V3 transaction policy for anti-pinning

V3 transaction policy for anti-pinning

Original Postby ajtowns

Posted on: January 8, 2024 10:53 UTC

The discussion revolves around the potential centralization risks associated with miners offering an out-of-band fee payment API and the efficacy of a soft fork as a countermeasure.

The proposed soft fork would necessitate that ephemeral anchors, which serve as temporary transaction references, be spent in the same block they are created to prevent them from becoming persistent 'dust' in the Unspent Transaction Output (UTXO) set.

Critics argue that such a soft fork might not be effective if economic incentives favor the use of out-of-band payments that encourage centralization. Miners could circumvent the soft fork by establishing a new standard for ephemeral anchors with a different scriptPubKey pattern, supporting it with a network of nodes that give preference to this new system. If wallet developers and users adopt this new standard to save on transaction fees, the soft fork would fail to mitigate the centralization risk.

An alternative soft-fork approach is suggested where an ephemeral anchor output must be spent within the same block it was created, thereby removing it from the UTXO set post-processing. This proposition aims to address issues arising from bugs that lead to residual dust in the UTXO set. However, this approach does not address the incentives for out-of-band payments and also raises concerns about the validity of child transactions in the event of a blockchain reorganization, should the child transaction not be included in the same block as its parent.

In essence, while soft forks could theoretically enforce immediate spending of ephemeral anchors to combat network centralization, their real-world effectiveness is questionable when confronted with strong opposing economic forces and the adaptability of network participants.