bitcoin-dev
Combined summary - On solving pinning, replacement cycling and mempool issues for bitcoin second-layers
The email outlines the considerations for creating a valid consensus-change based solution for Bitcoin L2, specifically regarding issues such as pinning and replacement cycling.
The proposed solution should maintain non-interactive properties with off-chain counterparties, minimize fee-bumping reserves and UTXO locks, prevent malicious activities while allowing competition with ongoing fee rates, and ensure security for low-value lightning payments without relying on local knowledge of historical mempool states. It should also cater to multi-party off-chain constructions, reduce witness size through efficient scripting, guard against fee manipulation by low-hashrate miners, and be compatible with solutions to forced closure of time-sensitive off-chain states. Furthermore, it should not exacerbate problems like partial or global mempool partitioning.
A potential approach involves removing package malleability with annex and sighash_anyamount semantics, inspired by Peter Todd's op_expire proposal. However, there is no concrete design yet, and due to the complexity, any solution would require end-to-end implementation for validation, particularly for the Lightning Network. There's an acknowledgment that more mainnet experimentation is needed to address pinning, replacement cycling, and miner incentives alignment with second layers, urging further research within the Bitcoin community, especially given the importance of a reliable fee market in a post-subsidy world and sustaining a decentralized mining ecosystem.
Gleb Naumenko and the author intend to devote their research efforts to resolving these issues by examining cross-layer challenges they've previously explored together, referencing their expertise with bitcoin core and rust-lightning codebases. They plan to collaborate with Elichai Turkel on mathematical verification and risk assessments of potential fixes, aiming to reduce the fee-bumping reserve and locked UTXOs for lightning users. An issue on coordinated security handling has been reopened to bolster Lightning Network security. The sender stresses the need for game theory consideration and node network resource changes, following an open and responsible Bitcoin process, anticipating that this work will take significant time, much like the package relay design discussions that have recently advanced to review phases. Input from the Bitcoin and Lightning development community is welcomed as the solutions are developed.