Author: Peter Todd 2015-05-26 00:10:34
Published on: 2015-05-26T00:10:34+00:00
The context is a discussion on Bitcoin development, where Mike Hearn suggests that Child-Pays-For-Parent (CPFP) is an expensive way of paying fees compared to Replace-by-Fee (RBF), particularly for defragmenting outputs. Four use cases are presented to illustrate this point. In the first case, to increase fee on a single transaction, CPFP requires more fees than RBF. In the second case, when paying multiple recipients in succession, RBF allows doubling the spend of the previous transaction with an additional output. In the third case, paying multiple recipients from a 2-of-3 multisig wallet increases fees significantly with CPFP but not with RBF, which allows rewriting the transaction with an additional output. The fourth case looks at defragmentation of UTXOs, where CPFP may cost more in fees than it saves, whereas RBF can be used to double-spend the previous transaction with fewer inputs and smaller size, resulting in lower fees. Cost savings range from 30% to 90%, or even infinite if defragmentation without RBF costs more than what it saves.
Updated on: 2023-06-09T21:18:21.860616+00:00