Over Half of Replace-by-Fee-Rate Replacements Are Mined

In a recent communication, Boris Nagaev discussed the rationale behind choosing a specific coefficient for a prototype designed to mitigate certain security risks, specifically DoS (Denial of Service) attacks and pinning attacks, within a blockchain network. He explored various coefficients by illustrating their impact through mathematical examples: a 2x coefficient results in significant protection against DoS attacks due to its costliness for attackers, while still serving the primary function of preventing pinning attacks. This balance is crucial for maintaining network security without over-complicating the process.

Nagaev highlighted that the choice of a 2x multiplier for the fee rate adjustment in the prototype was driven by several factors. Firstly, it establishes a strong deterrent against DoS attacks by making them financially unfeasible. Secondly, this coefficient level effectively prevents pinning attacks, which can be detrimental to the network's stability. Thirdly, it ensures that the incentive structure for miners remains attractive, encouraging them to participate in the network. Lastly, the simplicity of implementation was considered, as the current version of Bitcoin Core (v26.0) does not support multiplication or division operations directly. Thus, the 2x adjustment was implemented through simple addition, doubling the fee rate by adding it to itself.

Despite settling on a 2x coefficient for the initial release, Nagaev expressed a personal preference for a lower ratio, specifically 1.25, believing it to be a reasonable compromise. However, he opted for a more conservative approach in the prototype to prioritize the minimization of DoS attack risks. His decision underscores a careful consideration of security, functionality, and practicality in developing solutions to enhance the resilience of blockchain networks against malicious activities. For further details on his work and insights, Nagaev provided a link to Peter Todd's website.