The discussion stemmed from a proposal reposted for community scrutiny, which can be found at Peter Todd's blog: https://petertodd.org/2024/one-shot-replace-by-fee-rate. An alternative transaction replacement cycle was proposed, which utilizes two confirmed inputs and five transactions to manipulate the feerate and absolute fee structure within the Bitcoin network. This technique involves cycling through these transactions, leveraging both RBFr and the current RBF rules, to prioritize certain transactions while making others less attractive for miners due to their low-feerate parent.

The strategy described aims to increase the feerate to ensure inclusion in the next block while reducing the absolute fee paid by re-broadcasting the same transactions repeatedly. The only transaction appealing for inclusion by miners would be a small RBFr transaction with a feerate set for the bottom of the next block. In practical terms, if this transaction were mined under the current conditions, it would result in the network relaying transactions exceeding 205,000 virtual bytes (vB) every few seconds, costing approximately 4000 satoshis every few blocks. Given that the example provided is considered minimal, there are implications that the bandwidth costs could potentially be escalated further.

The detailed analysis included transaction weights, fees, and a diagrammatic representation to aid comprehension. Based on the assessment of the replacement cycle, the conclusion drawn raises concerns about the safety of implementing the One Shot Replace By Fee Rate proposal as currently designed. It suggests that, should all replacements function as hypothesized and the scenario proves compatible with the existing proposal, the deployment of One Shot RBFr might pose significant risks to the Bitcoin network’s stability and therefore may not be advisable.

This critique reflects a thoughtful and technical exploration into the dynamics of transaction fees and block space economics within the Bitcoin protocol, emphasizing the need for careful consideration before introducing changes to its fee mechanisms. The sender signs off by implying that unless there is an oversight in their analysis, the One Shot RBFr could have unintended consequences if integrated into the network.