Subject: Re: [bitcoin-dev] A Stroll through Fee-Bumping Techniques : Input-Based vs Child-Pay-For-Parent

From: Lloyd Fournier <[email-masked]>
Date: Tue, 15 Jun 2021 13:08:37 +1000

On Tue, 15 Jun 2021 at 10:59, Lloyd Fournier <[email-masked]> wrote:

>
>
> On Tue, 15 Jun 2021 at 02:47, Antoine Riard <[email-masked]>
> wrote:
>
>> > This makes a lot of sense as it matches the semantics of what we are
>> trying
>> to achieve: allow the owner of an output (whether an individual or group)
>> to reduce that output's value to pay a higher fee.
>>
>> Note, I think you're still struggling with some trust issue that anchor
>> upgrade is at least eliminating for LN, namely the pre-agreement among a
>> group of signers about the effective feerate to use at some unknown time
>> point in the future. If you authorize your counterparty for a broadcast at
>> feerate X, how do you prevent a broadcast at feerate Y, where Y is far
>> under X, thus maliciously burning a lot of your fee-bumping reserve ?
>>
>> Of course, one mitigation is to make a contribution to a common
>> fee-bumping output reserve proportional to what has been contributed as a
>> funding collateral. Thus disincentivizing misuse of the common fee-bumping
>> reserve in a game-theoretical way. But if you take the example of a LN
>> channel, you're now running into another issue. Off-chain balances might
>> fluctuate in a way that most of the time, your fee-bumping reserve
>> contribution is out-of-proportion with your balance amounts to protect ?
>> And as such enduring some significant timevalue bleeding on your
>> fee-bumping reserve.
>>
>> Single-party managed fee-bumping reserve doesn't seem to suffer from this
>> drawback ?
>>
>
> I claim that what I am suggesting is a single-party managed fee-bumping
> system that solves all fee-bumping requirements of lightning without
> needing external utxos and without additional interaction or fee
> pre-agreement between parties. On the commit tx you have your balance going
> exclusively towards you which you can unilaterally reduce to increase the
> fee up to whatever threshold you want. With a HTLC or PTLC you also always
> have a tx with an output that you can unilaterally drain to bump fee
> (either the hltc-success or htlc-timeout). Are you saying that there are
> protocols where this would require pre-arrangement or are you saying that
> it would require pre-arrangement in lightning for some reason I don't see?
>

Ok now I see what I am missing: We don't really know who owns certain
outputs in lightning until the most-recent-state-enforcement mechanism has
done its job. i.e. the outputs are 2-of-2s up until that has been resolved.
I was operating on some simplified imaginary lightning. Indeed this makes
the proposal far less attractive and does require interaction and
pre-agreement. This complexity here makes it worse than just keeping
external fee-bumping utxos around (as undesirable as this is). Thanks for
helping me figure this out.

LL