Author: David A. Harding 2020-01-31 21:01:29
Published on: 2020-01-31T21:01:29+00:00
In a Bitcoin development discussion, ZmnSCPxj proposed a mechanism for feerate insurance against on-chain feerate spikes. The proposed mechanism involves a series of transactions with RBF enabled and no relative locktime at the current block height, wherein Alice and Ingrid arrange inputs and outputs with Bob, Alice, and Ingrid as recipients. Ingrid can rescind the pre-signed transactions before any of them is confirmed by double-spending her UTXO. However, if Alice needs to trust Ingrid anyway, they might as well use an external accounting and payment mechanism. For example, Alice and Ingrid can agree to a fee schedule and wait for whichever version of the transaction to confirm. They can then remit to the other the appropriate amount using whatever mechanism they support, such as an on-chain transaction, an LN payment, or credit on an exchange. The locktime mechanism does not add anything to the idea of hedging fees and suffers from incompatibility with some cases where users would be especially eager to obtain feerate insurance.
Updated on: 2023-06-13T23:19:46.250869+00:00