I must admit I ignored all articles and news commentaries about Bitcoin until very recently. It was only when I read (with amazement) that two universities in the United States had launched academic courses on the subject that I began to check my long-held sceptical view.

On further reading, it transpired the universities were more interested in the commercial spin-offs from Bitcoin's potential technological breakthrough, than staking their future on forecasting a new reserve currency.

Essentially, the colleges were promoting their courses as platforms to attract venture capital for start-ups associated with the as yet unproven technology. It was then I remembered one of my own university finance professors remarking whilst discussing the capital asset pricing model: "Everyone's in sales, even those of us who don't know it".

Bitcoin was coined at the height of the financial crisis in 2009 by a computer scientist whizz. The true identity of its creator is a mystery.

I'm not sure why you'd want to deny yourself the publicity of being the genius brainchild originator of a business that at one stage in 2013 was "worth" $14bn. But that's part and parcel of the Bitcoin phenomenon. Isn't it always more interesting to have a mysterious origin rather than a simple, basic and boring one?

That's why TV murder mysteries and crime dramas have such a huge following - they appeal to our innate curiosity and the "intrigue of it all". Asking a question, (even if you don't know the answer yourself), is a fabulous way to grab the attention of your audience.

Firstly, an attempt, with as little jargon as possible, to summarise Bitcoin. It's a "peer-to-peer digital currency that can be exchanged quickly without the high fees associated with traditional payments".

There are numerous more lengthy and sinister descriptions, all referencing "a currency free from any central bank authority, corrupt governments or banks". One Bitcoin exchange made the promise that "you can become your own bank" once you joined the Bitcoin "community".

The Bitcoin "community" consists of an army of enthusiasts using their computing power to authenticate digital transactions, via complex algorithms, earning Bitcoins for their labour. Apparently, there will never be more than 21m Bitcoins in existence, though each Bitcoin can be subdivided to eight decimal places. Oh and Bitcoins are not safe and can be stolen (just like regular cash) if the system is compromised.

Confused? It's an pity Albert Einstein isn't around to read up on the subject, as he would definitely be re-stating… "the more I learn, the more I realise how much I don't know".

The standard line used by Bitcoin supporters is that some very large financial institutions have backed the new currency. Really? I did some serious digging and found lots of references to talking shops, symposiums, panel discussions and research presentations, but precious little evidence of big capital investment anywhere.

Some of the most enthusiastic supporters of Bitcoin, suggest it will experience explosive growth in transactions adoption "once regulators get involved". This is the equivalent of turkeys voting for Christmas. I know of no business patiently waiting for others to lay down the law on how to run their operations.

Bitcoin fans say the beauty of their collaboration is the public authentication of their "blockchain" (seriously, don't ask) via "peer-to-peer" networks. When I appreciated the peer-to-peer nature of Bitcoin, (it took a while) it was then that I became very nervous.

The peer-to-peer phenomenon is set to take over the world. Peer-to peer lending and crowd funding have become all the rage. Peer-to-peer lending platforms are going to steal away all commercial lending from banks, rendering them extinct. Are we honestly suggesting that time starved individuals with money to lend or invest, are all going to become credit analysts and intermediaries, scrutinising each other and each individual corporate risk?

The peer-to-peer aspect got me thinking about the subject of crowds. James Surowiecki's The Wisdom of Crowds, (Random House 2004 argues that "large groups of people are smarter than an elite few, no matter how brilliant - better at solving problems, fostering innovation, coming to wise decisions, even predicting the future".

Surowiecki explains one of the requirements of good crowd judgment "is that people's decisions are made independently of one another. If everyone lets themselves be influenced by each other's guesses, there's more chance that the guesses will drift toward a misplaced bias".

Unfortunately, the real world just doesn't work like that. Of course one person's view is influenced by another person's view whether they admit it or not and if that leads to bad "crowd" judgements, that's simply called life!

I liken the crowd to consensus earnings forecasts in my day job. Consensus is mostly right, but it's often wrong. Did the wisdom of the crowd or consensus, correctly anticipate the strength of the dollar this year? In an FT poll conducted late last year, asking currency strategists for their forecasts, only one had a forecast of dollar parity to the euro by the end of 2015. Or what about the collapse in oil prices? Or the Swiss National Bank abandoning its peg to the euro?

Bitcoin enthusiasts say payments in Bitcoin are equivalent to those in PayPal. Really? There's a huge difference between people trading virtual currencies amongst themselves for fun and actual, real payments and transactions for real things. PayPal is owned by US-based eBay. According to eBay, PayPal processed $203bn worth of payments in 2013; has 153m users and represented 41pc of its parent's revenues that year.

What about Amazon the other e-tailing gorilla? Amazon's installed customer base is nearly as twice as large as eBay's, with 270m active users worldwide. Finally, Apple Pay, the secure and seamless mobile payment system using near field communication was launched in the US last year. Apple intends thumb-print identification on their iPhones to be one of the modes of shopping for the future. Apple have sold 700m iPhones and 450m-500m of those are iTunes customers with credit card details already logged.

Despite all the hype about new methods of payment, one of the systems we still rely on to wire cash all over the world, Swift, has some interesting insights into the emerging trends of actual global payment currencies.

The big revelation in the internationalisation of global payment currencies is not Bitcoin but rather, China's renminbi. According to Swift, the international currency clearing system, the renminbi has overtaken the Canadian dollar and the Australian dollar by value of transactions.

It is now in the top five most-used world payment currencies behind the yen, sterling, euro and the dollar.

But even though the renminbi is in the top five, only 2.2pc of the world's payments were conducted in the Chinese currency in December 2014. The US dollar and euro still account for three quarters of all payment transactions.

One of the key takeaways from the Bitcoin fiasco is the persuasive power of the internet. Tom Wheeler, chairman of the Federal Communications Commission (FCC), the closest thing we have to an internet policeman said in his keynote speech at the Mobile World Congress in Barcelona in March this year "the basic question comes down to this - and that is, if the internet is the most powerful and persuasive platform in the history of the planet, which I believe it is, can it exist without a referee?"

A final word on crowds. My favourite book on the subject is Extraordinary Popular Delusions and the Madness of Crowds by Charles MacKay in 1841.

Back then MacKay wrote…. "Men, it has been said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one".

What of Bitcoin's relationship to gold? Well, all I can say on the subject is that by the end of November 2013, when Bitcoin hit a high of $1,242, gold was already well on its way to recording its worst performance in over 30 years. As one bubble was being inflated, the air was coming out of another. Now that the Bitcoin bubble has collapsed (current price is $220), where's the next bubble?

Donnacha Fox is an executive director with wealth management firm Quilter Cheviot

Sunday Indo Business