It's rediscovering human nature. People can't be trusted if things are done in darkness. There will always be someone to negatively take advantage of the situation.

Without some regulation we will see a never ending cycle of fraud. FTX over and over again. The real shame is that Crypto was gaining a bit of respectability only to be brought down again. Also, how easily it was for a 30 yr old business neophyte had so many people fooled since there was no clarity on his dealings.

Blind trust has not worked and will never work as long as humans are involved.

> I thought part of the value proposition of “crypto” was that it doesn’t require such legislation?

In the case of Bitcoin and its Lightning Network, that remains true. It doesn't need legislation to continue operating. Has done so for 14 years without any interference or intervention from law makers, and will continue to operate just fine without their influence. However, legislation can help with trust and adoption though (depending on the legislation of course), because for better or worse, many people trust their governments and look to them for guidance on what's "safe".

And no, that's not the value proposition of Bitcoin. The value proposition of Bitcoin was stated clearly by Satoshi Nakamoto.

"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."

That's the core value proposition. The issuance policy of Bitcoin has been rock solid for the last 14 years and all indications say that should continue to happen indefinitely. There's not a single fiat currency on Earth that can claim the same.

> The ecosystem seems to (slowly, painfully) re-discover everything that is useful about fiat currencies.

There's nothing "useful" about fiat currencies, at least not useful enough to counterbalance the tradeoffs.

Perhaps you're confusing "fiat" currency with the more general idea of state-issued money, which hasn't always been "fiat" in its implementation e.g. commodity monies like those minted from valued metals, or certificates backed by gold reserves. Legislation, institutions, processes, and businesses were built up around state-issued monies to help the financial plumbing and grease the wheels of the economy, but that has nothing to do with whether the nature of the money is "fiat" or not. Fiat just means "by decree" i.e. this money has value because we says it does. Commodity money has value because of its scarcity. The source of Bitcoin's value is similar to commodity money i.e. it's provably scarce.

Fiat is a relatively new phenomenon in the technology of money and probably a small blip in its ~5000 year history (so far). The question is how long will that blip be?

Fiat is not anything new.. neither is the concept of money. Earliest writings are for accounting and bookkeeping. People were representing commodities with tokens which can be exchanged. The idea that money was minted only from precious metals, notably gold and silver is false. Clay and bronze coins were common as IOUs.

>Fiat is not anything new

You're right. Fiat has been tried many times before, and ultimately fails. I should've said it was relatively new in its current iteration.

> neither is the concept of money. Earliest writings are for accounting and bookkeeping.

I did say there was a ~5000 year history, alluding to the Sumerian clay tablets/ledgers, like the famous "Kushim" tablet.

> The idea that money was minted only from precious metals, notably gold and silver is false.

Correct, but that's not what I was saying. I was simply providing the most well-known examples of commodity money.

As someone working in the ecosystem, I agree, but would correct it to "seems to (quickly, painfully) rediscover everything"

It is for investors.