Bitcoin 2.0: the End of Stock Exchanges?

Whether Bitcoin has a bright future as money is debatable, but perhaps that's beside the point. Maybe the point is innovations such as Medici:

Patrick Byrne, the CEO of Overstock.com and would-be financial revolutionary …wants to use the technology behind Bitcoin to create a securities market that exists not in any one particular place, but as a collection of data distributed across computers anywhere on Earth, with no need for the DTCC, the New York Stock Exchange or any of the other middlemen who oversee the world’s capital markets.

This new system, which he calls Medici, after the banking family that ruled over Renaissance-era Florence, would do something no other stock exchange has ever done. It would skip the centralized clearinghouse entirely, and keep track of trading, clearance, and ownership on everyone’s computers at once. It would transform processes that now depend on centralized institutions for trust, and let people instead transact directly with one another.

Why is Bitcoin's success as a money substitute debatable? Matt O'Brien at Wonkblog believes the cryptocurrency is perceived as too good a store of value:

Bitcoin's finite supply means that its price should go up, and keep going up. So if you have dollars that are losing a little value to inflation every year and Bitcoins that are gaining it, which one are you going to use to buy things with? The question answers itself, and it raises another. Why would this ever change? *** Buying things with Bitcoin would be like cashing out your Apple stock in 1978 to go grocery shopping even though you have plenty of actual cash lying around.

Once upon a time, stockholders felt safe from fraud because they possessed actual stock certificates. Then most certificates moved into depositories. Now they've largely vanished. Will investors be willing to take the next step, into cryptostocks?