Author: Sergej Kotliar 2022-10-19 14:29:57
Published on: 2022-10-19T14:29:57+00:00
The CEO of Bitrefill, Sergej Kotliar, has expressed concerns over the default use of Replace-by-Fee (RBF) in Bitcoin transactions. While RBF can help users to make transactions go through faster by increasing the fee, it also allows users to cancel a transaction and replace it with a cheaper one, which could lead to systematic abuse. This is especially concerning for merchants who already face FX risk when accepting Bitcoin payments, as they must commit to a certain BTCUSD rate ahead of time for a purchase. The potential abuse of RBF as a default policy would exacerbate this risk and may lead to merchants turning off on-chain payment options or requiring custodial accounts. Kotliar argues that the risk of RBF abuse is more worrisome than the risk of zero-conf (non-RBF) transactions not confirming. He suggests that a risk-based approach should be taken to determine which payments are non-trivial to reverse, taking into account user experience and other factors. Bitrefill currently processes 1500-2000 on-chain payments every day, and a de facto RBF by default policy would likely result in the company turning off the BIP21 model for on-chain payments. While Lightning Network currently accounts for around 15% of Bitrefill's total Bitcoin payments, Kotliar believes that disabling on-chain commerce to encourage Lightning adoption to reach 100% would not be feasible at this time. Instead, he suggests that on-chain payments should not be limited to make Lightning more appealing, and that clunky solutions such as wallet selectors should be avoided. Kotliar also notes that RBF is not a perfect solution to "unstuck" stuck transactions, as most users do not have access to the feature or understand how it works. CPFP is a more viable option but still not perfect, as it requires handling abuse vectors and user experience issues. Ultimately, Kotliar urges for a thorough discussion of the risks and costs associated with RBF as a default policy before implementing it.
Updated on: 2023-06-16T01:04:12.118066+00:00