This post discusses limitations of current Bitcoin Core RBF policy and
attempts to start a conversation about how we can improve it,
summarizing some ideas that have been discussed. Please reply if you
have any new input on issues to be solved and ideas for improvement!
Is it still verboten to acknowledge that RBF is normal behavior and disallowing it is the feature, and that feature is mostly there to appease some people's delusions that zeroconf is a thing? It seems a bit overdue to disrespect the RBF flag in the direction of always assuming it's on.
- **Incentive Compatibility**: Ensure that our RBF policy would not
accept replacement transactions which would decrease fee profits
of a miner. In general, if our mempool policy deviates from what is
economically rational, it's likely that the transactions in our
mempool will not match the ones in miners' mempools, making our
fee estimation, compact block relay, and other mempool-dependent
functions unreliable. Incentive-incompatible policy may also
encourage transaction submission through routes other than the p2p
network, harming censorship-resistance and privacy of Bitcoin payments.
There are two different common regimes which result in different incentivized behavior. One of them is that there's more than a block's backlog in the mempool in which case between two conflicting transactions the one with the higher fee rate should win. In the other case where there isn't a whole block's worth of transactions the one with higher total value should win. It would be nice to have consolidated logic which handles both, it seems the issue has to do with the slope of the supply/demand curve which in the first case is gentle enough to keep the one transaction from hitting the rate but in the second one is basically infinite.