"The Age of Cryptocurrency: How Bitcoin and Digital Money are Challenging the Global Economic Order," by Paul Vigna and Michael J. Casey, is engaging and informative, but after reading it, I've concluded that bitcoin won't achieve the status of a true currency.

Why? It's based on a flawed premise, namely that people should trust a computer protocol that operates without human governance. Yet it's a central axiom of computer science that you can't know in advance whether a protocol will actually work.

The creator (or creators) of bitcoin, who communicated under the alias of Satoshi Nakamoto, wrote in 2009 that "the root problem with conventional currency is all the trust that is required to make it work." He (or she, or they) was referring to central banks, which must be trusted not to debase the currency, and to financial institutions, which must be trusted not to lend the currency recklessly, creating credit bubbles and their unpleasant aftermath. Nakamoto, or whoever it was who went under that name, evidently believed that the centralization of money is "inherently destructive."

To end-run the centers of power, Nakamoto created a digital, open-source currency. According to the protocol he developed, the bitcoin transaction ledger is visible to the world. Anyone with a computer is invited to download the code, update the ledger for new bitcoin transactions, and in so doing earn newly created bitcoins as compensation. This system is governed by an algorithm that doesn't depend on human judgment, isn't swayed by greed, and can't be tampered with by bankers or politicians.

The idea of a decentralized currency stirred the passion of technologists with libertarian and even anarchist leanings, people who don't like being told what to do and accordingly distrust centralized power.

"Many decided it was better to trust this inviolable algorithm-based system," Vigna and Casey write, rather than "the error- and fraud-prone human beings that run the large institutions at the center of the old monetary system." In this light, bitcoin enthusiasts resemble gold bugs, except that the bitcoin enthusiasts have bought into "a crypto-anarchist vision of a decentralized, government-free society, a sort of encrypted, networked utopia," whereas gold bugs value the tangible qualities of the metal and its long tradition as a store of value.

But here's the problem. "Protocols" or "algorithms" can't necessarily be trusted. Computer scientists have understood since the 1930s that you cannot prove in advance whether a new algorithm will successfully solve the problem for which it was designed, or whether it will get lost in an infinite loop. This concept is known as the "Halting Problem," and the theorem is attributed to the brilliant crypto-analyst Alan Turing, regarded as the father of computer science theory and artificial intelligence. The Halting Problem is the reason that computer programs (which are just long algorithms) require debugging, and it's a reason that even computer programs that have been extensively debugged sometimes freeze up, resulting in the dreaded blue screen.

Accordingly, it would be unrealistic to count on a "preordained" protocol like bitcoin to function as designed. And in fact, the idea that bitcoin could operate without human oversight was a mirage from the start. For one, it took several months of debugging and testing before Nakamoto could roll out the first working version. And then the software had to be fixed as bugs were discovered. For example, the roll-out of version 0.8 caused a "fork," or conflicting versions of the public transaction ledger, and had to be rescinded until the bug could be fixed.

It turns out there is human oversight of the bitcoin protocol, and it's vested in a team of five programmers who are employees of the Bitcoin Foundation. According to its website, the foundation is overseen by a board of five directors, who are elected by members. Individuals can become members for an annual $25 contribution, firms for a minimum of $1,000. A number of technology firms support the Bitcoin Foundation. For example, the website lists KnC, a Swedish company that sells computers specialized in processing bitcoin transactions, as a $100,000 supporter.

A foundation funded by industry players is a questionable governance structure for a global currency, in my mind. Especially so when some of the industry players control significant market share. For example, during June 2014, one "miner," or processor, saw its market share fluctuate between 40% and 50% of bitcoin transactions. Industry players could pressure the foundation to adopt favorable terms, such as higher transaction fees at the expense of buyers and sellers (indeed, the foundation is already working on plans to raise fees) or adjusting the supply of new bitcoins to benefit players with long or short positions in the currency. It is also feared that miners with significant market share, or groups of miners working in pools or acting in collusion, could take control of the system, create fraudulent transactions, and destroy the integrity of the open-source ledger.

Vigna and Casey acknowledge that "bitcoin is not watertight" but argue that its weaknesses are "the kind of thing that might bother a hypercautious in-house lawyer for a company wondering whether to trade in it." This is where they miss the boat: No serious institution is going to trust bitcoin as a store of value with such fundamental weaknesses in its structure and governance.

Having said that, bitcoin is an innovation of stunning originality and creativity. Bankers shouldn't bet on bitcoin, but they should absolutely pay attention to new developments in the sphere of crypto-currencies. In a complex and rapidly-changing world, to ignore this space would not be consistent with good governance.

Kenneth A. Posner is chief of strategic planning and investor relations at Capital Bank Financial Corp. and author of "Stalking the Black Swan: Research and Decision Making in a World of Extreme Volatility."