MoneRogue | Justice for Hayden Panettiere on Nostr: The incident with Liquid Bitcoin goes to show that where you place your funds is only ...

The incident with Liquid Bitcoin goes to show that where you place your funds is only as safe as the funds themselves. When L-BTC goes unbacked and irredeemable, it ends up becoming worthless fiduciary coins, giving users a false sense of security. By the time the runs come, it's already too late to save your funds.

It's always good to use commodity Bitcoin i.e when you own your own keys and coins whenever possible, as they are the safest type.

This is not to say you should avoid Bitcoin-substitutes, but it is to say that you must do your due diligence when it comes to receiving them.

https://mises.org/library/book/theory-money-and-credit

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Roughly 4,000 Bitcoin was withdrawn from Liquid after a software bug allowed LBTC that should never have existed to be accepted as valid. Initial reporting put it at around 320 million dollars.

To be clear about the scale, there was something like 150 or 200 Bitcoin left on the network afterwards. Essentially every coin on Liquid went out the door in one go.

Blocks stopped. If you had funds on Liquid, you could not move them.

https://ungovernable.network/shows/bitcoin-brief/4000-bitcoin-hacked/