Controversial update of core Bitcoin 24.0 and the effects of Zero-confirmation transactions on scaling and security.

Bitcoin Core 24.0 was just released. This one comes with a lot of controversy. A new feature effecting big industry players, the networks scalability and security.

We are talking about the mempoolfullrbf configuration option. Mempoolfullrbf refers to: The Bitcoin Memory pool which is the 'waiting room' for all unconfirmed transactions on the Bitcoin network and RBF stands for Replace-by-Fee a mempool policy that allows nodes to decide between conflicting unconfirmed transactions based on feerate.

Prior to RBF, the mempool accepted whichever transaction it saw first. In 2016 with the introduction of BIP-125 Bitcoin Core has used what's referred to opt-in - RBF. Where transactions in the mempool can be replaced *if* they signalled they were replaceable i.e. they opted in.

This release introduces Full-RBF which allows full replacement of any transaction as distinct from only replacing transactions that opt-in to it. Why is this controversial? There are industry players using zero-confirmation transactions in their applications.

To put it another way - they're accepting payments which are sitting in the mempool. This is something which everyone knows is theoretically dangerous but hasn't been an issue because once the bitcoin network has fully propagated a non-replace-by-fee transaction...

You needed the collaboration of a miner to replace it, which isn't easy to get today. Even though many of the biggest miners offer off-band transaction broadcasting services, they currently won't process conflicting transactions (double spends)

With the introduction of Full RBF these zero confirmation transactions are simply too risky. The chances of facing a double spend have gone up significantly *IF* you're someone who's accepting 0-conf transactions. So why did protocol developers push forward with this change?

The point of Bitcoin blocks and proof of work is to solve double-spending. When a miner receives two conflicting transactions the highest security policy is to have them take the higher fee. An assumption that miners are rational is better than assuming miners are nice.

Unfortunately while scaling Bitcoin through zero-confirmation transactions looks tempting. The reality is it's not possible to do so without damaging security and that's why we have the lightning network.

I will try to explain lightning network in the next post.

https://nitter.net/thomas_fahrer/status/1596281388923490304

Thank you.

TL;DR with the new update, industry players can now do zero-confirmation transactions in their application, which is good for scaling, but bad for security. The truth is, Bitcoin will never be scalable without damaging security, and hence we need more L2 like lightning network on top of Bitcoin blockchain.

You can discuss your points. You can ask if you have any doubts regarding the topic. i will try my best to answer.