Author: Peter Todd 2022-10-20 04:05:33
Published on: 2022-10-20T04:05:33+00:00
Sergej Kotliar, a Bitcoin developer, has highlighted the potential dangers of RBF (Replace-By-Fee) as the default policy. While zero-conf risk is manageable, the bigger danger is the "American call option." 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 longer to see whether BTCUSD moves. If it moves up, the user can cancel their transaction and make a new, cheaper one, which risks endangering the entirety of BIP21's "Scan this QR code with your wallet to buy this product" model. Bitrefill accepts transactions with RBF enabled, but this feature could be easily abused by users. The biggest risk in accepting Bitcoin payments is FX risk as the merchant must commit to a certain BTCUSD rate ahead of time for a purchase. Over time, some transactions lose money to FX, while others earn money, which evens out in the end. However, if there is an easily accessible feature in the wallet to "cancel transaction," it will eventually get systematically abused. Fixedfloat.com deals with this call option risk by charging a higher fee for conversions where the exact destination amount has been locked in, while the default is for the exact destination amount to be picked at the moment of confirmation.Electrum, Green Wallet, and many other wallets and exchanges are already RBF by default, and most of them do not even have a way to send a transaction without RBF. For Bitrefill, a world where Bitcoin becomes de facto RBF by default means that they would face a risk of X% loss on many payments that's easy to systematically abuse. Therefore, Kotliar suggests accepting Lightning, which drastically shortens the time window involved.
Updated on: 2023-06-16T00:48:26.491214+00:00