PS3 USB Modchip Claims To Be Able To Backup Games

A USB modchip has surfaced that claims to allow PS3 users to backup their games to external storage devices. Aside from that, it even allows users to play games without the need for the original disc. Could such a device create a piracy issue for Sony to deal with? A video (after the jump) currently seems to prove that it works, but skepticism still remains, so it looks like we’ll have to wait and see if this USB modchip actually does what it claims to do. What’s your take?