Bitcoin...What I Know Of It

I've been hearing a lot about Bitcoin over the last couple of years, and I'm still not sure what to think of it, though its popularity seems to be waning. It's rather hard to tell, though, because for every story claiming Bitcoin's eminent demise, there is another debunking it. I'm on the fence about a digital currency whose value appears to be rooted in it's novelty, rarity, and inherent decentralization. I'm distrustful of any currency that is not backed by something tangible, though in that regards it is probably on better footing than the US dollar. Perhaps through the adoption of crypto-currencies, central banks will be forced to change their methods and actually back up what they print. I have to admit I'm somewhat leery of a currency that exists only in cyberspace...I still like to have something in my hand I can feel. There's also the threat of it being a new way to fund illegal practices given its deregulated nature. I'm still a little unclear on how bitcoin transactions are traced and authenticated. I'd like to see the success of Bitcoin and its ilk if for no other reason than to force a change in banking practices and a move back to currencies backed if not entirely by precious metals, then at least tied more closely to GDP. Perhaps that would help rein in some government spending in a way that was not previously possible.