The Pinning & Replacement Problem Set

In an email sent by John Carvalho, CEO of Synonym.to, he addresses the potential failures in Bitcoin's layers and technologies when miners misbehave or when the blocks and mempool are consistently full. He describes this as a "law" of Bitcoin and blockchains. Carvalho expresses his belief that it was unwise to tamper with mempool policies, such as Replace-By-Fee (RBF) and mempoolfullrbf, as these changes have disrupted the fragile harmony and utility of Bitcoin. He argues that mempoolfullrbf eliminates the ability for users to express their intent on whether to pin or replace a transaction, resulting in problems for Lightning Network as well.

Carvalho suggests several options for Core, the developers of Bitcoin, to address these issues. Firstly, they could attempt to revert mempoolfullrbf and restore the first-seen policy. However, it is uncertain whether this would be effective or sufficient. Secondly, they could implement additional default policies that allow users to flag how they want their transactions handled, such as specifying whether a transaction should be pinned or replaced. Carvalho considers this to be the best option as it enables miners to understand and fulfill users' preferences, thereby providing utility and aligning incentives.

Alternatively, Core could choose to remove all policy and allow the market to adapt to the resulting chaos. This option is similar to doing nothing and allowing a fragmented mempool environment to emerge, where large businesses form private contracts with miners and pools to support their own unsupported policies in order to enhance customer experiences. Lastly, Carvalho humorously suggests inventing a miraculous crypto solution that is beyond his imagination.

While Carvalho acknowledges his limited knowledge regarding mempool research and its impact on the discussed options and problems, he remains skeptical that the dynamics outlined can be entirely eliminated.