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

From: Corey Haddad <[email-masked]>
Date: Wed, 30 Jun 2021 10:06:50 -0400

We cannot prevent people from choosing to take an action based on an
unconfirmed transaction. Even though it is trivial to have a
double-spending transaction confirmed, accepting a 0-conf tx can be
rational in many cases.  0-conf can be interpreted as the customer
signaling their 'intent to pay', and where there is an established
relationship between customer and merchant, or where there merchant is
providing a cancelable e-service, signaling intent may be enough. These use
cases do not depend on making it difficult for the user to attempt to
double-spend the merchant.

Bitcoin is a system designed around a consensus on the blockchain, not the
mempool. I am in favor of providing the spender of bitcoins with all
possible tools and methods to help them submit their transactions -
double-spending or not - to miners for consideration. More than making RBF
the default, I would prefer to see nodes forward any transaction
conflicting transaction, so long as it has a higher fee. Is there a reason
this would be undesirable?

Corey

On Sat, Jun 26, 2021 at 3:00 PM Jeremy via bitcoin-dev <
[email-masked]> wrote:

> If the parties trust each other, rbf is still opt-in. Just don't do it?
>
> On Sat, Jun 26, 2021, 9:30 AM Billy Tetrud via bitcoin-dev <
> [email-masked]> wrote:
>
>> >  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 <[email-masked]>
>> 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 <[email-masked]> 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 <
>>>> [email-masked]> 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
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