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What is Full RBF and why are Bitcoin developers conflicted?

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A group of Bitcoin developers has been engaged in a debate for several months about whether to enable the RBF alternative by default on the Bitcoin network and how to do so as efficiently and securely as possible.

The English meaning of the acronym RBF stands for “Replacement By Fee” and is a protocol that some Bitcoin wallets have been offering as an alternative to their users for several years. It consists of being able to increase the fee previously paid for a new transaction..

Because miners take the transactions with the highest fees first, the bitcoin sender can increase the amount paid in fees so that its transaction is included in a block more quickly.

It is important to note that replacing fees for a transaction was a feature present in the original code Bitcoin code published by Satoshi Nakamoto. The problem is that this protocol allowed denial of service (DoS) attacks and for that reason it was removed for a while.

The Return of RBF in Bitcoin

Developer Peter Todd revived the use of RBF in a more secure way where, due to the imposition of a more significant fee, perpetrating DoS attacks on Bitcoin would be much more expensive and therefore not feasible.

Since its return to the Bitcoin codex, RBF is just one alternative that each wallet may or may not offer to its users. The concept of Full RBF implies enabling this protocol in the Bitcoin code as a basic feature; in other words, all Bitcoin users would have the ability to use RBF regardless of the wallet they use.

Currently, the use of RBF is an inactive option but can be enabled by the wallet that decides so. The next step toward Full RBF would be for this feature to be on by default, but with the option to be turned off. However, the ultimate goal is for RBF to be an always-on feature in Bitcoin code.That is, it would not be possible to disable it or do without it.

The idea of Full RBF came from Peter Todd after the developer saw the performance of transactions with optional RBF. This concept has come back to the forefront thanks to the mention by Dario Sneidermanis (founder of Bitcoin wallet and Lightning, Muun) about this on the Bitcoin developers’ mailing list on Oct. 7.

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It was initially thought that this proposal would be enabled in the next update of the Bitcoin Core client (v24), the most widely used Bitcoin node network. However, in the midst of the debate there were arguments in favor of postponing the implementation of RBF to all transactions. and no consensus has yet been reached on its implementation.

Enabling full RBF “causes more problems than it solves.”

Sneidermanis, who opened the thread in the lengthy discussion among developers about implementing Full RBF on Bitcoin, expressed concern about platforms, apps, and services that accept BTC payments without confirmation. These include the Muun wallet, Bitrefill, and Bitcoin ATMs.

Muun’s founder noted that one of the changes present in version 24 of the client program Bitcoin Core allows transactions with RBFs not to be required to indicate that they have this quality.

Currently, transactions that can change their commission through RBFs have a mark that identifies them. This mark allows those receiving unconfirmed payments to distinguish transactions with RBF and take special precautions. The most common approach to these transactions is to wait until they have at least one confirmation before assuming their irreversibility.

If a platform or application that accepts payments without confirmation is unable to determine that a transaction uses RBF, it will not be able to activate the prevention mechanism described above. As a result, they would be much more vulnerable to attacks in which a transaction can be replaced by RBF.

Sneidermanis, in view of the fact that Full RBF would increase the risk of scams for his platform, asked to postpone its implementation. This would give her time to better prepare for the change, which at the time seemed imminent.

Unconfirmed payments could have the same potential as the Lightning network

Developer John Carvalho expressed his disagreement with the implementation of Full RBF in Bitcoin. According to the author, proponents of adopting this protocol “undermine the use of Bitcoin on the main chain and its usefulness at the point of sale for merchants and consumers.”

Carvalho argues that the Full RBF will lead to the creation of New alternative mechanisms for exclusive commissions and mempools. and centralized where the mode of txn in first view or first-look transactions. In addition, the developer comparing The ability to accept payments without confirmation from the Lightning networka second-tier solution that leverages Bitcoin’s scalability for fast payments with extremely low fees.

Accepting 0conf payments (without confirmations) involves taking highly *manageable* risks, which means that if merchants use the best practices and methods, and if there are engineers to empower them to improve the tools and specifications, we can have fast and valuable merchant payments with sellers that meet user expectations. In fact, we may be able to achieve this with less complexity than Lightning and with similar results…

John Carvalho, developer.

Carvalho, who presents himself as an advocate of Bitcoin-enabled use cases, states that “RBF causes more problems than it solves” and that. has never been a necessary qualification for the network created by Satoshi.

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The bitcoin market also affects the efficiency of the Full RBF.

Sergej Kotliar (founder and CEO of the bitcoin shopping site Bitrefill) arguments that the most serious problem that Full RBF implementation may pose is not the acceptance of payments without confirmation, but rather the exchange rate risk between BTC and fiat..

Kotliar explains that a buyer can make a transfer with a low fee and that it may take hours or days to receive a confirmation. If the exchange rate turns out to be unfavorable for the buyer in the meantime, the buyer can cancel the transaction and make a new one that is cheaper at the exchange rate.

The Bitrefill executive also added that, in his opinion, the RBF is not as useful as some would have us believe in speeding up transaction processing. This is because, according to him, about 80 percent of the users of Bitcoin Use wallets that do not offer the RBF option.

According to the chart below, just over 70% of the transactions made in Bitcoin have the RBF mark. This does not mean that their fee was replaced, but that it could be done until they were confirmed.

Bitcoin transactions that can be replaced with RBF.
So far, in 2022, the percentage of bitcoin transactions that indicate they can be replaced with RBF is less than 30 percent. Source: TransactionFee.info.

Full RBF is no more dangerous than accepting unconfirmed payments in Bitcoin.

In May 2021, developer Antoine Riard exposed to members of the Bitcoin developer mailing list to have multi-party protocols on this network that were susceptible to DoS attacks.. In presentRiard sees Full RBF as a possible solution to this threat. Although the developer acknowledges that the risk is not yet high, it is very likely to grow in the future and should be addressed preemptively.

Developers Luke Dashjr and Peter Todd made concurring comments about accepting BTC payments without confirmation, as proponents of this practice are among the biggest critics of Full RBF implementation.

Dashjr called it “unsafe” to accept unconfirmed bitcoin payments. y added that the RBF does not increase the level of insecurity with these transactions. Todd noted that he is not aware of any platforms that, after being victimized by a scam for accepting a payment without confirmation, have no methods to legally proceed against the scammer. Todd supports that, in most cases, such platforms have KYC policies to identify their customers or other methods.

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Similarly, John Carvalho, despite opposing the implementation of Full RBF on Bitcoin, acknowledged in one of his articles e-mail that “double spending is not a certain process and in many business situations it is very risky to attempt it without facing the real-world consequences.”

The website of Bitcoin Core, the most widely used node software for the Bitcoin network, notes that fee substitution has other use cases besides simplifying a mempool transaction. One of these is the ability to combine multiple payments into one, as long as the first one has not received confirmations.

It is believed that one of the reasons why RBF was part of Bitcoin’s original code. is because this protocol can be useful for executing smart contracts. However, Bitcoin Core adds that the ability to replace a fee with a higher one and thus expedite its verification is, in itself, more than enough to recognize the usefulness of this tool.

Bitcoin Core also explains that so far it has not verified the actual use of Full RBF to carry out fraud related to reversal or cancellation of transactions. In any case, the site advises that to avoid this, it is preferable to wait until payments received have a certain number of confirmations.

The debate rages and spreads

When Peter Todd proposed restoring the RBF in Bitcoin, the debate was intense. Today the discussion among developers about the Full RBF is no less heated. There are well-presented and justified arguments for and against this measure from experts in the field.

Currently, it is unclear what the outcome of the debate on the entire RBF will be.. To date, new comments continue to arrive and other developers are joining the discussion. It is worth noting, however, that Antoine Riard himself acknowledges that the implementation of Full RBF can and should take more time before being executed in order to better clarify the whole picture.

I don’t think there is any urgency to add (Full RBF) to 24.0, especially when the appropriate timing is still an open question, May 1, 2023 may still be too early. I think it is better to continue to get more feedback from operators who accept payments without confirmation.

Antoine Riard, developer of Bitcoin Core.

As talks between Bitcoin developers progress, we at CryptoNews will share how the issue evolves and, of course, what decision will ultimately be made.

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