Bitcoin's "Great Hackening": Coldcard Bug, Liquid Exploit and AI Reshape Security

Bitcoin is in the middle of a rough stretch for security, and one commentator has given it a name: the "Great Hackening of 2026." In a recent episode of the Take, the host walks through a string of incidents that, taken together, suggest the ground is shifting under the network's tooling.

The headline item is a serious entropy bug in Coldcard, a hardware wallet popular with security-minded holders. Entropy is the randomness used to generate private keys, so a flaw there can quietly weaken every wallet created with the affected software. The episode describes the issue as catastrophic, because users may have no visible sign that their keys are less random than they should be.

Next is the Liquid sidechain, which recently suffered an exploit involving roughly 4,000 BTC. Liquid is widely used by exchanges and traders for faster settlement, so a loss of that size draws attention to the trust and custody assumptions behind federated sidechains.

The discussion also covers problems in Lightning implementations, a few major wallet updates pushed out in response to vulnerabilities, and several data breaches at companies in the space. None of these alone is necessarily fatal, but the cluster of them in a short period is what gives the "hackening" label its bite.

The broader argument is about AI. According to the host, AI tools have changed the economics of both attack and defense. Hunting for bugs in complex, long-lived codebases used to take scarce expertise and time. Automated analysis now makes it cheaper to scan for flaws, which helps defenders but also hands attackers a faster way to find weaknesses that have sat unnoticed for years. Older code that was never closely audited looks especially exposed.

That framing matters for Bitcoin because the ecosystem leans on a patchwork of wallets, sidechains, second-layer protocols and custodians, each with its own codebase and its own maintainers. Base-layer Bitcoin has a long track record of scrutiny. The software built around it has often had far less.

For users, the practical takeaways are familiar but worth repeating: keep wallet firmware and software updated, watch for advisories from hardware wallet makers, avoid concentrating funds in any single sidechain or custodian, and treat new tools with more caution than battle-tested ones. If AI is making vulnerability discovery cheaper, the pressure on developers to audit, patch and disclose quickly is only going to grow.