Episode notes
In this episode of The Van Wirdum Sjorsnado, hosts Aaron van Wirdum and Sjors Provoost discuss Replace By Fee (RBF). RBF is a trick that lets unconfirmed transactions be replaced by conflicting transactions that include a higher fee.
With RBF, users can essentially bump a transaction fee to incentivize miners to include the transaction in a block. Aaron and Sjors explain three advantages of RBF: the option the “speed up” a transaction (1), which can in turn result in a more effective fee market for block space (2), as well as the potential to make more efficient use of block space by updating transactions to include more recipients (3).
The main disadvantage of RBF is that it makes it slightly easier to double spend unconfirmed transactions, which was also at the root of last week’s “double spend” controversy that dominated headlines. Aaron and Sjors discuss some solutions to diminish this risk, including “opt-in RBF” which is currently implemented in Bitcoin Core.
Finally, Sjors explains in detail how opt-in RBF works in Bitcoin Core, and which conditions must be met before a transaction is considered replaceable. He also notes some complications with this version of RBF, for example in the context of the Lightning Network.
Chapters
00:00:00 RBF, fee bumping and efficient payments
00:05:58 Cancellation, zero confirmations and relay policy
00:09:53 First-seen-safe RBF and the change problem
00:12:13 Opt-in RBF and the case for full RBF
00:16:41 Bitcoin Core replacement rules
00:22:39 Combining transactions under absolute-fee rules
00:24:57 Lightning fee bumps and transaction pinning
00:27:56 What happened in the reported double spend?
