Author: Greg Sanders 2022-10-19 15:51:41
Published on: 2022-10-19T15:51:41+00:00
The potential dangers of Replace-By-Fee (RBF) as default policy on Bitcoin transactions were discussed in a recent thread on the bitcoin-dev mailing list. Bitrefill CEO Sergej Kotliar argued that RBF poses an even bigger danger than the zero-conf risk, which is easily managed. He explained that the "american call option" risk could endanger the entirety of BIP21 "Scan this QR code with your wallet to buy this product" model that many have come to appreciate. In a scenario with high volatility and many transactions in the mempools, a user can make a low-fee transaction and then wait for hours, days or even longer, to see whether BTCUSD moves. If it moves up, the user can cancel their transaction and make a new, cheaper one. This feature is available to 100% of all users and has no cost to them, only upside.Kotliar noted that Bitrefill currently processes 1500-2000 onchain payments every day, and if Bitcoin becomes de facto RBF by default, they would likely turn off the BIP21 model for onchain payments and instruct Bitcoin users to use Lightning or deposit onchain BTC to a custodial account they have. However, this option is not available for typical payment providers like BTCPayServer, CoinGate, Bitpay, IBEX, and OpenNode. He called for other merchants and payment providers to share their thoughts on this new behavior and how they would counteract it.While Kotliar acknowledged the reason for the policy being suggested and the potential pinning attack vector for LN and other smart contracts, he argued that the risks/costs of both needed to be weighed against each other first and thoroughly discussed because the costs are non-trivial on both sides. He also pointed out that most users do not have access to RBF functionality, and explaining how to do it to a non-power-user is too complex. Kotliar suggested a risk-based approach to decide on which payments are non-trivial to reverse, taking into account user experience and such.
Updated on: 2023-06-16T01:04:31.448110+00:00