Back
What is Replace-By-Fee (RBF)?
Shailee Adinolfi
&
Annie Pei
General Wallet Use
Replace-By-Fee (RBF) enables users to swap out an unconfirmed transaction stuck in the mempool with a replacement that has a higher transaction fee than the original. Since Bitcoin miners generally include transactions with higher fees into blocks when the network is congested, creating a replacement transaction with a higher fee increases the chances of miners selecting and confirming a transaction.
What is Replace-By-Fee?
Replace-By-Fee (RBF) is a practical feature embedded in the Bitcoin network in which a user can replace an unconfirmed transaction with a new one that includes a higher transaction fee. This prevents transactions from getting stuck in the mempool—a place where unconfirmed transactions await inclusion in a block—because of insufficient funds.
When the network is congested, low-fee transactions take longer to confirm because Bitcoin miners, who are responsible for processing transactions, prioritize processing transactions with higher fees to maximize earnings. To address this issue, RBF enables a sender to increase the fee of a transaction after it has been sent. This also increases its attractiveness to miners for faster confirmation.
How Does RBF Work?
When you initiate a Bitcoin transaction on Leather, it’s possible to set a low, standard, or high fee. The higher the fee, the faster your transaction will be confirmed. During low-traffic times or when a transaction is not urgent, a low-fee option may save on costs. But sometimes a user can misjudge traffic or find their transaction stuck.
If a transaction with a low fee remains unconfirmed in the mempool, RBF is an option to add fees and increase its likelihood of being confirmed. Using RBF, you can broadcast a new version of the same transaction but with a higher fee. This revised transaction retains the same inputs—mainly the source of the Bitcoin—but offers a higher fee to incentivize miners to prioritize it in the next block they mine. Once the new transaction is confirmed, the original unconfirmed transaction is automatically dropped from the mempool.
Does Leather support RBF?
Users can use RBF in a transaction using Leather wallet by following these steps:
After sending a transaction, if it gets stuck due to a low fee, go to the “Activity” tab in your Leather wallet. The user will know their transaction is stuck if its status is displayed as “unconfirmed” or “pending” for a significant amount of time since initiating the transaction.
Choose “Increase fee” on the transaction you want to modify
Set the increase amount and submit.
Leather also shows users the current fee rate, transaction ID (TXID), and status (pending, confirmed, etc.). However, the user should always be aware of the risks associated with RBF, such as the potential for double-spending and transaction errors. RBF must be used judiciously, especially during times of high network activity.
Why Use RBF?
RBF is a useful tool for users who have an unconfirmed transaction stuck in the mempool and want to speed up the process of being selected and confirmed by Bitcoin miners. By replacing the unconfirmed transaction with a new one with a higher transaction fee, the user can increase the likelihood of it being selected and confirmed by a Bitcoin miner now that they have a greater incentive.
There are two primary types of RBF:
Full RBF allows a transaction to be replaced multiple times with progressively higher fees until confirmed.
Opt-In RBF requires the transaction to be initially marked as replaceable by setting a specific field (nSequence) to a value below a predefined threshold. This ensures only transactions explicitly marked for replacement can benefit from RBF.
Benefits of RBF
Higher chance of transaction being confirmed: If an unconfirmed transaction is stuck in the mempool, the user can use RBF to replace it with a new transaction with a higher transaction fee. This increases the transaction’s chances of being confirmed faster since miners prioritize ones with higher fees, especially when the network is congested.
Greater control and flexibility over transactions: If a Bitcoin user wishes to speed up the confirmation process and release their transaction from the mempool, RBF allows them to do so by increasing the transaction’s fee. RBF is a straightforward and flexible feature that gives users more control over their transactions.