You are right. The well known crypto bitcoin has a lot of holders but very few users for small transactions. You just don’t buy your starbucks coffee with bitcoin because of the stupid high fees to do so. I use Monero which is inflationary as each block puts 0.6 new Monero into circulation. However, that is fixed and does not change so the inflation rate trends towards zero. Right now it is ~0.9% inflation per year. Because of this small inflation however, transaction fees stay very low at less than a penny (US). The whole design is around being a digital version of the cash in your pocket and people use it as such. While it still fluctuates quite a bit against a currency like the dollar it is less volitile than other cryptos because it changes hands pretty often. It falls much less than other crypto during “crypto winter” but also does not atain nearly the highs of other cryptos during upswings.

As to your point about backing, at least Monero, bitcoin, etc use proof of work (POW) which requires real people to dedicate real resources to obtain it. I know a lot of people hate proof of work due to its power draw, but its no worse for the environment than say gold mining. So the electricity and hardware that is mining is what backs the currency. It basically is a digital representation of electricity. “here, i will trade you this kilowatt of electricity for that slice of pizza.”