THE LIQUID HACKER RETURNED 3,400 BITCOIN AND KEPT 598.5 — THAT IS 15.0% OF WHAT HE TOOK — AND 15% IS EXACTLY THE HAIRCUT HE THREATENED LIQUID HOLDERS WITH

On September 6 a group drained nearly 4,000 bitcoin out of Blockstream's Liquid Network. They gave 3,400 back. They are still holding 598.5, worth about $47 million, and they have asked for a 10% bounty to return it. They also warned that if Blockstream refuses, Liquid holders could be looking at a 15% loss.

Do that arithmetic. 3,400 returned plus 598.5 held is 3,998.5 taken. 598.5 divided by 3,998.5 is 15.0%. The haircut they are threatening holders with is not a threat at all. It is a description of what they are already holding. The loss exists the moment they keep the coins; the only question in the sentence is who pays for it.

And they asked for 10%. Ten percent of what they took is about 400 coins. They are sitting on 598.5. The bounty they are demanding is smaller than the pile they are refusing to give back, which means paying it in full would still leave roughly 200 coins on the wrong side of the table.

Blockstream said no in plain language: taking assets without authorization and withholding their return is a crime, not responsible disclosure. And the line that matters most, because it is the whole reason Liquid is not bitcoin: bitcoin is hard money and can't be minted without costs, and bitcoin doesn't haircut users to pay a ransom.

He is right, and the reason he is right is the reason this happened on Liquid and not on bitcoin. Liquid is a federation. Somebody holds the keys, somebody can freeze it, somebody can decide who eats the loss and somebody can be emailed about a bug and not answer. Bitcoin has nobody in that chair. That is not a feature list. That is the entire product.