Re: [bitcoin-dev] Thoughts on fee bumping

From: Antoine Riard <antoine.riard@gmail•com>
To: "James O'Beirne" <james.obeirne@gmail•com>,
	 Bitcoin Protocol Discussion
	<bitcoin-dev@lists•linuxfoundation.org>
Subject: Re: [bitcoin-dev] Thoughts on fee bumping
Date: Fri, 11 Feb 2022 00:26:53 -0500	[thread overview]
Message-ID: <CALZpt+FwZTXEYYiJ=1XTXbDVECW41e9rNq8rn8AYr6m3yLAkPA@mail.gmail.com> (raw)
In-Reply-To: <CAPfvXfKrnju1fzxOKs3Fx00NOPWHjedF7e4xMSGs8buwc0O2kw@mail.gmail.com>

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Hi James,

I fully agree on the need to reframe the conversation around
mempools/fee-bumping/L2s though please see my following comments, it's far
from simple!

> Layering on special cases, more carve-outs, and X and Y percentage
> thresholds is going to make reasoning about the mempool harder than it
> already is.

I think that's true with a lot of (all ?) pieces of software, there is a
trend towards complexification. As new Bitcoin use-cases such as LN or
vaults appear, it's not surprising to see the base layer upper interfaces
changing to support the requirements. Same with kernels, at beginning, you
can have a basic memory support with paging/memory rights/kernel allocators
then as you start to support more platforms/devices you might have to
support swaps/DMA/VMs management...

That we should keep the complexity reasonably sane to enable human
auditing, and maybe learn from the failures of systems engineering, that's
something to muse on.

> The countervailing force here ends up being spam prevention (a la
min-relay-fee)
> to prevent someone from consuming bandwidth and mempool space with a long
series of
> infinitesimal fee-bumps.

I think here we should dissociate a) long-chain of transactions and b)
high-number of repeated fee-bumps.

For a) _if_ SIGHASH_ANYPREVOUT is deployed and Eltoo adopted as a primary
update mechanism for stateful L2s, one might envision long-chain of update
transactions servicing as a new pinning vector, where all the chain
elements are offering a compelling feerate/fees. It might be solvable with
smarter mempool logic sorting the elements from the best offer to the lower
ones, though that issue would need more serious investigation.

For b) if we bound with a hard constant the number of RBF attempts, we
decrease the fault-tolerance of L2 transaction issuers. Some of them might
connect directly to the miners because they're offering higher number of
incentive-compatible RBF attempts than vanilla full-nodes. That might
provoke a more or slow centralization of the transaction relay topology...

> Instead of prompting a rebroadcast of the original transaction for
> replacement, which contains a lot of data not new to the network, it
> makes more sense to broadcast the "diff" which is the additive
> contribution towards some txn's feerate.

In a distributed system such as the Bitcoin p2p network, you might have
transaction A and transaction B  broadcast at the same time and your peer
topology might fluctuate between original send and broadcast
of the diff, you don't know who's seen what... You might inefficiently
announce diff A on top of B and diff B on top A. We might leverage set
reconciliation there a la Erlay, though likely with increased round-trips.

> It's probably uncontroversial at this
> point to say that even RBF itself is kind of a hack - a special
> sequence number should not be necessary for post-broadcast contribution
> toward feerate.

I think here we should dissociate the replace-by-fee mechanism itself from
the replacement signaling one. To have a functional RBF, you don't need
signaling at all, just consider all received transactions as replaceable.
The replacement signaling one has been historically motivated to protect
the applications relying on zero-confs (with all the past polemics about
the well-foundedness of such claims on other nodes' policy).

> In a sane design, no structural foresight - and certainly no wasted
>bytes in the form of unused anchor outputs - should be needed in order
>to add to a miner's reward for confirming a given transaction.

Have you heard about SIGHASH_GROUP [0] ? It would move away from the
transaction to enable arbitrary bundles of input/outputs. You will have
your pre-signed bundle of inputs/outputs enforcing your LN/vaults/L2 and
then at broadcast time, you can attach an input/output. I think it would
answer your structural foresight.

> One of the practical downsides of CPFP that I haven't seen discussed in
> this conversation is that it requires the transaction to pre-specify the
> keys needed to sign for fee bumps. This is problematic if you're, for
> example, using a vault structure that makes use of pre-signed
> transactions.

It's true it requires to pre-specify the fee-bumping key. Though note the
fee-bumping key can be fully separated from the "vaults"/"channels" set of
main keys and hosted on replicated infrastructure such as watchtowers.

> The interface for end-users is very straightforward: if you want to bump
> fees, specify a transaction that contributes incrementally to package
> feerate for some txid. Simple.

As a L2 transaction issuer you can't be sure the transaction you wish to
point to is already in the mempool, or have not been replaced by your
counterparty spending the same shared-utxo, either competitively or
maliciously. So as a measure of caution, you should broadcast sponsor +
target transactions in the same package, thus cancelling the bandwidth
saving (I think).

> This theoretical concession seems preferable to heaping more rules onto
an already labyrinthine mempool policy that is difficult for both
implementers and users to reason about practically and conceptually.

I don't think a sponsor is a silver-bullet to solve all the L2-related
mempool issues. It won't solve the most concerning pinning attacks, as I
think the bottleneck is replace-by-fee. Neither solve the issues encumbered
by the L2s by the dust limit.

> If a soft-fork is the cost of cleaning up this essential process,
> consideration should be given to paying it as a one-time cost. This
> topic merits a separate post, but consider that in the 5 years leading
> up to the 2017 SegWit drama, we averaged about a soft-fork a year.
> Uncontroversial, "safe" changes to the consensus protocol shouldn't be
> out of the question when significant practical benefit is plain to see.

Zooming out, I think we're still early in solving those L2 issues, as the
most major second-layers are still in a design or deployment phase. We
might freeze our transaction propagation interface, and get short for some
of the most interesting ones like channel factories and payment pools.
Further, I think we're not entirely sure how the mining ecosystem is going
to behave once the reward is drained and their incentives towards L2
confirmations.

Still, if we think we have a correct picture of the fee-bumping/mempools
issues and are sufficiently confident with the stability of L2 designs, I
think the next step would be to come with quantitative modelling of each
resources consumed by fee-bumping (CPU validation/bandwidth/signing
interactivity for the L2s...) and then score the "next-gen" fee-bumping
primitives.

> I'm not out to propose soft-forks lightly, but the current complexity
> in fee management feels untenable, and as evidenced by all the
> discussion lately, fees are an increasingly crucial part of the system.

Overall, I think that's a relevant discussion to have ecosystem-wise.
Though there is a lot of context and I don't think there is a simple way
forward. Maybe better to stick to an evolutionary development process with
those mempool/fee-bumping issues. We might envision two-or-three steps
ahead though unlikely more.

Cheers,
Antoine

[0] SIGHASH_GROUP described here
https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2021-May/019031.html
and roughly roughly implemented here :
https://github.com/ariard/bitcoin/pull/1

Le jeu. 10 févr. 2022 à 14:48, James O'Beirne via bitcoin-dev <
bitcoin-dev@lists•linuxfoundation.org> a écrit :

> There's been much talk about fee-bumping lately, and for good reason -
> dynamic fee management is going to be a central part of bitcoin use as
> the mempool fills up (lord willing) and right now fee-bumping is
> fraught with difficulty and pinning peril.
>
> Gloria's recent post on the topic[0] was very lucid and highlights a
> lot of the current issues, as well as some proposals to improve the
> situation.
>
> As others have noted, the post was great. But throughout the course
> of reading it and the ensuing discussion, I became troubled by the
> increasing complexity of both the status quo and some of the
> proposed remedies.
>
> Layering on special cases, more carve-outs, and X and Y percentage
> thresholds is going to make reasoning about the mempool harder than it
> already is. Special consideration for "what should be in the next
> block" and/or the caching of block templates seems like an imposing
> dependency, dragging in a bunch of state and infrastructure to a
> question that should be solely limited to mempool feerate aggregates
> and the feerate of the particular txn package a wallet is concerned
> with.
>
> This is bad enough for protocol designers and Core developers, but
> making the situation any more intractable for "end-users" and wallet
> developers feels wrong.
>
> I thought it might be useful to step back and reframe. Here are a few
> aims that are motivated chiefly by the quality of end-user experience,
> constrained to obey incentive compatibility (i.e. miner reward, DoS
> avoidance). Forgive the abstract dalliance for a moment; I'll talk
> through concretes afterwards.
>
>
> # Purely additive feerate bumps should never be impossible
>
> Any user should always be able to add to the incentive to mine any
> transaction in a purely additive way. The countervailing force here
> ends up being spam prevention (a la min-relay-fee) to prevent someone
> from consuming bandwidth and mempool space with a long series of
> infinitesimal fee-bumps.
>
> A fee bump, naturally, should be given the same per-byte consideration
> as a normal Bitcoin transaction in terms of relay and block space,
> although it would be nice to come up with a more succinct
> representation. This leads to another design principle:
>
>
> # The bandwidth and chain space consumed by a fee-bump should be minimal
>
> Instead of prompting a rebroadcast of the original transaction for
> replacement, which contains a lot of data not new to the network, it
> makes more sense to broadcast the "diff" which is the additive
> contribution towards some txn's feerate.
>
> This dovetails with the idea that...
>
>
> # Special transaction structure should not be required to bump fees
>
> In an ideal design, special structural foresight would not be needed
> in order for a txn's feerate to be improved after broadcast.
>
> Anchor outputs specified solely for CPFP, which amount to many bytes of
> wasted chainspace, are a hack. It's probably uncontroversial at this
> point to say that even RBF itself is kind of a hack - a special
> sequence number should not be necessary for post-broadcast contribution
> toward feerate. Not to mention RBF's seemingly wasteful consumption of
> bandwidth due to the rebroadcast of data the network has already seen.
>
> In a sane design, no structural foresight - and certainly no wasted
> bytes in the form of unused anchor outputs - should be needed in order
> to add to a miner's reward for confirming a given transaction.
>
> Planning for fee-bumps explicitly in transaction structure also often
> winds up locking in which keys are required to bump fees, at odds
> with the idea that...
>
>
> # Feerate bumps should be able to come from anywhere
>
> One of the practical downsides of CPFP that I haven't seen discussed in
> this conversation is that it requires the transaction to pre-specify the
> keys needed to sign for fee bumps. This is problematic if you're, for
> example, using a vault structure that makes use of pre-signed
> transactions.
>
> What if the key you specified n the anchor outputs for a bunch of
> pre-signed txns is compromised? What if you'd like to be able to
> dynamically select the wallet that bumps fees? CPFP does you no favors
> here.
>
> There is of course a tension between allowing fee bumps to come from
> anywhere and the threat of pinning-like attacks. So we should venture
> to remove pinning as a possibility, in line with the first design
> principle I discuss.
>
>
> ---
>
> Coming down to earth, the "tabula rasa" thought experiment above has led
> me to favor an approach like the transaction sponsors design that Jeremy
> proposed in a prior discussion back in 2020[1].
>
> Transaction sponsors allow feerates to be bumped after a transaction's
> broadcast, regardless of the structure of the original transaction.
> No rebroadcast (wasted bandwidth) is required for the original txn data.
> No wasted chainspace on only-maybe-used prophylactic anchor outputs.
>
> The interface for end-users is very straightforward: if you want to bump
> fees, specify a transaction that contributes incrementally to package
> feerate for some txid. Simple.
>
> In the original discussion, there were a few main objections that I noted:
>
> 1. In Jeremy's original proposal, only one sponsor txn per txid is
>    allowed by policy. A malicious actor could execute a pinning-like
>    attack by specifying an only-slightly-helpful feerate sponsor that
>    then precludes other larger bumps.
>
> I think there are some ways around this shortcoming. For example: what
> if, by policy, sponsor txns had additional constraints that
>
>   - each input must be signed {SIGHASH_SINGLE,SIGHASH_NONE}|ANYONECANPAY,
>   - the txn must be specified RBFable,
>   - a replacement for the sponsor txn must raise the sponsor feerate,
>     including ancestors (maybe this is inherent in "is RBFable," but
>     I don't want to conflate absolute feerates into this).
>
> That way, there is still at most a single sponsor txn per txid in the
> mempool, but anyone can "mix in" inputs which bump the effective
> feerate of the sponsor.
>
> This may not be the exact solution we want, but I think it demonstrates
> that the sponsors design has some flexibility and merits some thinking.
>
> The second objection about sponsors was
>
> 2. (from Suhas) sponsors break the classic invariant: "once a valid
>    transaction is created, it should not become invalid later on unless
>    the inputs are double-spent."
>
> This doesn't seem like a huge concern to me if you consider the txid
> being sponsored as a sort of spiritual input to the sponsor. While the
> theoretical objection against broadening where one has to look in a txn
> to determine its dependencies is understandable, I don't see what the
> practical cost here is.
>
> Reorg complexity seems comparable if not identical, especially if we
> broaden sponsor rules to allow blocks to contain sponsor txns that are
> both for txids in the same block _or_ already included in the chain.
>
> This theoretical concession seems preferable to heaping more rules onto
> an already labyrinthine mempool policy that is difficult for both
> implementers and users to reason about practically and conceptually.
>
> A third objection that wasn't posed, IIRC, but almost certainly would
> be:
>
> 3. Transaction sponsors requires a soft-fork.
>
> Soft-forks are no fun, but I'll tell you what also isn't fun: being on
> the hook to model (and sometimes implement) a dizzying potpourri of
> mempool policies and special-cases. Expecting wallet implementers to
> abide by a maze of rules faithfully in order to ensure txn broadcast and
> fee management invites bugs for perpetuity and network behavior that is
> difficult to reason about a priori. Use of CPFP in the long-term also
> risks needless chain waste.
>
> If a soft-fork is the cost of cleaning up this essential process,
> consideration should be given to paying it as a one-time cost. This
> topic merits a separate post, but consider that in the 5 years leading
> up to the 2017 SegWit drama, we averaged about a soft-fork a year.
> Uncontroversial, "safe" changes to the consensus protocol shouldn't be
> out of the question when significant practical benefit is plain to see.
>
> ---
>
> I hope this message has added some framing to the discussion on fees,
> as well prompting other participants to go back and give the
> transaction sponsor proposal a serious look. The sponsors interface is
> about the simplest I can imagine for wallets, and it seems easy to
> reason about for implementers on Core and elsewhere.
>
> I'm not out to propose soft-forks lightly, but the current complexity
> in fee management feels untenable, and as evidenced by all the
> discussion lately, fees are an increasingly crucial part of the system.
>
>
>
> [0]:
> https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-January/019817.html
> [1]:
> https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2020-September/018168.html
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev@lists•linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>

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