature which makes the entire thing interesting/valuable: decentralization. If something is "backed" by something else, that necessitates some entity to guarantee the backing/redeemability/etc. All crypto-backed coins are therefore just centralized tokens with a blockchain thrown in; either to confuse people into thinking they're something new, or because of a genuine misunderstanding of what decentralized crypto-currency is all about.

Backed coins will eventually fail in one of the ways every prior attempt at non-decentralized digital money has failed, not least of which is the single-point-of-attack for governments (see eGold).


And in this particular case, the project seems to have ripped off the domain name for my site: spotcoins.com