Re: [bitcoin-dev] Proposal: Full-RBF in Bitcoin Core 24.0

From: Billy Tetrud <billy.tetrud@gmail•com>
To: Antoine Riard <antoine.riard@gmail•com>
Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists•linuxfoundation.org>
Subject: Re: [bitcoin-dev] Proposal: Full-RBF in Bitcoin Core 24.0
Date: Sat, 26 Jun 2021 09:13:23 -0700	[thread overview]
Message-ID: <CAGpPWDZDhusi0Dq_LLmvXG=Ef6fUX4Xw_7DTBTWiGgDwxBQ_AQ@mail.gmail.com> (raw)
In-Reply-To: <CALZpt+FuoVPt_GeT6_MSSpTJ9H1XqqVzDmviYcdJF_AuRNQTfA@mail.gmail.com>

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>  services providers are offering zero-conf channels, where you can start
to spend instantly [0]. I believe that's an interesting usage

I agree those are interesting and useful cases. I suppose I should clarify
that when I asked if bitcoin should continue supporting 0-conf
transactions, I meant: should we make design decisions based on whether it
makes raw 0-conf transactions more or less difficult to double spend on? I
do think 0-conf transactions can be useful in situations where there is
some level of trust (either direct trust between the interacting parties,
or disperse trust that most people won't try to double spend, perhaps
because the transaction is small or their identity is tied to it). Fidelity
bonds sound like an interesting way to mitigate sybil attacks in a
reputation system.

On Thu, Jun 24, 2021 at 5:23 PM Antoine Riard <antoine.riard@gmail•com>
wrote:

> > Do we as a community want to support 0-conf payments in any way at this
> > point? It seems rather silly to make software design decisions to
> > accommodate 0-conf payments when there are better mechanisms for fast
> > payments (ie lightning).
>
> Well, we have zero-conf LN channels ? Actually, Lightning channel funding
> transactions should be buried under a few blocks, though few services
> providers are offering zero-conf channels, where you can start to spend
> instantly [0]. I believe that's an interesting usage, though IMHO as
> mentioned we can explore different security models to make 0-conf safe
> (reputation/fidelity-bond).
>
> > One question I have is: how does software generally inform the user about
> 0-conf payment detection?
>
> Yes generally it's something like an "Unconfirmed" annotation on incoming
> txn, though at least this is what Blockstream Green or Electrum are doing.
>
> > But I
> suppose it would depend on how often 0-conf is used in the bitcoin
> ecosystem at this point, which I don't have any data on.
>
> There are few Bitcoin services well-known to rely on 0-conf. Beyond how
> much of the Bitcoin traffic is tied to a 0-conf is a hard question, a lot
> of 0-confs service providers are going to be reluctant to share the
> information, for a really good reason you will learn a subset of their
> business volumes.
>
> I'll see if I can come up with some Fermi estimation on this front.
>
> [0] https://www.bitrefill.com/thor-turbo-channels/
>
> Le mer. 16 juin 2021 à 20:58, Billy Tetrud <billy.tetrud@gmail•com> a
> écrit :
>
>> Russel O'Connor recently opined
>> <https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2021-June/019061.html>
>> that RBF should be standard treatment of all transactions, rather than as a
>> transaction opt-in/out. I agree with that. Any configuration in a
>> transaction that has not been committed into a block yet simply can't be
>> relied upon. Miners also have a clear incentive to ignore RBF rules and
>> mine anything that passes consensus. At best opting out of RBF is a weak
>> defense, and at worst it's simply a false sense of security that is likely
>> to actively lead to theft events.
>>
>> Do we as a community want to support 0-conf payments in any way at this
>> point? It seems rather silly to make software design decisions to
>> accommodate 0-conf payments when there are better mechanisms for fast
>> payments (ie lightning).
>>
>> One question I have is: how does software generally inform the user about
>> 0-conf payment detection? Does software generally tell the user something
>> along the lines of "This payment has not been finalized yet. All recipients
>> should wait until the transaction has at least 1 confirmation, and most
>> recipients should wait for 6 confirmations" ? I think unless we pressure
>> software to be very explicit about what counts as finality, users will
>> simply continue to do what they've always done. Rolling out this policy
>> change over the course of a year or two seems fine, no need to rush. But I
>> suppose it would depend on how often 0-conf is used in the bitcoin
>> ecosystem at this point, which I don't have any data on.
>>
>> On Tue, Jun 15, 2021 at 10:00 AM Antoine Riard via bitcoin-dev <
>> bitcoin-dev@lists•linuxfoundation.org> wrote:
>>
>>> Hi,
>>>
>>> I'm writing to propose deprecation of opt-in RBF in favor of full-RBF as
>>> the Bitcoin Core's default replacement policy in version 24.0. As a
>>> reminder, the next release is 22.0, aimed for August 1st, assuming
>>> agreement is reached, this policy change would enter into deployment phase
>>> a year from now.
>>>
>>> Even if this replacement policy has been deemed as highly controversial
>>> a few years ago, ongoing and anticipated changes in the Bitcoin ecosystem
>>> are motivating this proposal.
>>>
>>> # RBF opt-out as a DoS Vector against Multi-Party Funded Transactions
>>>
>>> As explained in "On Mempool Funny Games against Multi-Party Funded
>>> Transactions'', 2nd issue [0], an attacker can easily DoS a multi-party
>>> funded transactions by propagating an RBF opt-out double-spend of its
>>> contributed input before the honest transaction is broadcasted by the
>>> protocol orchester. DoSes are qualified in the sense of either an attacker
>>> wasting timevalue of victim's inputs or forcing exhaustion of the
>>> fee-bumping  reserve.
>>>
>>> This affects a series of Bitcoin protocols such as Coinjoin, onchain
>>> DLCs and dual-funded LN channels. As those protocols are still in the early
>>> phase of deployment, it doesn't seem to have been executed in the wild for
>>> now.  That said, considering that dual-funded are more efficient from a
>>> liquidity standpoint, we can expect them to be widely relied on, once
>>> Lightning enters in a more mature phase. At that point, it should become
>>> economically rational for liquidity service providers to launch those DoS
>>> attacks against their competitors to hijack user traffic.
>>>
>>> Beyond that, presence of those DoSes will complicate the design and
>>> deployment of multi-party Bitcoin protocols such as payment
>>> pools/multi-party channels. Note, Lightning Pool isn't affected as there is
>>> a preliminary stage where batch participants are locked-in their funds
>>> within an account witnessScript shared with the orchestrer.
>>>
>>> Of course, even assuming full-rbf, propagation of the multi-party funded
>>> transactions can still be interfered with by an attacker, simply
>>> broadcasting a double-spend with a feerate equivalent to the honest
>>> transaction. However, it tightens the attack scenario to a scorched earth
>>> approach, where the attacker has to commit equivalent fee-bumping reserve
>>> to maintain the pinning and might lose the "competing" fees to miners.
>>>
>>> # RBF opt-out as a Mempools Partitions Vector
>>>
>>> A longer-term issue is the risk of mempools malicious partitions, where
>>> an attacker exploits network topology or divergence in mempools policies to
>>> partition network mempools in different subsets. From then a wide range of
>>> attacks can be envisioned such as package pinning [1], artificial
>>> congestion to provoke LN channels closure or manipulation of
>>> fee-estimator's feerate (the Core's one wouldn't be affected as it relies
>>> on block confirmation, though other fee estimators designs deployed across
>>> the ecosystem are likely going to be affected).
>>>
>>> Traditionally, mempools partitions have been gauged as a spontaneous
>>> outcome of a distributed systems like Bitcoin p2p network and I'm not aware
>>> it has been studied in-depth for adversarial purposes. Though, deployment
>>> of second-layer
>>> protocols, heavily relying on sanity of a local mempool for
>>> fee-estimation and robust propagation of their time-sensitive transactions
>>> might lead to reconsider this position. Acknowledging this, RBF opt-out is
>>> a low-cost partitioning tool, of which the existence nullifies most of
>>> potential progresses to mitigate malicious partitioning.
>>>
>>>
>>> To resume, opt-in RBF doesn't suit well deployment of robust
>>> second-layers protocol, even if those issues are still early and deserve
>>> more research. At the same time, I believe a meaningful subset of the
>>> ecosystem  are still relying
>>> on 0-confs transactions, even if their security is relying on far weaker
>>> assumptions (opt-in RBF rule is a policy rule, not a consensus one) [2] A
>>> rapid change of Core's mempool rules would be harming their quality of
>>> services and should be
>>> weighed carefully. On the other hand, it would be great to nudge them
>>> towards more secure handling of their 0-confs flows [3]
>>>
>>> Let's examine what could be deployed ecosystem-wise as enhancements to
>>> the 0-confs security model.
>>>
>>> # Proactive security models : Double-spend Monitoring/Receiver-side
>>> Fee-Topping with Package Relay
>>>
>>> From an attacker viewpoint, opt-in RBF isn't a big blocker to successful
>>> double-spends. Any motivated attacker can modify Core to mass-connect to a
>>> wide portion of the network, announce txA to this subset, announce txA' to
>>> the
>>> merchant. TxA' propagation will be encumbered by the privacy-preserving
>>> inventory timers (`OUTBOUND_INVENTORY_BROADCAST_INTERVAL`), of which an
>>> attacker has no care to respect.
>>>
>>> To detect a successful double-spend attempt, a Bitcoin service should
>>> run few full-nodes with well-spread connection graphs and unlinkable
>>> between them, to avoid being identified then maliciously partitioned from
>>> the rest of the network.
>>>
>>> I believe this tactic is already deployed by few Bitcoin services, and
>>> even one can throw flame at it because it over consumes network resources
>>> (bandwidth, connection slots, ...), it does procure a security advantage to
>>> the ones doing it.
>>>
>>> One further improvement on top of this protection could be to react
>>> after the double-spend detection by attaching a CPFP to the merchant
>>> transaction, with a higher package feerate than the double-spend. Expected
>>> deployment of package-relay as a p2p mechanism/mempool policy in Bitcoin
>>> Core should enable it to do so.
>>>
>>> # Reactive security models : EconomicReputation-based Compensations
>>>
>>> Another approach could be to react after the fact if a double-spend has
>>> been qualified. If the sender is already known to the service provider, the
>>> service account can be slashed.  If the sender is a low-trusted
>>> counterparty to the merchant, "side-trust" models could be relied on. For
>>> e.g a LN pubkey with a stacked reputation from your autopilot, LSATs, stake
>>> certificates, a HTLC-as-a-fidelity-bond, ... The space is quite wide there
>>> but I foresee those trust-minimized, decentralized solutions being adopted
>>> by the LN ecosystem to patch the risks when you enter in a channel/HTLC
>>> operation with an anonymous counterparty.
>>>
>>> What other cool new tools could be considered to enhance 0-confs
>>> security ?
>>>
>>> To conclude, let's avoid replaying the contentious threads of a few
>>> years ago. What this new thread highlights is the fact that a transaction
>>> relay/mempool acceptance policy might be beneficial to some class of
>>> already-deployed
>>> Bitcoin applications while being detrimental to newer ones. How do we
>>> preserve the current interests of 0-confs users while enabling upcoming
>>> interests of fancy L2s to flourish is a good conversation to have. I think.
>>>
>>> If there is ecosystem agreement on switching to full-RBF, but 0.24
>>> sounds too early, let's defer it to 0.25 or 0.26. I don't think Core has a
>>> consistent deprecation process w.r.t to policy rules heavily relied-on by
>>> Bitcoin users, if we do so let sets a precedent satisfying as many folks as
>>> we can.
>>>
>>> Cheers,
>>> Antoine
>>>
>>> [0]
>>> https://lists.linuxfoundation.org/pipermail/lightning-dev/2021-May/003033.html
>>>
>>> [1] See scenario 3 :
>>> https://lists.linuxfoundation.org/pipermail/lightning-dev/2020-June/002758.html
>>>
>>> [2] https://github.com/bitcoin/bitcoin/pull/10823#issuecomment-466485121
>>>
>>> [3] And the LN ecosystem does have an interest to fix zero-confs
>>> security, if "turbo-channels"-like become normalized for mobile nodes
>>> _______________________________________________
>>> bitcoin-dev mailing list
>>> bitcoin-dev@lists•linuxfoundation.org
>>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>>
>>

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