In a medium saucepan, pour in the butterscotch beer or cream soda. Bring it to a simmer over medium heat, allowing it to reduce until you have approximately 1/2 cup of liquid, which takes about 15-20 minutes. Stir occasionally to prevent sticking, then remove it from the heat and let it cool slightly.

In a separate bowl, whisk together the all-purpose flour, baking powder, baking soda, and salt. Set this mixture aside.

In a large mixing bowl, beat the softened unsalted butter with the light brown sugar and granulated sugar using an electric mixer. Continue beating until light and fluffy.

Add in the room temperature eggs one at a time, mixing well after each addition. Then, mix in the vanilla bean paste and butter extract.

Fold in the melted butterscotch chips and pour in the cooled butterscotch reduction, carefully mixing until everything is incorporated.

Gradually mix the dry ingredients with the buttermilk into the batter, alternating between them. Start and finish with dry ingredients.

Pour the batter into a greased and floured cake pan and bake in a preheated oven at 350°F (175°C) for 27-31 minutes.

While the cake cools, prepare your buttercream frosting by whipping the softened unsalted butter with a pinch of salt. Gradually add the melted butterscotch chips, then sift in the powdered sugar.

Combine the butterscotch chips and heavy cream in a microwave-safe bowl and heat in intervals, stirring until smooth. Whisk in honey.

Once the cake is completely cool, generously frost with the butterscotch buttercream and drizzle the butterscotch sauce over.