BA-05 · LESSON 08

RBF

KEY DEFINITIONS

Terms used in this lesson

RBF: Replace-by-fee: a policy for replacing an unconfirmed transaction with a conflicting one that pays more.
Transaction ID: The identifier produced by hashing a Bitcoin transaction’s non-witness serialization.
Identifier: Identifier: a value used to distinguish one request, object, or participant from another.

Replace-by-fee uses sequence and mempool rules to replace an unconfirmed transaction with a higher-fee conflict.

65 min Difficulty 2/5 Not started

VISUAL MODEL

See the whole mechanism before going step by step

Use the diagrams to orient yourself. Then the guided explanation below teaches every part in depth.

4 explanatory views

CONCEPT-SPECIFIC MAP · transaction bytesA transaction consumes prior outputs and commits new onesSelect any state to inspect its exact role.

RELATIONSHIP MAPInputs, rule, and outputs

01
OUTPOINTSTxid : output index
Every input references one specific prior transaction output.
02
AUTHORIZATIONWitness or scriptSig
Spending data satisfies the prior output's locking condition.
03
SERIALIZATIONRBF
The RBF mechanism determines which transaction fields or identifiers matter.
04
NEW OUTPUTSAmount and script
Payment and change outputs are newly created state.
05
IDENTIFIERSTxid and wtxid
Double-SHA256 identifiers commit to defined byte regions.

Rule shown: Inputs name exact outpoints; outputs allocate value; signatures authorize the committed spending context.

STAGE 1 OF 5OUTPOINTS: Txid : output index

Every input references one specific prior transaction output.

Governing relationship: Inputs name exact outpoints; outputs allocate value; signatures authorize the committed spending context. Complete path: 1. OUTPOINTS, Txid : output index. Every input references one specific prior transaction output. 2. AUTHORIZATION, Witness or scriptSig. Spending data satisfies the prior output's locking condition. 3. SERIALIZATION, RBF. The RBF mechanism determines which transaction fields or identifiers matter. 4. NEW OUTPUTS, Amount and script. Payment and change outputs are newly created state. 5. IDENTIFIERS, Txid and wtxid. Double-SHA256 identifiers commit to defined byte regions.

1. State transitionWhat exists, what changes, and what results

BEFORE

The original transaction spends 100,000 sats and creates an 80,000-sat payment, 19,500-sat change output, and 500-sat fee.

MECHANISM

The original transaction spends specific inputs and may signal replaceability through sequence values under opt-in policy, though node policy details can evolve.

AFTER

RBF revises an unconfirmed payment attempt through a new conflicting transaction, not a mutation of mined history.

Text equivalent: Starting from The original transaction spends 100,000 sats and creates an 80,000-sat payment, 19,500-sat change output, and 500-sat fee. The mechanism begins when The original transaction spends specific inputs and may signal replaceability through sequence values under opt-in policy, though node policy details can evolve. The resulting lesson is RBF revises an unconfirmed payment attempt through a new conflicting transaction, not a mutation of mined history.

2. Mechanism pathSelect a stage to inspect its job

STAGE 1 OF 5

Create an unconfirmed transaction

The original transaction spends specific inputs and may signal replaceability through sequence values under opt-in policy, though node policy details can evolve.

Complete path: 1. Create an unconfirmed transaction: The original transaction spends specific inputs and may signal replaceability through sequence values under opt-in policy, though node policy details can evolve. 2. Build a conflict: The replacement spends one or more of the same inputs. It can increase fee by reducing change, adding inputs, or altering outputs under the sender's intent. 3. Apply replacement policy: A node compares fees, feerate-related conditions, conflicts, and resource limits under its current policy. Consensus does not require mempools to replace. 4. Evict replaced transactions: If accepted, the node removes the original and affected descendants, then stores and relays the replacement. 5. Confirm one history: A valid block can include only one spend of the shared input. Once confirmed, the competing unconfirmed transaction is invalid against that chain state.

3. Rule and failure boundaryWhat accepts the result and where it can stop

ACCEPTED PATH

At pinned Bitcoin Core v31.0, a direct conflict must pass other rules, absolute and incremental fee tests, the limit of at most 100 distinct conflicting clusters, and strict feerate-diagram improvement.

CHANGED CONDITION

Insufficient aggregate fee, bandwidth increment, the distinct-conflicting-cluster limit, or diagram improvement rejects; adding a new unconfirmed input is not the removed historical rule.

Important distinction: RBF lets a sender reverse a confirmed payment. RBF is an unconfirmed mempool process. Replacing a confirmed spend would require a chain reorganization, not ordinary RBF.

Text equivalent: The accepted path is enforced by At pinned Bitcoin Core v31.0, a direct conflict must pass other rules, absolute and incremental fee tests, the limit of at most 100 distinct conflicting clusters, and strict feerate-diagram improvement. If the required condition changes, Insufficient aggregate fee, bandwidth increment, the distinct-conflicting-cluster limit, or diagram improvement rejects; adding a new unconfirmed input is not the removed historical rule.

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Learn the idea

Replace-by-fee, or RBF, is mempool policy for replacing an unconfirmed transaction with a conflicting transaction that pays more under the node's replacement rules. A conflict spends at least one of the same inputs. Replacement changes the transaction and normally changes its txid; it does not edit the old transaction in place.

GUIDED EXPLANATION1/5 ideas inspected

Create an unconfirmed transaction

The original transaction spends specific inputs and may signal replaceability through sequence values under opt-in policy, though node policy details can evolve.

The worked example follows the explanation

Inspect every idea above to open it.

Important distinction“RBF lets a sender reverse a confirmed payment.”

RBF is an unconfirmed mempool process. Replacing a confirmed spend would require a chain reorganization, not ordinary RBF.

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