Censorship Resistant Transaction Relay - Taking out the garbage(man)

In recent developments, a group advocating for transaction "filtering" has initiated a sybil attack on Libre Relay nodes. This assault involves operating nodes under the "garbageman" branch, which deceitfully claims to offer NODE_LIBRE_RELAY service bit functionality, but in reality, discards transactions that genuine Libre Relay nodes would typically relay. This maneuver is part of a broader strategy to obstruct transactions the attackers disapprove of by significantly raising the operational costs for Libre Relay nodes, especially as defenses against bitcoin's DoS attacks improve. Chris Guida's insights on these matters shed light on the attackers' intentions to escalate their efforts, highlighting both the sophistication and the potential ramifications of these sybil attacks on transaction relaying within the bitcoin network.

The effectiveness of such sybil attacks hinges on the attacker's ability to monopolize the connection points of a target node with malicious nodes or compromised listening nodes. For example, Bitcoin Core establishes eight outgoing connections for transaction relaying to varied IP addresses, complicating the attacker's task of dominating a node's external connections. However, considering the Libre Relay's requirement for additional connections to other Libre nodes, an attacker would need to control a substantial portion of these nodes to achieve significant disruption. This scenario illustrates the technical challenges and scale of resources required for a successful sybil attack against transaction relaying mechanisms.

Gregory Maxwell and others have proposed methods to mitigate these sybil attacks, one of which involves leveraging Bitcoin Core's defense system for block propagation—namely, the feeler node system. This system periodically attempts connections to new nodes to ensure access to the most-work chain, thus providing a framework that could be adapted for protecting transaction relaying from similar attacks. Such approaches underscore the ongoing efforts within the bitcoin community to secure transaction propagation against malicious actors.

Furthermore, the discussion introduces advanced strategies for enhancing the resilience of transaction relaying against censorship and manipulation. These include evaluating peers based on the new transaction fees they advertise, employing cluster mempool functionality for optimal transaction ordering, and set-reconciliation techniques for efficient data sharing among nodes. By prioritizing connections with peers that offer access to higher-fee transactions, nodes can potentially identify and avoid sybil attackers, further strengthening the network's defense mechanisms.

Privacy concerns and manual peering with trusted nodes also emerge as critical considerations in this context. The latter suggests a social solution to the technical challenge of sybil attacks, advocating for direct connections among nodes operated by individuals with established trust relationships. This approach, coupled with technical safeguards, represents a multifaceted strategy to safeguard the bitcoin network's integrity against sophisticated sybil attacks, highlighting the community's commitment to maintaining open and reliable transaction relaying channels.