Have you been wondering whether you are an old fogey because you haven’t bought some Bitcoin or other Cryptocurrency? Well, I think you should probably relax and steer clear of adding Bitcoin to your Black Tulip collection or much prized Darien Scheme share certificate.

There are some sure-fire signs the Cryptocurrencies are a bubble. Breathless stories about “ordinary” people who are Bitcoin millionaires, Bitcoin brokers who speak authoritatively on the coming revolution - but whose wisdom is at odds with their previous careers as failed car salesmen. Then the usual amusing posse of Hello magazine business celebrities jumping on the bandwagon. Michelle Mone has embraced the cryptoworld with enthusiasm and wants you to join her party.

Real world official currencies - including the Pound, Euro and Dollar - are fiat money - that is they have no intrinsic value but they have a practical value because we have confidence in them and accept them as means of exchange for goods and services. Confidence is the critical thing and sometimes it gets lost - as it did recently in Zimbabwe or in Germany in the 1920’s. A crisis of confidence in a currency matters because the real economy suffers and people get hurt.

The key to maintaining confidence in a currency is having somebody with huge assets who knows what they are doing standing behind it. The Bank of England, UK Government and, essentially all the assets of the UK, stand behind the Pound.

Nobody is standing behind Bitcoin, it has no central bank, no lender of last resort, no political support. The key reason why Bitcoin has got to where it has is because it has one vital feature real currencies increasingly don’t have - anonymity. If you go into a UK bank today with £500 in £20 notes and want £50 notes instead you cannot simply exchange them at the counter, the transaction - even though there is no change in value or medium - has to go through your bank account. No such nuisance with a cryptocurrency, which is why if you want to trade illegal things or launder money then it is ideal. Mone’s project for a new online currency is a legitimate business enterprise, but some of its users may have different ideas. Be warned if you dabble in Bitcoin, you are not just swimming with Michelle but also with the sharks.

There are some lessons here too for Scotland. What currency an independent Scotland would have was a hot topic during the Independence Referendum - and rightly so. The Pound has credibility but we can’t have it and the Euro has some credibility mainly because the economic powerhouse of Germany stands behind it - but we do not want it even though if we rejoined the EU we would have to agree to take it. The alternative which the SNP are looking at is called Sterlingisation where we latch on to the Pound but are not actually part of it, have no influence over it and have no proper central bank standing behind us. This is a bad joke, it is what weak Caribbean or African economies do if they do not have a credible currency of their own. Worst of all it is highly dangerous because a Scottish parallel currency created as part of Sterlingisation would be very vulnerable to a loss of confidence - and there is no safety net. The reality of a run on such a fragile currency would be massive destruction of wealth and loss of jobs in Scotland. Yet another good reason to remain part of the UK.

Pinstripe is a senior member of Scotland's financial services community.