Re: [Bitcoin-development] First-Seen-Safe Replace-by-Fee

2015-05-27 Thread Peter Todd
On Tue, May 26, 2015 at 01:13:05AM -0400, Peter Todd wrote:
 Case 1: Increasing the fee on a single tx
 -
 
 We start with a 1-in-2-out P2PKH using transaction t1, 226 bytes in size
 with the minimal relay fee, 2.26uBTC. Increasing the fee while
 respecting FSS-RBF rules requires the addition of one more txin, with
 the change output value increased appropriately, resulting in
 transaction t2, size 374 bytes. If the change txout is sufficient for
 the fee increase, increasing the fee via CPFP requires a second
 1-in-1-out transaction, 192 bytes, for a total of 418 bytes; if another
 input is required, CPFP requires a 2-in-1-out tx, 340 bytes, for a total
 of 566 bytes.
 
 Benefits: 11% to 34%+ cost savings, and RBF can increase fees even in
   cases where the original transaction didn't have a change
   output.

To clarify a point raised(1) on the pull-req itself:

The replacement transaction is allowed to not only add new txin's, but
also replace txins. Suppose t1 is a 2-in-2-out P2PKH using transaction,
374 bytes in size. With CPFP accomplished by a 1-in-1-out tx, 192 bytes,
you have 566 bytes total. With FSS RBF if you have an unspent output
greater in value than one of the outputs spent by t1, you can replace
that output in t1's vin txin set and rebroadcast the transaction, still
374 bytes in size. This gives you a 34% cost savings vs. CPFP.

 Case 2: Paying multiple recipients in succession
 
 
 We have a 1-in-2-out P2PKH transaction t1, 226 bytes, that pays Alice.
 We now need to pay Bob. With plain RBF we'd just add a new outptu and
 reduce the value of the change address, a 90% savings. However with FSS
 RBF, decreasing the value is not allowed, so we have to add an input.
 
 If the change of t1 is sufficient to pay Bob, a second 1-in-2-out tx can
 be created, 2*226=452 bytes in total. With FSS RBF we can replace t1
 with a 2-in-3-out tx paying both, increasing the value of the change
 output appropriately, resulting in 408 bytes transaction saving 10%
 
 Similar to the above example in the case where the change address of t1
 is insufficient to pay Bob the end result is one less transaction output
 in the wallet, defragmenting it. Spending these outputs later on would
 require two 148 byte inputs compared to one with RBF, resulting in an
 overall savings of 25%

Similarly in the multiple recipients case, if sufficiently large
outputs are available the additional funds can be obtained by swapping
one input for another.

For instance if Alice has three outputs, 1.0, 0.5, and 0.2 BTC, and
needs to pay Bob 1.1 BTC, she can create t1:

1.0 - Bob   1.1
0.2 - Alice 0.1

If she then needs to pay Charlie 0.2 BTC she can doublespend that with:

1.0 - Bob 1.1
0.5 - Charlie 0.2
- Alice   0.2

Note that care does need to be taken to ensure that multiple rounds of
this always leave at least one input unchanged.


1) https://github.com/bitcoin/bitcoin/pull/6176#issuecomment-105630255

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Re: [Bitcoin-development] First-Seen-Safe Replace-by-Fee

2015-05-26 Thread Tom Harding

I think this is a significant step forward.

I suggest you also need to ensure that no inputs can be removed or 
changed (other than scriptsigs) -- only added.  Otherwise, the semantics 
change too much for the original signers.  Imagine a tx with two inputs 
from different parties.  Should it be easy for party 1 to be able to 
eliminate party 2 as a contributor of funds?  It's not difficult to 
imagine real-world consequences to not having contributed to the 
transaction.  And unless you can think of a reason, tx-level attributes 
like nLocktime should not change either.

The result would be something very like CPFP, but with the new inputs 
and outputs merged into the original tx, keeping most of the overhead 
savings you describe.

It should be submitted to bitcoin/bitcoin because like most inconsistent 
relay policies, inconsistently deployed FSS RBF invites attacks (see 
https://gist.github.com/aalness/a78e3e35b90f52140f0d).

Generally, to be kind to zeroconf:

  - Align relay and validation rules
  - Keep first-seen
  - Relay double-spends as alerts
  - Allow nLocktime transactions into the mempool a bit before they 
become final
  - ...

It's not unlike making a best-effort to reduce sources of malleability.  
FSS RBF should be compatible with this if deployed consistently.



On 5/25/2015 10:13 PM, Peter Todd wrote:
 Summary
 ---

 First-seen-safe replace-by-fee (FSS RBF) does the following:

 1) Give users effective ways of getting stuck transactions unstuck.
 2) Use blockchain space efficiently.

 without:

 3) Changing the status quo with regard to zeroconf.

 The current Bitcoin Core implementation has first-seen mempool
 behavior. Once transaction t1 has been accepted, the transaction is
 never removed from the mempool until mined, or double-spent by a
 transaction in a block. The author's previously proposed replace-by-fee
 replaced this behavior with simply accepting the transaction paying the
 highest fee.

 FSS RBF is a compromise between these two behaviors. Transactions may be
 replaced by higher-fee paying transactions, provided that all outputs in
 the previous transaction are still paid by the replacement. While not as
 general as standard RBF, and with higher costs than standard RBF, this
 still allows fees on transaction to be increased after the fact with
 less cost and higher efficiency than child-pays-for-parent in many
 common situations; in some situations CPFP is unusable, leaving RBF as
 the only option.


 Semantics
 -

 For reference, standard replace-by-fee has the following criteria for
 determining whether to replace a transaction.

 1) t2 pays  fees than t1

 2) The delta fees pay by t2, t2.fee - t1.fee, are = the minimum fee
 required to relay t2. (t2.size * min_fee_per_kb)

 3) t2 pays more fees/kb than t1

 FSS RBF adds the following additional criteria to replace-by-fee before
 allowing a transaction t1 to be replaced with t2:

 1) All outputs of t1 exist in t2 and pay = the value in t1.

 2) All outputs of t1 are unspent.

 3) The order of outputs in t2 is the same as in t1 with additional new
 outputs at the end of the output list.

 4) t2 only conflicts with a single transaction, t1

 5) t2 does not spend any outputs of t1 (which would make it an invalid
 transaction, impossible to mine)

 These additional criteria respect the existing first-seen behavior of
 the Bitcoin Core mempool implementation, such that once an address is
 payed some amount of BTC, all subsequent replacement transactions will
 pay an equal or greater amount. In short, FSS-RBF is zeroconf safe and
 has no affect on the ability of attackers to doublespend. (beyond of
 course the fact that any changes what-so-ever to mempool behavior are
 potential zeroconf doublespend vulnerabilities)


 Implementation
 --

 Pull-req for git HEAD: https://github.com/bitcoin/bitcoin/pull/6176

 A backport to v0.10.2 is pending.

 An implementation of fee bumping respecting FSS rules is available at:

 https://github.com/petertodd/replace-by-fee-tools/blob/master/bump-fee.py


 Usage Scenarios
 ---

 Case 1: Increasing the fee on a single tx
 -

 We start with a 1-in-2-out P2PKH using transaction t1, 226 bytes in size
 with the minimal relay fee, 2.26uBTC. Increasing the fee while
 respecting FSS-RBF rules requires the addition of one more txin, with
 the change output value increased appropriately, resulting in
 transaction t2, size 374 bytes. If the change txout is sufficient for
 the fee increase, increasing the fee via CPFP requires a second
 1-in-1-out transaction, 192 bytes, for a total of 418 bytes; if another
 input is required, CPFP requires a 2-in-1-out tx, 340 bytes, for a total
 of 566 bytes.

 Benefits: 11% to 34%+ cost savings, and RBF can increase fees even in
cases where the original transaction didn't have a change
output.


 Case 2: Paying multiple recipients in succession
 

Re: [Bitcoin-development] First-Seen-Safe Replace-by-Fee

2015-05-26 Thread Gregory Maxwell
On Tue, May 26, 2015 at 5:54 PM, Tom Harding t...@thinlink.com wrote:
  It's not difficult to
 imagine real-world consequences to not having contributed to the
 transaction.

I'm having a hard time. Can you help me understand a specific case
where this makes a difference.

It appears to be a gratuitous requirement;  if I have another unused
input that happens to be larger by the required fee-- why not just use
it?

The inherent malleability of signatures makes it unreliable to depend
on the signature content of a transaction until its good and buried,
regardless. And an inability to replace an input means you could not
RBF for additional fees without taking change in more cases; there
ought to be a benefit to that.

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Re: [Bitcoin-development] First-Seen-Safe Replace-by-Fee

2015-05-26 Thread Danny Thorpe
Apologies if this has already been stated and I missed it, but:

Can transactions in a buried block be overridden/replaced by RBF?

Or is RBF strictly limited to transactions that have not yet been
incorporated into a block?

Thanks,
-Danny

On Mon, May 25, 2015 at 10:13 PM, Peter Todd p...@petertodd.org wrote:

 Summary
 ---

 First-seen-safe replace-by-fee (FSS RBF) does the following:

 1) Give users effective ways of getting stuck transactions unstuck.
 2) Use blockchain space efficiently.

 without:

 3) Changing the status quo with regard to zeroconf.

 The current Bitcoin Core implementation has first-seen mempool
 behavior. Once transaction t1 has been accepted, the transaction is
 never removed from the mempool until mined, or double-spent by a
 transaction in a block. The author's previously proposed replace-by-fee
 replaced this behavior with simply accepting the transaction paying the
 highest fee.

 FSS RBF is a compromise between these two behaviors. Transactions may be
 replaced by higher-fee paying transactions, provided that all outputs in
 the previous transaction are still paid by the replacement. While not as
 general as standard RBF, and with higher costs than standard RBF, this
 still allows fees on transaction to be increased after the fact with
 less cost and higher efficiency than child-pays-for-parent in many
 common situations; in some situations CPFP is unusable, leaving RBF as
 the only option.


 Semantics
 -

 For reference, standard replace-by-fee has the following criteria for
 determining whether to replace a transaction.

 1) t2 pays  fees than t1

 2) The delta fees pay by t2, t2.fee - t1.fee, are = the minimum fee
required to relay t2. (t2.size * min_fee_per_kb)

 3) t2 pays more fees/kb than t1

 FSS RBF adds the following additional criteria to replace-by-fee before
 allowing a transaction t1 to be replaced with t2:

 1) All outputs of t1 exist in t2 and pay = the value in t1.

 2) All outputs of t1 are unspent.

 3) The order of outputs in t2 is the same as in t1 with additional new
outputs at the end of the output list.

 4) t2 only conflicts with a single transaction, t1

 5) t2 does not spend any outputs of t1 (which would make it an invalid
transaction, impossible to mine)

 These additional criteria respect the existing first-seen behavior of
 the Bitcoin Core mempool implementation, such that once an address is
 payed some amount of BTC, all subsequent replacement transactions will
 pay an equal or greater amount. In short, FSS-RBF is zeroconf safe and
 has no affect on the ability of attackers to doublespend. (beyond of
 course the fact that any changes what-so-ever to mempool behavior are
 potential zeroconf doublespend vulnerabilities)


 Implementation
 --

 Pull-req for git HEAD: https://github.com/bitcoin/bitcoin/pull/6176

 A backport to v0.10.2 is pending.

 An implementation of fee bumping respecting FSS rules is available at:

 https://github.com/petertodd/replace-by-fee-tools/blob/master/bump-fee.py


 Usage Scenarios
 ---

 Case 1: Increasing the fee on a single tx
 -

 We start with a 1-in-2-out P2PKH using transaction t1, 226 bytes in size
 with the minimal relay fee, 2.26uBTC. Increasing the fee while
 respecting FSS-RBF rules requires the addition of one more txin, with
 the change output value increased appropriately, resulting in
 transaction t2, size 374 bytes. If the change txout is sufficient for
 the fee increase, increasing the fee via CPFP requires a second
 1-in-1-out transaction, 192 bytes, for a total of 418 bytes; if another
 input is required, CPFP requires a 2-in-1-out tx, 340 bytes, for a total
 of 566 bytes.

 Benefits: 11% to 34%+ cost savings, and RBF can increase fees even in
   cases where the original transaction didn't have a change
   output.


 Case 2: Paying multiple recipients in succession
 

 We have a 1-in-2-out P2PKH transaction t1, 226 bytes, that pays Alice.
 We now need to pay Bob. With plain RBF we'd just add a new outptu and
 reduce the value of the change address, a 90% savings. However with FSS
 RBF, decreasing the value is not allowed, so we have to add an input.

 If the change of t1 is sufficient to pay Bob, a second 1-in-2-out tx can
 be created, 2*226=452 bytes in total. With FSS RBF we can replace t1
 with a 2-in-3-out tx paying both, increasing the value of the change
 output appropriately, resulting in 408 bytes transaction saving 10%

 Similar to the above example in the case where the change address of t1
 is insufficient to pay Bob the end result is one less transaction output
 in the wallet, defragmenting it. Spending these outputs later on would
 require two 148 byte inputs compared to one with RBF, resulting in an
 overall savings of 25%


 Case 3: Paying the same recipient multiple times
 

 For 

Re: [Bitcoin-development] First-Seen-Safe Replace-by-Fee

2015-05-26 Thread Pieter Wuille
It's just a mempool policy rule.

Allowing the contents of blocks to change (other than by mining a competing
chain) would be pretty much the largest possible change to Bitcoin's
design
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Re: [Bitcoin-development] First-Seen-Safe Replace-by-Fee

2015-05-26 Thread Gregory Maxwell
On Tue, May 26, 2015 at 11:00 PM, Tom Harding t...@thinlink.com wrote:
 The bitcoin transaction is part of a real-world deal with unknown
 connections to the other parts

I'm having a hard time parsing this.  You might as well say that its
part of a weeblix for how informative it is, since you've not defined
it.

 not the case if paying parties are kicked out of the deal, and possibly
 don't learn about it right away.

The signatures of a transaction can always be changed any any time,
including by the miner, as they're not signed.

 A subset of parties to an Armory simulfunding transaction (an actual
 multi-input use case) could replace one signer's input after they broadcast
 it.

They can already do this.

 Maybe the
 receiver cares where he is paid from or is basing a subsequent decision on
 it.  Maybe a new output is being added, whose presence makes the transaction
 less likely to be confirmed quickly, with that speed affecting the business.

The RBF behavior always moves in the direction of more prefered or
otherwise the node would not switch to the replacement. Petertodd
should perhaps make that more clear.

But your maybes are what I was asking you to clarify. You said it
wasn't hard to imagine; so I was asking for specific clarification.

 With Kalle's Proof of Payment proposed standard, one payer in a two-input
 transaction could decide to boot the other, and claim the concert tickets
 all for himself.  The fact that he pays is not the only consideration in the
 real world -- what if these are the last 2 tickets?

They can already do that.

 I'd argue that changing how an input is signed doesn't change the deal.  For
 example if a different 2 of 3 multisig participants sign, those 3 people
 gave up that level of control when they created the multisig.

Then why do you not argue that changing the input set does not change
the weeblix?

Why is one case of writing out a participant different that the other
case of writing out a participant?

 Replacement is new - we have a choice what kind of warnings we need to give
 to signers of multi-input transactions.  IMHO we should avoid needing a
 stronger warning than is already needed for 0-conf.

How could a _stronger_ warning be required?

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Re: [Bitcoin-development] First-Seen-Safe Replace-by-Fee

2015-05-26 Thread Danny Thorpe
Thanks for the clarification.

So, since RBF applies only to pending transactions in the mempool awaiting
incorporation into a block, there is a window of opportunity in which the
pending tx is incorporated into a block at the same time that the spender
is constructing and publishing a replacement for that pending tx.

The replacement transaction would be rejected by the peer network as a
double spend because it conflicts with the now confirmed original tx, and
the spender will have to go back and create a new stand-alone transaction
to accomplish what they hoped to do with an RBF replacement.

So an implementation that wishes to take advantage of RBF will still need
to have a plan B implementation path to handle the corner case of a
replacement tx being rejected as a double spend.

Is this correct?

I'm just trying to get my head around the implementation cost vs benefit of
RBF in the context of my applications.

Thanks,
-Danny

On Tue, May 26, 2015 at 2:27 PM, Pieter Wuille pieter.wui...@gmail.com
wrote:

 It's just a mempool policy rule.

 Allowing the contents of blocks to change (other than by mining a
 competing chain) would be pretty much the largest possible change to
 Bitcoin's design

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Re: [Bitcoin-development] First-Seen-Safe Replace-by-Fee

2015-05-26 Thread Adam Back
I think the point is the replacement tx spends the same inputs (plus
additional inputs), so if the original tx is accepted, and your
replacement rejected, thats good news - you dont have to pay the
higher fee, the extra input remains unspent (and can be used later for
other purpose) and the extra change address is unused.

(If you had bundled extra transactions into the replacement, spending
from the additional inputs, then you'll need to resubmit those as a
separate transaction).

(You have to keep in mind re-orgs so for example the original tx could
be put into a block, and then that block could get reorged by another
block that grows into a longer chain with the replacement tx in it (or
vice versa)).

Adam

On 26 May 2015 at 23:09, Danny Thorpe danny.tho...@gmail.com wrote:
 Thanks for the clarification.

 So, since RBF applies only to pending transactions in the mempool awaiting
 incorporation into a block, there is a window of opportunity in which the
 pending tx is incorporated into a block at the same time that the spender is
 constructing and publishing a replacement for that pending tx.

 The replacement transaction would be rejected by the peer network as a
 double spend because it conflicts with the now confirmed original tx, and
 the spender will have to go back and create a new stand-alone transaction to
 accomplish what they hoped to do with an RBF replacement.

 So an implementation that wishes to take advantage of RBF will still need to
 have a plan B implementation path to handle the corner case of a
 replacement tx being rejected as a double spend.

 Is this correct?

 I'm just trying to get my head around the implementation cost vs benefit of
 RBF in the context of my applications.

 Thanks,
 -Danny

 On Tue, May 26, 2015 at 2:27 PM, Pieter Wuille pieter.wui...@gmail.com
 wrote:

 It's just a mempool policy rule.

 Allowing the contents of blocks to change (other than by mining a
 competing chain) would be pretty much the largest possible change to
 Bitcoin's design



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Re: [Bitcoin-development] First-Seen-Safe Replace-by-Fee

2015-05-26 Thread Tom Harding
On 5/26/2015 4:11 PM, Gregory Maxwell wrote:
 On Tue, May 26, 2015 at 11:00 PM, Tom Harding t...@thinlink.com wrote:
 The bitcoin transaction is part of a real-world deal with unknown
 connections to the other parts
 I'm having a hard time parsing this.  You might as well say that its
 part of a weeblix for how informative it is, since you've not defined
 it.

For example, you are paying for concert tickets.  The deal is concert 
tickets for bitcoin.  Or you're buying a company with 3 other investors.


 not the case if paying parties are kicked out of the deal, and possibly
 don't learn about it right away.
 The signatures of a transaction can always be changed any any time,
 including by the miner, as they're not signed.

Miners can't update the signature on input #0 after removing input #1.



 A subset of parties to an Armory simulfunding transaction (an actual
 multi-input use case) could replace one signer's input after they broadcast
 it.
 They can already do this.

Replacement is about how difficult it is to change the tx after it is 
broadcast and seen by observers.


 Maybe the
 receiver cares where he is paid from or is basing a subsequent decision on
 it.  Maybe a new output is being added, whose presence makes the transaction
 less likely to be confirmed quickly, with that speed affecting the business.
 The RBF behavior always moves in the direction of more prefered or
 otherwise the node would not switch to the replacement. Petertodd
 should perhaps make that more clear.

 But your maybes are what I was asking you to clarify. You said it
 wasn't hard to imagine; so I was asking for specific clarification.

Pick any one maybe.  They're only maybes because it's not realistic 
for them all to happen at once.



 With Kalle's Proof of Payment proposed standard, one payer in a two-input
 transaction could decide to boot the other, and claim the concert tickets
 all for himself.  The fact that he pays is not the only consideration in the
 real world -- what if these are the last 2 tickets?
 They can already do that.

Not without replacement, after broadcast, unless they successfully pay 
twice.



 I'd argue that changing how an input is signed doesn't change the deal.  For
 example if a different 2 of 3 multisig participants sign, those 3 people
 gave up that level of control when they created the multisig.
 Then why do you not argue that changing the input set does not change
 the weeblix?

 Why is one case of writing out a participant different that the other
 case of writing out a participant?

In the multisig input case, each signer already accepted the possibility 
of being written out.  Peter Todd's proposal is in the spirit of not 
willfully making unconfirmed txes less reliable.  I'm suggesting that 
multi-input signers should be included in the set of people for whom 
they don't get less reliable.



 Replacement is new - we have a choice what kind of warnings we need to give
 to signers of multi-input transactions.  IMHO we should avoid needing a
 stronger warning than is already needed for 0-conf.
 How could a _stronger_ warning be required?

We'd have to warn signers to multi-input txes instead of just warning 
receivers.


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