Subject: Re: [bitcoin-dev] Using Full-RBF to fix BIP-125 Rule #3 Pinning with nLockTime

From: "David A. Harding" <[email-masked]>
Date: Thu, 10 Nov 2022 17:00:58 -1000

On 2022-11-07 11:17, Peter Todd via bitcoin-dev wrote:
> We can ensure with high probability that the transaction can be 
> cancelled/mined
> at some point after N blocks by pre-signing a transaction, with 
> nLockTime set
> sufficiently far into the future, spending one or more inputs of the
> transaction with a sufficiently high fee that it would replace 
> transaction(s)
> attempting to exploit Rule #3 pinning (note how the package limits in 
> Bitcoin
> Core help here).

This implies a floor on the funds involved in a contract.  For example, 
if the pinning transaction is 100,000 vbytes at a feerate of 1 sat/vb, 
the minimum contract amount must be a bit over 100,000 sats (about $17 
USD at current prices).  However, participants in a contract not meant 
to settle immediately probably need to assume the worst case future 
pinning, for example where transactions paying even 100 sat/vb won't be 
mined promptly; in which case the minimum contract amount becomes 
something like $1,700 USD.

That seems sub-optimal to me.

-Dave