So one day not so long ago, says Neil Urquhart, a man walks into the shop. Gordon & MacPhail's on South Street in Elgin, in Moray, opened in 1895. A temple in the world of malt whisky. More than 1,000 varieties, pretty much every scotch currently available in Britain, plus some that aren't, at least not anywhere else.

Anyway, says Urquhart, who was working in the shop at the time, the fourth generation of his family to join the firm, this chap walked in, more or less off the street: "He knew what he wanted, mostly. A specific Ardbeg, an older Macallan. I steered him a wee bit for the others. He bought four bottles of whisky. For £20,000. He was Taiwanese."

Connoisseurs will come in here, says David, a third generation Urquhart, standing in said shop – a solid, reassuring sort of place in a solid, reassuring sort of town at the top of Speyside, home to half of Scotland's 100-plus whisky distilleries – and every month, some of them will drop £5,000. "Nothing," he says, "surprises me any more."

It would, I think, be hard not to spend money here, if you have it and you like whisky. There are your staples, naturally, your Glenfiddich 12-year-old (the best-selling single malt in the world), your Laphroaig 10, your Glenlivets (the biggest in America, and world number two) and Lagavulins, your Taliskers, Glenmorangies and Cardhus, mostly around the £25-50 mark.

There are more unusual whiskies, from distilleries you very probably have never heard of: Caol Ila, Mortlach, Auchentoshan, BenRiach, Pulteney. There are single-cask bottlings, taken from (as the name implies) one, rather than – as is customary – multiple casks from the same distillery, "vatted" together and married. There are powerful cask-strength bottlings. There are exotic finishes, when a whisky has spent a bit of time in a barrel that once held port, madeira, rum or Italian red wine.

There are bottles at £200, £350, £400. There's also a 55-year-old Dalmore, for £7,700. And on a pedestal in the middle of the room, with a price tag saying £13,000, there's a bottle of 1940 Gordon & MacPhail Glenlivet, one of only two 70-year-old Scotches on the market (the other was a Mortlach 70 the company launched last year; at just £10,000 a bottle, it sold out within a fortnight.)

There are, it seems, plenty of people who have money, and who like whisky. Not least outside Scotland: according to the Scotch Whisky Association, its members sold enough of the amber nectar last year to add a heartwarming £3.45bn to the value of UK exports – 10% more than 2009, and 60% more than a decade ago: every second, £109 of Scotch whisky is sold.

Scotch has become a multi-billion pound, global phenomenon. A whole world of its own, of books, magazines (Whisky Magazine, Whisky Passion, Malt Advocate), websites (dozens of them, from maltmadness to whisky- intelligence, spiritofislay to whiskywhiskywhisky), of festivals from Speyside to San Francisco, Stockholm to Singapore. Names such as Dramfest, Whiskygalore, Maltstock.

Its own experts, too: maltheads, whisky geeks. They rival anything the wine world has to offer by way of rarefied prose: the Malt Whisky Yearbook describes Ardbeg as "soft peat, carbolic soap and Arbroath smokies . . . with a touch of liquorice", and Glenlivet as "freshly chopped apple, rhubarb and gooseberries". Talisker is "grilled oily fish in lemon oil"; Benromach "wet grass, butter, ginger and brittle toffee" followed by "lemon custard creams, apricots and pine table polish".

And there are bars that specialise in nothing but. In Craigellachie, a few miles south of Elgin, Duncan Elphick, genial proprietor of the Highlander Inn, and his expert (if somewhat unlikely) whisky manager, Tatsuya Minagawa, offer 280 different whiskies by the nip, plus a menu of six-snort Tasting Trays with names such as Highland and Islands, The Balvenie Vertical Flight, Some Great 18-Year-Olds, Aperitif Malts and The Ultimate Tour of Scotland (at £136).

"People come here," says Minagawa, who himself came to Scotland from Japan years ago now, "from everywhere. Absolutely everywhere. Aye." (He really does say "Aye".) "Scots, obviously, and English. Also Germans, Dutch, French. Scandinavians, hugely knowledgeable. Americans, lots; Canadians. Japanese. Taiwanese, now. And places you don't expect. There was a Czech guy in the other week, knew more about Scotch than most Scots."

All a long way, really, from the small stone cairn at Upper Drummin, in the hills above the valleys of the rivers Avon and Livet, which marks the spot where in 1824 one George Smith built the distillery that's now widely considered the cradle of the modern industry (though not by everybody. Age and tradition are valuable commodities in single malt-land; the longer and better your backstory, often, the bigger your sales).

At any rate, Smith, third of seven children, banged in an application to build a distillery within months of the 1823 Excise Act that made the whole business legal. "It's safe to assume he learned it from his farmer father and grandfather," says Ian Logan, an international brand ambassador for Glenlivet, now owned by French drinks giant Pernod-Ricard.

"Illegal stills and whisky smuggling were everywhere, had been since the 15th century, doubtless before. They earned cash in what was often a hard existence. It was quite sophisticated, organised networks, long-distance signals for when the soldiers were spotted, all that. Quite a game. People would tell Customs about an illegal still, but only when it was worn out. That way they could buy a new one with the reward."

We're standing by Smith's cairn, looking down the hill. Below is today's Glenlivet distillery, a monument even in a region where big distilleries are two a penny: rows of long warehouses holding tens of thousands of maturing barrels; a visitor's centre welcoming 45,000 people a year; a spectacular £10m glass-and-timber extension opened last year. With just 10 people involved in each actual production cycle, Glenlivet could now produce, should it so wish, 10m litres of whisky a year. ("Think of it," says Logan. "Those guys can go on holiday almost anywhere in the world, walk into almost any bar, and see something they've made. Amazing.")

Like many things, Logan says, making whisky isn't particularly difficult; making good whisky is – very. First, you malt your barley, soaking it in water and then drying it. (At Gordon & MacPhail's pretty little Benromach distillery in Forres, Speyside's smallest, Sandy Forsyth, 40 years in the business, explains that it's the peat used in the drying that gives some whiskies – from Islay, for example – their characteristic smokiness.

"The nose and the taste will actually change depending on where you cut your peat from," Forsyth says. "Peat from down near the shoreline will produce notes like iodine, TCP. Laphroaig's character, that's from the seaweed in the peat. Speyside whiskies are fruitier. Unpeated.")

Next you crush the malted barley in a mill: "Like taking the wrapper off a candy," says Glenlivet's Logan. Then you mash the grist, adding hot water and stirring until the starches turn to sugar. Then you pump the resulting liquid, called wort, into a large vat called a washback, and add yeast. Sugar turns to alcohol.

Last come the stills, shapely affairs of shining copper. The new still room at Glenlivet is a soaring, almost church-like space, all lofty ceiling and plate- glass windows overlooking the valley. ("It does," agrees Logan, "feel a bit religious. In fact, the production manager's daughter got married here.") Stills work in pairs. In the first, you heat what comes out of the washback until the alcohol rises as vapour (or the whole lot can simply froth over, ruining everything. "Do that once," says Forsyth at Benromach, "and you might survive. Twice, and you'll be rolling casks in the warehouse.")

In the second, or spirit still, you reheat what comes out of the first. The early product, known as foreshots or heads, is no good. Nor is the stuff that comes out towards the end, known as feints or tails. What you're after is the heart or middle cut, and where you take it will determine the character of the whisky as surely as the cask it's matured in. Forsyth splashes a little on to the palms of my hands: rub and it smells of pure alcohol; let it dry and it's woodsmoke and fresh-cut flowers and, well, whisky.

"It's like doing a jigsaw," says Ian Chapman, an associate director at Gordon & MacPhail, which reopened Benromach in 1998, some 15 years after it was closed by the previous owner during an industry-wide slump in the 1980s. "When you're putting together a whisky, every tiny little thing counts. The barley, the water, the yeast. The timing. Wooden or steel washbacks. How you heat the stills. And, of course, the cask."

Whiskymen love their casks. To be called Scotch whisky, the spirit must be matured in oak casks for at least three years. A whisky's quality is determined by the quality and type of that cask. The quality and character of the spirit and the time spent in the cask count too, but less so. Used and re-used, every barrel (Scotch distillers use mainly charred American bourbon casks, plus some Spanish sherry casks) affects a whisky differently, adding and subtracting and intermingling flavours, aromas, colours.

At this point, it has to be said, the overwhelming majority of whisky distilled in Scotland will be mixed, either with other single malts or – much cheaper – with whisky made from grain. These are blends, your White & Mackays, Dewars, Ballantine's, Johnny Walkers, Chivas Regals and the rest. Some are very high quality, aged drinks, others less so. But in any case, 90% of the Scotch whisky sold around the world is blended.

Single malt, virtually unknown outside Scotland until the early 1960s, when it was floated almost as a gimmick, may be sacred among connoisseurs in mature whisky markets, and status-seekers in newer ones, but the real volume in whisky is blends. "They'll be around for a long time to come," says Campbell Evans of the Scotch Whisky Association. "The economics of the distilleries rely on them, and they're the way people get into Scotch, often mixed, with cola in Spain, green tea in China."

So why has Scotch exploded, to an extent no other spirit has? It got a kick start when the phylloxera pest hit cognac and the Victorians had to find a substitute for brandy. Empire, then the Commonwealth, helped it along. But the biggest consumers, in value and volume, have long been the Americans, worth nearly £500m, and the French, who get through about 180m bottles a year. And these days the fastest-growing markets – and those, says Evans, with "huge potential" to sell more – are Brazil, Russia, China and India. Last year they imported an average 35% more than the year before; India is now the world's biggest whisky market, but most of it is locally distilled, and import duties on the genuine article, though falling, are still prohibitive.

For Logan, Scotch is, along with champagne, "one of the most aspirational drinks in the world. In lots of countries, it's a sign that you've made it, and you want to share that, and show it." Michael Urquhart, joint managing director of Gordon & MacPhail – whose independent bottling business, which has matured and bottled whisky from some 70 distillers for more than a century, saw exports soar by nearly 60% last year – says increased affluence is obviously a driver. "But it's also a quality product, let's not forget. It tastes great. And it has a great heritage; that's increasingly important to people, the story of a product, its provenance."

And once you've started drinking it, he adds, Scotch is a rich seam: "Each distillery is like a different grape variety. If you're looking for different tastes, different sensations, Scotch can really give you that experience. All the distilleries, the expressions, the ages, bottlings, finishes – there's real discovery out there."

Mostly, though, I think the distillers (and the drinks multinationals, the Diageos and Pernod-Ricards who now own many of them) have been canny. Slowly and steadily, they've "premiumised" their product, getting more for a single bottle by raising the quality of their blended whiskies, and making every single malt more distinctive, more boutique than the last (Benromach, for example, now produces the world's first fully certified organic whisky).

But whisky's real secret is that in a world where the quick buck rules, its makers are forced, by the very nature of their business, to think long, long term. Their decisions now will determine what they can sell in 15, 25, 50, 70 years' time. "It's the foresight of my great-grandfather, grandfather and father that means we can now sell a 70-year-old malt," says Neil Urquhart, 35. "At the time, everyone else thought it was absurd. But it does feel odd to think that some of what we're doing now may not see the light of day until after I've retired."

Before I leave the Glenlivet, Logan takes me to the calm of the library for a so-called vertical tasting: the 12 (spicy, nutty, sweet); the Nadurra 16-year-old (apple pie, cream, cinnamon); the 18 (toffee, milk chocolate, ripe pears) and the 25 (Christmas pudding, almost chewy). Then he nips out. "I can't give you a bottle of this," he says, returning, "because it's worth £2,000. But have a nose. Have a sip. Think about what was happening when it was distilled, what's happened since. It's a 1959. That's when it gets really interesting, drinking a Scotch that's older than you are."

• In Venezuela, China and India, drinkers can't get enough

• This article was amended on 15 April 2011. The original referred to the making of a single malt as coming from several casks distilled in the same year, "vatted" together and married. This has been corrected.