V3 transaction policy for anti-pinning

V3 transaction policy for anti-pinning

Original Postby moonsettler

Posted on: January 7, 2024 18:16 UTC

In the realm of Bitcoin transactions, particularly when dealing with fee bumping mechanisms for ephemeral anchor type transactions, an important consideration arises concerning the allowance of multiple unconfirmed ancestors.

The question at hand is whether there is a compelling justification for permitting more than one unconfirmed ancestor within such a transaction framework.

Ephemeral anchor type fee bump transactions are essentially a method used to accelerate the processing of a stuck transaction by increasing the fee paid to miners. This process becomes complex and security concerns emerge when the transactions have unconfirmed ancestors, i.e., previous transactions that are themselves not yet confirmed on the blockchain.

A key issue attached to having multiple unconfirmed ancestors is the potential for mempool pinning. Mempool pinning is a tactic whereby an attacker may craft a transaction with low fees and many child transactions depending on it, effectively 'pinning' it into the mempool, the holding area for unconfirmed transactions. This can lead to scenarios where users are forced to pay higher fees to unpin their legitimate transactions.

Limiting ephemeral anchor type transactions to having only the anchor itself as unconfirmed could mitigate some of the risks associated with mempool pinning. By restricting the complexity of the transaction chain, it would be harder for attackers to exploit the system using this tactic, hence maintaining the integrity of the mempool and ensuring fair and efficient processing of transactions.

By examining these nuances of Bitcoin's transaction handling mechanisms, we delve into the ongoing efforts to optimize network performance while securing it against potential abuses. It's clear that careful consideration must be given to the balance between flexibility in transaction creation and the safeguarding of the transaction processing ecosystem.