Author: Greg Sanders 2022-10-19 16:08:19
Published on: 2022-10-19T16:08:19+00:00
The CEO of Bitrefill, Sergej Kotliar, has expressed his concerns regarding the risks and costs associated with RBF as a default policy for bitcoin transactions. One of the biggest dangers he highlights is the "American call option" which could potentially jeopardize the entirety of the BIP21 "Scan this QR code with your wallet to buy this product" model. This would occur if users make low-fee transactions and then wait for hours or days before seeing whether BTCUSD moves. If BTCUSD moves up, they can cancel their transaction and make a new, cheaper one. The greatest risk in accepting bitcoin payments is not zeroconf risk but FX risk as merchants must commit to a certain BTCUSD rate ahead of time for a purchase.Kotliar suggests that this risk could be easily accessible in the wallet feature to "cancel transaction," which could eventually get systematically abused. A risk of X% loss on many payments that's easy to systematically abuse is more scary than a rare risk of losing 100% of one occasional payment. Kotliar points out that Bitrefill processes 1500-2000 on-chain payments daily. If bitcoin becomes de facto RBF by default, this would mean that Bitrefill 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 that they have. Kotliar acknowledges that Lightning currently represents about 15% of Bitrefill's total bitcoin payments. While all want Lightning to grow, it warrants a serious discussion on whether we want Lightning adoption to go to 100% by means of disabling on-chain commerce. For merchants or payment providers, this new behavior needs to be counteracted. While CPFP is somewhat more viable, it requires lots of edge case code to handle abuse vectors, and there are UX issues as with RBF. In the end, a risk-based approach to decide on which payments are non-trivial to reverse is the easiest, taking into account user experience and such.
Updated on: 2023-06-16T01:05:48.376590+00:00