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From: Isaac Eiter <eiter.isaac@gmail.com>
Date: Sun, 14 Apr 2024 15:12:13 -0500
Message-ID: <CAEQht-vBi65qfj1gNp7m1vBk+9C_2WDwSurni=FTmxdAT_Cbgw@mail.gmail.com>
Subject: Re: [bitcoindev] Draft BIP for User-Defined Transaction Flags Policy
 & Strategy
To: Bitcoin Error Log <bitcoinerrorlog@gmail.com>
Cc: Bitcoin Development Mailing List <bitcoindev@googlegroups.com>
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Mailing-list: list bitcoindev@googlegroups.com; contact bitcoindev+owners@googlegroups.com

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"Example: Retailers or service providers accepting Bitcoin in a
face-to-face setting need transactions to be final immediately to prevent
fraud." - Transactions can't be final until included in a block. Pretending
that adding a flag to the transaction makes it "final" is going to give a
false sense of security for those accepting 0-conf transactions. On-chain
point-of-sale payments will never be economically feasible in a bitcoinized
world. And if the point-of-sale payment is large enough to justify using
on-chain, then it's also worth waiting to see it in a block.

"Automated payments for services" - If you are using recurring payments,
time isn't of the essence. The guarantee of a "DNR" is pointless, there's
no reason to rely on a transaction flag instead of waiting for confirmation
via presence in a block.

"DNR potentially improves next block fee competition" - I'm not sure this
solves a real problem.

On Sun, Apr 14, 2024 at 10:16=E2=80=AFAM Bitcoin Error Log <
bitcoinerrorlog@gmail.com> wrote:

> *Posted here:*
> https://github.com/BitcoinAndLightningLayerSpecs/balls/blob/main/balls-00=
138.md
>
> *Full text here:*
>
> BIP: XXXX
> Title: User-Defined Transaction Flags Policy & Strategy
> Author: John Carvalho
> Type: Standards Track
> Created: Apr 15, 2024
> Status: Draft
> Abstract
>
> This BIP introduces a utility-optimized strategy for Bitcoin mempool
> policy with new transaction signaling mechanisms, including Do-Not-Replac=
e
> (DNR) and Replace-by-Fee (RBF), to enhance control over transaction
> handling and improve the network's economic efficiency.
> Motivation
>
> Enhancing user autonomy and network efficiency through precise,
> user-defined transaction signals that integrate seamlessly with Bitcoin's
> decentralized nature and existing economic models.
> Specification Transaction Signals
>
>    -
>
>    Do-Not-Replace (DNR): Ensures transactions are not replaced once
>    broadcast. This flag is encoded using a specific bit in the transactio=
n=E2=80=99s
>    version field, similar to RBF, but with inverse logic.
>    -
>
>    Replace-by-Fee (RBF): Allows the sender to signal that the transaction
>    may be replaced by another transaction with a higher fee. This mechani=
sm is
>    used to increase the likelihood of a transaction being picked up by mi=
ners
>    in conditions of high network congestion, ensuring timely processing.
>
> Encoding
>
> The new flag signal, DNR, could be encoded similarly to existing RBF
> flags, with complementary mempool handling and conflict-resolution logic
> for default local enforcement.
>
>
> Rationale
>
> Addresses the need for predictable transaction handling while respecting
> the decentralized, incentive-driven nature of network participants.
>
> Note: This proposal only discusses subjective, arbitrary mempool policy
> and handling. It is assumed that any local policy that enforces preferred
> hardware limits is out of scope and remains separately necessary.
> Strategic Options for Mempool Evolution
>
> There are three strategic options for evolving the Bitcoin mempool
> management, where only one should be optimized:
>
>
>    -
>
>    User-defined (The ideal, optimistic option): This approach involves
>    creating and default-obeying various transaction flags like RBF and DN=
R to
>    facilitate specific goals of transactors. The primary tradeoff is that
>    these flags are suggestions and can be overridden by miners, which mea=
ns
>    they are not enforceable but serve as strong hints to improve transact=
ion
>    predictability and network efficiency.
>    -
>    -
>
>    Node-defined (The chaotic, centralizing option): This strategy would
>    encourage third-party mempool providers to implement their subjective
>    preferences on transaction facilitation. The significant tradeoff here=
 is
>    the potential fracturing of the mempool and private, mining-pool-centr=
ic
>    inclusion requirements, which could lead to increased centralization a=
nd
>    censorship.
>    -
>    -
>
>    Miner-defined (The rational, pessimistic option): The final strategy
>    involves removing all policies and flags, allowing miners to decide ba=
sed
>    on transaction fees or other out-of-band terms. This approach simplifi=
es
>    the network at the cost of significantly reducing the utility for user=
s who
>    may need special handling for their transactions.
>
> Arguments for User-Definition
>
> Option 1 is favored here because it provides a balanced approach that
> enhances user experience and network functionality without overly
> complicating the Bitcoin protocol or risking centralization. By
> standardizing flags that indicate user preferences, we can achieve greate=
r
> harmony and utility within the Bitcoin network, supporting diverse user
> needs while maintaining decentralization.
>
> More importantly, we may be able to prevent mempool fragmentation and
> privatization to miners and pools for direct transaction inclusion by
> intentionally supporting flags that better compete and match transaction
> use cases within the open mempool network instead of censoring them
> arbitrarily.
>
>
> Economic Implications
>
> The introduction of these signals could influence transaction fee markets
> and network congestion patterns:
>
>    -
>
>    DNR potentially improves next-block fee competition and improves
>    network throughput by providing clearer signals about transaction
>    permanence and relevance.
>    -
>
>    RBF allows for dynamic fee adjustments that can enhance the certainty
>    of transaction confirmations during peak times, benefiting users who n=
eed
>    timely processing.
>
> Do-Not-Replace (DNR) Use Cases
>
> DNR is valuable in scenarios where transaction finality is crucial upon
> submission, without the risk of later alterations due to increased fees.
> Here are some specific use cases:
>
>    -
>
>    Point-of-Sale Transactions:
>    -
>
>       Example: Retailers or service providers accepting Bitcoin in a
>       face-to-face setting need transactions to be final immediately to p=
revent
>       fraud.
>       -
>
>       Usage: By using the DNR flag, merchants can ensure that once a
>       transaction is broadcast, it cannot be replaced, thereby securing t=
he
>       payment process at the point of sale.
>       -
>
>    Wage Payments:
>    -
>
>       Example: Employers paying salaries in Bitcoin require certainty
>       that the transaction amounts cannot be altered once sent.
>       -
>
>       Usage: DNR provides employers the confidence to execute payroll
>       transactions knowing that the payments cannot be replaced or cancel=
ed,
>       ensuring employees receive the exact intended amounts.
>       -
>
>    Automated Payments for Services:
>    -
>
>       Example: Subscription services where automated payments are
>       scheduled and should not be subject to change once initiated.
>       -
>
>       Usage: DNR can be applied to ensure that automated recurring
>       payments are processed without the risk of being replaced, thus sim=
plifying
>       financial planning and contract enforcement.
>
> Replace-by-Fee (RBF) Use Cases
>
> RBF is essential for transactions where timing and confirmation speed are
> more critical than the immediacy of finality. Here are applicable scenari=
os:
>
>    -
>
>    High-Frequency Trading:
>    -
>
>       Example: Traders on cryptocurrency exchanges who need to rapidly
>       adjust their positions based on market conditions.
>       -
>
>       Usage: RBF allows traders to increase the fee on a transaction if
>       it's not getting confirmed quickly enough, enabling them to ensure =
timely
>       executions in response to market movements.
>       -
>
>    Emergency Service Payments:
>    -
>
>       Example: Payments for time-sensitive services, such as premium fast
>       delivery or emergency technical services.
>       -
>
>       Usage: When quick service delivery is critical, RBF enables the
>       sender to increase the transaction fee to speed up the confirmation
>       process, ensuring that the transaction is prioritized by miners.
>       -
>
>    Bidding in Auctions:
>    -
>
>       Example: Participants in online auctions who need to ensure their
>       payments go through before the auction closes.
>       -
>
>       Usage: Auction participants can use RBF to adjust their transaction
>       fees to outpace other transactions in times of network congestion, =
securing
>       their winning bids.
>       -
>
>    Dynamic Fee Management for Wallets:
>    -
>
>       Example: Users sending non-urgent transactions who want to minimize
>       fees but are willing to increase them if network conditions change.
>       -
>
>       Usage: RBF provides flexibility, allowing users to start with a
>       lower fee and only increase it if the transaction confirmation is d=
elayed,
>       optimizing their transaction fee expenditures.
>
> Adoption and Transition Strategy & Requirements
>
> It is implicit, until now, that within this strategy is a requirement for
> Core and other implementations to abandon strategies within Option 2, by
> specifically removing and rejecting policy tools like mempoolfullrbf, or
> other attempts to overrule, filter, or otherwise filter and hamper the
> propagation of valid, non-destructive transactions.
>
> This proposal is presented to the community for feedback, focusing on
> gathering input from wallet developers, miners, and node operators to
> ensure broad support and understanding of the benefits and implications o=
f
> these new transaction signals.
>
> --
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<div dir=3D"ltr"><div><span style=3D"background-color:transparent;font-size=
:11pt;color:rgb(0,0,0);font-family:Arial,sans-serif">&quot;Example: Retaile=
rs or service providers accepting Bitcoin in a face-to-face setting need tr=
ansactions to be final immediately to prevent fraud.&quot; - </span><span s=
tyle=3D"background-color:transparent;color:rgb(0,0,0);font-family:Arial,san=
s-serif;font-size:11pt">Transactions can&#39;t be final until included in a=
 block. Pretending that adding a flag to the transaction makes it &quot;fin=
al&quot; is going to give a false sense of security for those accepting 0-c=
onf transactions. On-chain point-of-sale payments will never be economicall=
y feasible in a bitcoinized world. And if the point-of-sale payment is larg=
e enough to justify using on-chain, then it&#39;s also worth waiting to see=
 it in a block.</span></div><div><span style=3D"background-color:transparen=
t;font-size:11pt;color:rgb(0,0,0);font-family:Arial,sans-serif"><br></span>=
</div><div><span style=3D"background-color:transparent;font-size:11pt;color=
:rgb(0,0,0);font-family:Arial,sans-serif">&quot;Automated payments for serv=
ices&quot; - If you are using recurring payments, time isn&#39;t of the ess=
ence. The guarantee of a &quot;DNR&quot; is pointless, there&#39;s no reaso=
n to rely on a transaction flag instead of waiting for confirmation via pre=
sence in a block.</span></div><div><span style=3D"background-color:transpar=
ent;font-size:11pt;color:rgb(0,0,0);font-family:Arial,sans-serif"><br></spa=
n></div><div><span style=3D"background-color:transparent;font-size:11pt;col=
or:rgb(0,0,0);font-family:Arial,sans-serif">&quot;DNR potentially improves =
next block fee competition&quot; - I&#39;m not sure this solves a real prob=
lem.</span></div><br><div class=3D"gmail_quote"><div dir=3D"ltr" class=3D"g=
mail_attr">On Sun, Apr 14, 2024 at 10:16=E2=80=AFAM Bitcoin Error Log &lt;<=
a href=3D"mailto:bitcoinerrorlog@gmail.com">bitcoinerrorlog@gmail.com</a>&g=
t; wrote:<br></div><blockquote class=3D"gmail_quote" style=3D"margin:0px 0p=
x 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><b>Pos=
ted here:</b> <a href=3D"https://github.com/BitcoinAndLightningLayerSpecs/b=
alls/blob/main/balls-00138.md" target=3D"_blank">https://github.com/Bitcoin=
AndLightningLayerSpecs/balls/blob/main/balls-00138.md</a><br><div><br></div=
><div><b>Full text here:</b></div><div><br></div><div><p dir=3D"ltr" style=
=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-=
size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:tr=
ansparent;font-variant-numeric:normal;font-variant-east-asian:normal;font-v=
ariant-alternates:normal;vertical-align:baseline">BIP: XXXX</span><span sty=
le=3D"font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);backgrou=
nd-color:transparent;font-variant-numeric:normal;font-variant-east-asian:no=
rmal;font-variant-alternates:normal;vertical-align:baseline"><br></span><sp=
an style=3D"font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);ba=
ckground-color:transparent;font-variant-numeric:normal;font-variant-east-as=
ian:normal;font-variant-alternates:normal;vertical-align:baseline">Title: U=
ser-Defined Transaction Flags Policy &amp; Strategy</span><span style=3D"fo=
nt-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color=
:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;fon=
t-variant-alternates:normal;vertical-align:baseline"><br></span><span style=
=3D"font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background=
-color:transparent;font-variant-numeric:normal;font-variant-east-asian:norm=
al;font-variant-alternates:normal;vertical-align:baseline">Author: John Car=
valho</span><span style=3D"font-size:11pt;font-family:Arial,sans-serif;colo=
r:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-=
variant-east-asian:normal;font-variant-alternates:normal;vertical-align:bas=
eline"><br></span><span style=3D"font-size:11pt;font-family:Arial,sans-seri=
f;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal=
;font-variant-east-asian:normal;font-variant-alternates:normal;vertical-ali=
gn:baseline">Type: Standards Track</span><span style=3D"font-size:11pt;font=
-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transparent;font=
-variant-numeric:normal;font-variant-east-asian:normal;font-variant-alterna=
tes:normal;vertical-align:baseline"><br></span><span style=3D"font-size:11p=
t;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transparen=
t;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant-a=
lternates:normal;vertical-align:baseline">Created: Apr 15, 2024</span><span=
 style=3D"font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);back=
ground-color:transparent;font-variant-numeric:normal;font-variant-east-asia=
n:normal;font-variant-alternates:normal;vertical-align:baseline"><br></span=
><span style=3D"font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0=
);background-color:transparent;font-variant-numeric:normal;font-variant-eas=
t-asian:normal;font-variant-alternates:normal;vertical-align:baseline">Stat=
us: Draft

</span></p><span dir=3D"ltr" style=3D"line-height:1.38;margin-top:16pt;marg=
in-bottom:4pt"><span style=3D"font-size:14pt;font-family:Arial,sans-serif;c=
olor:rgb(67,67,67);background-color:transparent;font-weight:700;font-varian=
t-numeric:normal;font-variant-east-asian:normal;font-variant-alternates:nor=
mal;vertical-align:baseline">Abstract</span></span><p dir=3D"ltr" style=3D"=
line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size=
:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transp=
arent;font-variant-numeric:normal;font-variant-east-asian:normal;font-varia=
nt-alternates:normal;vertical-align:baseline">This BIP introduces a utility=
-optimized strategy for Bitcoin mempool policy with new transaction signali=
ng mechanisms, including Do-Not-Replace (DNR) and Replace-by-Fee (RBF), to =
enhance control over transaction handling and improve the network&#39;s eco=
nomic efficiency.

</span></p><span dir=3D"ltr" style=3D"line-height:1.38;margin-top:16pt;marg=
in-bottom:4pt"><span style=3D"font-size:14pt;font-family:Arial,sans-serif;c=
olor:rgb(67,67,67);background-color:transparent;font-weight:700;font-varian=
t-numeric:normal;font-variant-east-asian:normal;font-variant-alternates:nor=
mal;vertical-align:baseline">Motivation</span></span><p dir=3D"ltr" style=
=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-=
size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:tr=
ansparent;font-variant-numeric:normal;font-variant-east-asian:normal;font-v=
ariant-alternates:normal;vertical-align:baseline">Enhancing user autonomy a=
nd network efficiency through precise, user-defined transaction signals tha=
t integrate seamlessly with Bitcoin&#39;s decentralized nature and existing=
 economic models.

</span></p><span dir=3D"ltr" style=3D"line-height:1.38;margin-top:16pt;marg=
in-bottom:4pt"><span style=3D"font-size:14pt;font-family:Arial,sans-serif;c=
olor:rgb(67,67,67);background-color:transparent;font-weight:700;font-varian=
t-numeric:normal;font-variant-east-asian:normal;font-variant-alternates:nor=
mal;vertical-align:baseline">Specification
</span></span><span dir=3D"ltr" style=3D"line-height:1.38;margin-top:14pt;m=
argin-bottom:4pt"><span style=3D"font-size:12pt;font-family:Arial,sans-seri=
f;color:rgb(102,102,102);background-color:transparent;font-variant-numeric:=
normal;font-variant-east-asian:normal;font-variant-alternates:normal;vertic=
al-align:baseline">Transaction Signals</span></span><ul style=3D"margin-top=
:0px;margin-bottom:0px"><li dir=3D"ltr" style=3D"list-style-type:disc;font-=
size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:tr=
ansparent;font-variant-numeric:normal;font-variant-east-asian:normal;font-v=
ariant-alternates:normal;vertical-align:baseline;white-space:pre-wrap"><p d=
ir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=
=3D"presentation"><span style=3D"font-size:11pt;background-color:transparen=
t;font-weight:700;font-variant-numeric:normal;font-variant-east-asian:norma=
l;font-variant-alternates:normal;vertical-align:baseline">Do-Not-Replace (D=
NR)</span><span style=3D"font-size:11pt;background-color:transparent;font-v=
ariant-numeric:normal;font-variant-east-asian:normal;font-variant-alternate=
s:normal;vertical-align:baseline">: Ensures transactions are not replaced o=
nce broadcast. This flag is encoded using a specific bit in the transaction=
=E2=80=99s version field, similar to RBF, but with inverse logic.</span></p=
></li><li dir=3D"ltr" style=3D"list-style-type:disc;font-size:11pt;font-fam=
ily:Arial,sans-serif;color:rgb(0,0,0);background-color:transparent;font-var=
iant-numeric:normal;font-variant-east-asian:normal;font-variant-alternates:=
normal;vertical-align:baseline;white-space:pre-wrap"><p dir=3D"ltr" style=
=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"presentation=
"><span style=3D"font-size:11pt;background-color:transparent;font-weight:70=
0;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant-a=
lternates:normal;vertical-align:baseline">Replace-by-Fee (RBF): </span><spa=
n style=3D"font-size:11pt;background-color:transparent;font-variant-numeric=
:normal;font-variant-east-asian:normal;font-variant-alternates:normal;verti=
cal-align:baseline">Allows the sender to signal that the transaction may be=
 replaced by another transaction with a higher fee. This mechanism is used =
to increase the likelihood of a transaction being picked up by miners in co=
nditions of high network congestion, ensuring timely processing.

</span></p></li></ul><span dir=3D"ltr" style=3D"line-height:1.38;margin-top=
:14pt;margin-bottom:4pt"><span style=3D"font-size:12pt;font-family:Arial,sa=
ns-serif;color:rgb(102,102,102);background-color:transparent;font-variant-n=
umeric:normal;font-variant-east-asian:normal;font-variant-alternates:normal=
;vertical-align:baseline">Encoding</span></span><p dir=3D"ltr" style=3D"lin=
e-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:11=
pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transpare=
nt;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant-=
alternates:normal;vertical-align:baseline">The new flag signal, DNR, could =
be encoded similarly to existing RBF flags, with complementary mempool hand=
ling and conflict-resolution logic for default local enforcement.</span></p=
><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt"=
><span style=3D"font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0=
);background-color:transparent;font-variant-numeric:normal;font-variant-eas=
t-asian:normal;font-variant-alternates:normal;vertical-align:baseline"><br>=
</span></p><span dir=3D"ltr" style=3D"line-height:1.38;margin-top:16pt;marg=
in-bottom:4pt"><span style=3D"font-size:14pt;font-family:Arial,sans-serif;c=
olor:rgb(67,67,67);background-color:transparent;font-weight:700;font-varian=
t-numeric:normal;font-variant-east-asian:normal;font-variant-alternates:nor=
mal;vertical-align:baseline">Rationale</span></span><p dir=3D"ltr" style=3D=
"line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-siz=
e:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:trans=
parent;font-variant-numeric:normal;font-variant-east-asian:normal;font-vari=
ant-alternates:normal;vertical-align:baseline">Addresses the need for predi=
ctable transaction handling while respecting the decentralized, incentive-d=
riven nature of network participants.</span></p><br><p dir=3D"ltr" style=3D=
"line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-siz=
e:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:trans=
parent;font-style:italic;font-variant-numeric:normal;font-variant-east-asia=
n:normal;font-variant-alternates:normal;vertical-align:baseline">Note: This=
 proposal only discusses subjective, arbitrary mempool policy and handling.=
 It is assumed that any local policy that enforces preferred hardware limit=
s is out of scope and remains separately necessary.

</span></p><span dir=3D"ltr" style=3D"line-height:1.38;margin-top:14pt;marg=
in-bottom:4pt"><span style=3D"font-size:12pt;font-family:Arial,sans-serif;c=
olor:rgb(102,102,102);background-color:transparent;font-variant-numeric:nor=
mal;font-variant-east-asian:normal;font-variant-alternates:normal;vertical-=
align:baseline">Strategic Options for Mempool Evolution</span></span><p dir=
=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span =
style=3D"font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);backg=
round-color:transparent;font-variant-numeric:normal;font-variant-east-asian=
:normal;font-variant-alternates:normal;vertical-align:baseline">There are t=
hree strategic options for evolving the Bitcoin mempool management, where o=
nly one should be optimized:</span></p><br><ul style=3D"margin-top:0px;marg=
in-bottom:0px"><li dir=3D"ltr" style=3D"list-style-type:none;font-size:11pt=
;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transparent=
;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant-al=
ternates:normal;vertical-align:baseline;white-space:pre-wrap"><p dir=3D"ltr=
" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"prese=
ntation"><span style=3D"font-size:11pt;background-color:transparent;font-we=
ight:700;font-variant-numeric:normal;font-variant-east-asian:normal;font-va=
riant-alternates:normal;vertical-align:baseline">User-defined (The ideal, o=
ptimistic option): </span><span style=3D"font-size:11pt;background-color:tr=
ansparent;font-variant-numeric:normal;font-variant-east-asian:normal;font-v=
ariant-alternates:normal;vertical-align:baseline">This approach involves cr=
eating and default-obeying various transaction flags like RBF and DNR to fa=
cilitate specific goals of transactors. The primary tradeoff is that these =
flags are suggestions and can be overridden by miners, which means they are=
 not enforceable but serve as strong hints to improve transaction predictab=
ility and network efficiency.</span></p></li><li dir=3D"ltr" style=3D"list-=
style-type:none;font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0=
);background-color:transparent;font-variant-numeric:normal;font-variant-eas=
t-asian:normal;font-variant-alternates:normal;vertical-align:baseline;white=
-space:pre-wrap"><br></li><li dir=3D"ltr" style=3D"list-style-type:none;fon=
t-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:=
transparent;font-variant-numeric:normal;font-variant-east-asian:normal;font=
-variant-alternates:normal;vertical-align:baseline;white-space:pre-wrap"><p=
 dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" ro=
le=3D"presentation"><span style=3D"font-size:11pt;background-color:transpar=
ent;font-weight:700;font-variant-numeric:normal;font-variant-east-asian:nor=
mal;font-variant-alternates:normal;vertical-align:baseline">Node-defined (T=
he chaotic, centralizing option): </span><span style=3D"font-size:11pt;back=
ground-color:transparent;font-variant-numeric:normal;font-variant-east-asia=
n:normal;font-variant-alternates:normal;vertical-align:baseline">This strat=
egy would encourage third-party mempool providers to implement their subjec=
tive preferences on transaction facilitation. The significant tradeoff here=
 is the potential fracturing of the mempool and private, mining-pool-centri=
c inclusion requirements, which could lead to increased centralization and =
censorship.</span></p></li><li dir=3D"ltr" style=3D"list-style-type:none;fo=
nt-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color=
:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;fon=
t-variant-alternates:normal;vertical-align:baseline;white-space:pre-wrap"><=
br></li><li dir=3D"ltr" style=3D"list-style-type:none;font-size:11pt;font-f=
amily:Arial,sans-serif;color:rgb(0,0,0);background-color:transparent;font-v=
ariant-numeric:normal;font-variant-east-asian:normal;font-variant-alternate=
s:normal;vertical-align:baseline;white-space:pre-wrap"><p dir=3D"ltr" style=
=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"presentation=
"><span style=3D"font-size:11pt;background-color:transparent;font-weight:70=
0;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant-a=
lternates:normal;vertical-align:baseline">Miner-defined (The rational, pess=
imistic option): </span><span style=3D"font-size:11pt;background-color:tran=
sparent;font-variant-numeric:normal;font-variant-east-asian:normal;font-var=
iant-alternates:normal;vertical-align:baseline">The final strategy involves=
 removing all policies and flags, allowing miners to decide based on transa=
ction fees or other out-of-band terms. This approach simplifies the network=
 at the cost of significantly reducing the utility for users who may need s=
pecial handling for their transactions.

</span></p></li></ul><span dir=3D"ltr" style=3D"line-height:1.38;margin-top=
:14pt;margin-bottom:4pt"><span style=3D"font-size:12pt;font-family:Arial,sa=
ns-serif;color:rgb(102,102,102);background-color:transparent;font-variant-n=
umeric:normal;font-variant-east-asian:normal;font-variant-alternates:normal=
;vertical-align:baseline">Arguments for User-Definition</span></span><p dir=
=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span =
style=3D"font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);backg=
round-color:transparent;font-variant-numeric:normal;font-variant-east-asian=
:normal;font-variant-alternates:normal;vertical-align:baseline">Option 1 is=
 favored here because it provides a balanced approach that enhances user ex=
perience and network functionality without overly complicating the Bitcoin =
protocol or risking centralization. By standardizing flags that indicate us=
er preferences, we can achieve greater harmony and utility within the Bitco=
in network, supporting diverse user needs while maintaining decentralizatio=
n.=C2=A0</span></p><br><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:=
0pt;margin-bottom:0pt"><span style=3D"font-size:11pt;font-family:Arial,sans=
-serif;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:n=
ormal;font-variant-east-asian:normal;font-variant-alternates:normal;vertica=
l-align:baseline">More importantly, we may be able to prevent mempool fragm=
entation and privatization to miners and pools for direct transaction inclu=
sion by intentionally supporting flags that better compete and match transa=
ction use cases within the open mempool network instead of censoring them a=
rbitrarily.</span></p><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0=
pt;margin-bottom:0pt"><span style=3D"font-size:11pt;font-family:Arial,sans-=
serif;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:no=
rmal;font-variant-east-asian:normal;font-variant-alternates:normal;vertical=
-align:baseline"><br></span></p><span dir=3D"ltr" style=3D"line-height:1.38=
;margin-top:14pt;margin-bottom:4pt"><span style=3D"font-size:12pt;font-fami=
ly:Arial,sans-serif;color:rgb(102,102,102);background-color:transparent;fon=
t-variant-numeric:normal;font-variant-east-asian:normal;font-variant-altern=
ates:normal;vertical-align:baseline">Economic Implications</span></span><p =
dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt"><sp=
an style=3D"font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);ba=
ckground-color:transparent;font-variant-numeric:normal;font-variant-east-as=
ian:normal;font-variant-alternates:normal;vertical-align:baseline">The intr=
oduction of these signals could influence transaction fee markets and netwo=
rk congestion patterns:</span></p><ul style=3D"margin-top:0px;margin-bottom=
:0px"><li dir=3D"ltr" style=3D"list-style-type:disc;font-size:11pt;font-fam=
ily:Arial,sans-serif;color:rgb(0,0,0);background-color:transparent;font-var=
iant-numeric:normal;font-variant-east-asian:normal;font-variant-alternates:=
normal;vertical-align:baseline;white-space:pre-wrap"><p dir=3D"ltr" style=
=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"presentation=
"><span style=3D"font-size:11pt;background-color:transparent;font-variant-n=
umeric:normal;font-variant-east-asian:normal;font-variant-alternates:normal=
;vertical-align:baseline">DNR potentially improves next-block fee competiti=
on and improves network throughput by providing clearer signals about trans=
action permanence and relevance.</span></p></li><li dir=3D"ltr" style=3D"li=
st-style-type:disc;font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,=
0,0);background-color:transparent;font-variant-numeric:normal;font-variant-=
east-asian:normal;font-variant-alternates:normal;vertical-align:baseline;wh=
ite-space:pre-wrap"><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt=
;margin-bottom:0pt" role=3D"presentation"><span style=3D"font-size:11pt;bac=
kground-color:transparent;font-variant-numeric:normal;font-variant-east-asi=
an:normal;font-variant-alternates:normal;vertical-align:baseline">RBF allow=
s for dynamic fee adjustments that can enhance the certainty of transaction=
 confirmations during peak times, benefiting users who need timely processi=
ng.

</span></p></li></ul><span dir=3D"ltr" style=3D"line-height:1.38;margin-top=
:16pt;margin-bottom:4pt"><span style=3D"font-size:14pt;font-family:Arial,sa=
ns-serif;color:rgb(67,67,67);background-color:transparent;font-weight:700;f=
ont-variant-numeric:normal;font-variant-east-asian:normal;font-variant-alte=
rnates:normal;vertical-align:baseline">Do-Not-Replace (DNR) Use Cases</span=
></span><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bott=
om:0pt"><span style=3D"font-size:11pt;font-family:Arial,sans-serif;color:rg=
b(0,0,0);background-color:transparent;font-variant-numeric:normal;font-vari=
ant-east-asian:normal;font-variant-alternates:normal;vertical-align:baselin=
e">DNR is valuable in scenarios where transaction finality is crucial upon =
submission, without the risk of later alterations due to increased fees. He=
re are some specific use cases:

</span></p><ul style=3D"margin-top:0px;margin-bottom:0px"><li dir=3D"ltr" s=
tyle=3D"list-style-type:disc;font-size:11pt;font-family:Arial,sans-serif;co=
lor:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;fon=
t-variant-east-asian:normal;font-variant-alternates:normal;vertical-align:b=
aseline;white-space:pre-wrap"><p dir=3D"ltr" style=3D"line-height:1.38;marg=
in-top:0pt;margin-bottom:0pt" role=3D"presentation"><span style=3D"font-siz=
e:11pt;background-color:transparent;font-variant-numeric:normal;font-varian=
t-east-asian:normal;font-variant-alternates:normal;vertical-align:baseline"=
>Point-of-Sale Transactions:</span></p><ul style=3D"margin-top:0px;margin-b=
ottom:0px"><li dir=3D"ltr" style=3D"list-style-type:disc;font-size:11pt;fon=
t-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transparent;fon=
t-variant-numeric:normal;font-variant-east-asian:normal;font-variant-altern=
ates:normal;vertical-align:baseline;white-space:pre-wrap"><p dir=3D"ltr" st=
yle=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"presentat=
ion"><span style=3D"font-size:11pt;background-color:transparent;font-varian=
t-numeric:normal;font-variant-east-asian:normal;font-variant-alternates:nor=
mal;vertical-align:baseline">Example: Retailers or service providers accept=
ing Bitcoin in a face-to-face setting need transactions to be final immedia=
tely to prevent fraud.</span></p></li><li dir=3D"ltr" style=3D"list-style-t=
ype:disc;font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);backg=
round-color:transparent;font-variant-numeric:normal;font-variant-east-asian=
:normal;font-variant-alternates:normal;vertical-align:baseline;white-space:=
pre-wrap"><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bo=
ttom:0pt" role=3D"presentation"><span style=3D"font-size:11pt;background-co=
lor:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;=
font-variant-alternates:normal;vertical-align:baseline">Usage: By using the=
 DNR flag, merchants can ensure that once a transaction is broadcast, it ca=
nnot be replaced, thereby securing the payment process at the point of sale=
.</span></p></li></ul></li><li dir=3D"ltr" style=3D"list-style-type:disc;fo=
nt-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color=
:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;fon=
t-variant-alternates:normal;vertical-align:baseline;white-space:pre-wrap"><=
p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" r=
ole=3D"presentation"><span style=3D"font-size:11pt;background-color:transpa=
rent;font-variant-numeric:normal;font-variant-east-asian:normal;font-varian=
t-alternates:normal;vertical-align:baseline">Wage Payments:</span></p><ul s=
tyle=3D"margin-top:0px;margin-bottom:0px"><li dir=3D"ltr" style=3D"list-sty=
le-type:disc;font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);b=
ackground-color:transparent;font-variant-numeric:normal;font-variant-east-a=
sian:normal;font-variant-alternates:normal;vertical-align:baseline;white-sp=
ace:pre-wrap"><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margi=
n-bottom:0pt" role=3D"presentation"><span style=3D"font-size:11pt;backgroun=
d-color:transparent;font-variant-numeric:normal;font-variant-east-asian:nor=
mal;font-variant-alternates:normal;vertical-align:baseline">Example: Employ=
ers paying salaries in Bitcoin require certainty that the transaction amoun=
ts cannot be altered once sent.</span></p></li><li dir=3D"ltr" style=3D"lis=
t-style-type:disc;font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0=
,0);background-color:transparent;font-variant-numeric:normal;font-variant-e=
ast-asian:normal;font-variant-alternates:normal;vertical-align:baseline;whi=
te-space:pre-wrap"><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;=
margin-bottom:0pt" role=3D"presentation"><span style=3D"font-size:11pt;back=
ground-color:transparent;font-variant-numeric:normal;font-variant-east-asia=
n:normal;font-variant-alternates:normal;vertical-align:baseline">Usage: DNR=
 provides employers the confidence to execute payroll transactions knowing =
that the payments cannot be replaced or canceled, ensuring employees receiv=
e the exact intended amounts.</span></p></li></ul></li><li dir=3D"ltr" styl=
e=3D"list-style-type:disc;font-size:11pt;font-family:Arial,sans-serif;color=
:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;font-v=
ariant-east-asian:normal;font-variant-alternates:normal;vertical-align:base=
line;white-space:pre-wrap"><p dir=3D"ltr" style=3D"line-height:1.38;margin-=
top:0pt;margin-bottom:0pt" role=3D"presentation"><span style=3D"font-size:1=
1pt;background-color:transparent;font-variant-numeric:normal;font-variant-e=
ast-asian:normal;font-variant-alternates:normal;vertical-align:baseline">Au=
tomated Payments for Services:</span></p><ul style=3D"margin-top:0px;margin=
-bottom:0px"><li dir=3D"ltr" style=3D"list-style-type:disc;font-size:11pt;f=
ont-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transparent;f=
ont-variant-numeric:normal;font-variant-east-asian:normal;font-variant-alte=
rnates:normal;vertical-align:baseline;white-space:pre-wrap"><p dir=3D"ltr" =
style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"present=
ation"><span style=3D"font-size:11pt;background-color:transparent;font-vari=
ant-numeric:normal;font-variant-east-asian:normal;font-variant-alternates:n=
ormal;vertical-align:baseline">Example: Subscription services where automat=
ed payments are scheduled and should not be subject to change once initiate=
d.</span></p></li><li dir=3D"ltr" style=3D"list-style-type:disc;font-size:1=
1pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transpar=
ent;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant=
-alternates:normal;vertical-align:baseline;white-space:pre-wrap"><p dir=3D"=
ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"pr=
esentation"><span style=3D"font-size:11pt;background-color:transparent;font=
-variant-numeric:normal;font-variant-east-asian:normal;font-variant-alterna=
tes:normal;vertical-align:baseline">Usage: DNR can be applied to ensure tha=
t automated recurring payments are processed without the risk of being repl=
aced, thus simplifying financial planning and contract enforcement.

</span></p></li></ul></li></ul><span dir=3D"ltr" style=3D"line-height:1.38;=
margin-top:16pt;margin-bottom:4pt"><span style=3D"font-size:14pt;font-famil=
y:Arial,sans-serif;color:rgb(67,67,67);background-color:transparent;font-we=
ight:700;font-variant-numeric:normal;font-variant-east-asian:normal;font-va=
riant-alternates:normal;vertical-align:baseline">Replace-by-Fee (RBF) Use C=
ases</span></span><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;m=
argin-bottom:0pt"><span style=3D"font-size:11pt;font-family:Arial,sans-seri=
f;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal=
;font-variant-east-asian:normal;font-variant-alternates:normal;vertical-ali=
gn:baseline">RBF is essential for transactions where timing and confirmatio=
n speed are more critical than the immediacy of finality. Here are applicab=
le scenarios:</span></p><ul style=3D"margin-top:0px;margin-bottom:0px"><li =
dir=3D"ltr" style=3D"list-style-type:disc;font-size:11pt;font-family:Arial,=
sans-serif;color:rgb(0,0,0);background-color:transparent;font-variant-numer=
ic:normal;font-variant-east-asian:normal;font-variant-alternates:normal;ver=
tical-align:baseline;white-space:pre-wrap"><p dir=3D"ltr" style=3D"line-hei=
ght:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"presentation"><span styl=
e=3D"font-size:11pt;background-color:transparent;font-variant-numeric:norma=
l;font-variant-east-asian:normal;font-variant-alternates:normal;vertical-al=
ign:baseline">High-Frequency Trading:</span></p><ul style=3D"margin-top:0px=
;margin-bottom:0px"><li dir=3D"ltr" style=3D"list-style-type:disc;font-size=
:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transp=
arent;font-variant-numeric:normal;font-variant-east-asian:normal;font-varia=
nt-alternates:normal;vertical-align:baseline;white-space:pre-wrap"><p dir=
=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=
=3D"presentation"><span style=3D"font-size:11pt;background-color:transparen=
t;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant-a=
lternates:normal;vertical-align:baseline">Example: Traders on cryptocurrenc=
y exchanges who need to rapidly adjust their positions based on market cond=
itions.</span></p></li><li dir=3D"ltr" style=3D"list-style-type:disc;font-s=
ize:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:tra=
nsparent;font-variant-numeric:normal;font-variant-east-asian:normal;font-va=
riant-alternates:normal;vertical-align:baseline;white-space:pre-wrap"><p di=
r=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=
=3D"presentation"><span style=3D"font-size:11pt;background-color:transparen=
t;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant-a=
lternates:normal;vertical-align:baseline">Usage: RBF allows traders to incr=
ease the fee on a transaction if it&#39;s not getting confirmed quickly eno=
ugh, enabling them to ensure timely executions in response to market moveme=
nts.</span></p></li></ul></li><li dir=3D"ltr" style=3D"list-style-type:disc=
;font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-co=
lor:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;=
font-variant-alternates:normal;vertical-align:baseline;white-space:pre-wrap=
"><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt=
" role=3D"presentation"><span style=3D"font-size:11pt;background-color:tran=
sparent;font-variant-numeric:normal;font-variant-east-asian:normal;font-var=
iant-alternates:normal;vertical-align:baseline">Emergency Service Payments:=
</span></p><ul style=3D"margin-top:0px;margin-bottom:0px"><li dir=3D"ltr" s=
tyle=3D"list-style-type:disc;font-size:11pt;font-family:Arial,sans-serif;co=
lor:rgb(0,0,0);background-color:transparent;font-variant-numeric:normal;fon=
t-variant-east-asian:normal;font-variant-alternates:normal;vertical-align:b=
aseline;white-space:pre-wrap"><p dir=3D"ltr" style=3D"line-height:1.38;marg=
in-top:0pt;margin-bottom:0pt" role=3D"presentation"><span style=3D"font-siz=
e:11pt;background-color:transparent;font-variant-numeric:normal;font-varian=
t-east-asian:normal;font-variant-alternates:normal;vertical-align:baseline"=
>Example: Payments for time-sensitive services, such as premium fast delive=
ry or emergency technical services.</span></p></li><li dir=3D"ltr" style=3D=
"list-style-type:disc;font-size:11pt;font-family:Arial,sans-serif;color:rgb=
(0,0,0);background-color:transparent;font-variant-numeric:normal;font-varia=
nt-east-asian:normal;font-variant-alternates:normal;vertical-align:baseline=
;white-space:pre-wrap"><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:=
0pt;margin-bottom:0pt" role=3D"presentation"><span style=3D"font-size:11pt;=
background-color:transparent;font-variant-numeric:normal;font-variant-east-=
asian:normal;font-variant-alternates:normal;vertical-align:baseline">Usage:=
 When quick service delivery is critical, RBF enables the sender to increas=
e the transaction fee to speed up the confirmation process, ensuring that t=
he transaction is prioritized by miners.</span></p></li></ul></li><li dir=
=3D"ltr" style=3D"list-style-type:disc;font-size:11pt;font-family:Arial,san=
s-serif;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:=
normal;font-variant-east-asian:normal;font-variant-alternates:normal;vertic=
al-align:baseline;white-space:pre-wrap"><p dir=3D"ltr" style=3D"line-height=
:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"presentation"><span style=
=3D"font-size:11pt;background-color:transparent;font-variant-numeric:normal=
;font-variant-east-asian:normal;font-variant-alternates:normal;vertical-ali=
gn:baseline">Bidding in Auctions:</span></p><ul style=3D"margin-top:0px;mar=
gin-bottom:0px"><li dir=3D"ltr" style=3D"list-style-type:disc;font-size:11p=
t;font-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transparen=
t;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant-a=
lternates:normal;vertical-align:baseline;white-space:pre-wrap"><p dir=3D"lt=
r" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"pres=
entation"><span style=3D"font-size:11pt;background-color:transparent;font-v=
ariant-numeric:normal;font-variant-east-asian:normal;font-variant-alternate=
s:normal;vertical-align:baseline">Example: Participants in online auctions =
who need to ensure their payments go through before the auction closes.</sp=
an></p></li><li dir=3D"ltr" style=3D"list-style-type:disc;font-size:11pt;fo=
nt-family:Arial,sans-serif;color:rgb(0,0,0);background-color:transparent;fo=
nt-variant-numeric:normal;font-variant-east-asian:normal;font-variant-alter=
nates:normal;vertical-align:baseline;white-space:pre-wrap"><p dir=3D"ltr" s=
tyle=3D"line-height:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"presenta=
tion"><span style=3D"font-size:11pt;background-color:transparent;font-varia=
nt-numeric:normal;font-variant-east-asian:normal;font-variant-alternates:no=
rmal;vertical-align:baseline">Usage: Auction participants can use RBF to ad=
just their transaction fees to outpace other transactions in times of netwo=
rk congestion, securing their winning bids.</span></p></li></ul></li><li di=
r=3D"ltr" style=3D"list-style-type:disc;font-size:11pt;font-family:Arial,sa=
ns-serif;color:rgb(0,0,0);background-color:transparent;font-variant-numeric=
:normal;font-variant-east-asian:normal;font-variant-alternates:normal;verti=
cal-align:baseline;white-space:pre-wrap"><p dir=3D"ltr" style=3D"line-heigh=
t:1.38;margin-top:0pt;margin-bottom:0pt" role=3D"presentation"><span style=
=3D"font-size:11pt;background-color:transparent;font-variant-numeric:normal=
;font-variant-east-asian:normal;font-variant-alternates:normal;vertical-ali=
gn:baseline">Dynamic Fee Management for Wallets:</span></p><ul style=3D"mar=
gin-top:0px;margin-bottom:0px"><li dir=3D"ltr" style=3D"list-style-type:dis=
c;font-size:11pt;font-family:Arial,sans-serif;color:rgb(0,0,0);background-c=
olor:transparent;font-variant-numeric:normal;font-variant-east-asian:normal=
;font-variant-alternates:normal;vertical-align:baseline;white-space:pre-wra=
p"><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0pt;margin-bottom:0p=
t" role=3D"presentation"><span style=3D"font-size:11pt;background-color:tra=
nsparent;font-variant-numeric:normal;font-variant-east-asian:normal;font-va=
riant-alternates:normal;vertical-align:baseline">Example: Users sending non=
-urgent transactions who want to minimize fees but are willing to increase =
them if network conditions change.</span></p></li><li dir=3D"ltr" style=3D"=
list-style-type:disc;font-size:11pt;font-family:Arial,sans-serif;color:rgb(=
0,0,0);background-color:transparent;font-variant-numeric:normal;font-varian=
t-east-asian:normal;font-variant-alternates:normal;vertical-align:baseline;=
white-space:pre-wrap"><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:0=
pt;margin-bottom:0pt" role=3D"presentation"><span style=3D"font-size:11pt;b=
ackground-color:transparent;font-variant-numeric:normal;font-variant-east-a=
sian:normal;font-variant-alternates:normal;vertical-align:baseline">Usage: =
RBF provides flexibility, allowing users to start with a lower fee and only=
 increase it if the transaction confirmation is delayed, optimizing their t=
ransaction fee expenditures.

</span></p></li></ul></li></ul><span dir=3D"ltr" style=3D"line-height:1.38;=
margin-top:16pt;margin-bottom:4pt"><span style=3D"font-size:14pt;font-famil=
y:Arial,sans-serif;color:rgb(67,67,67);background-color:transparent;font-va=
riant-numeric:normal;font-variant-east-asian:normal;font-variant-alternates=
:normal;vertical-align:baseline">Adoption and Transition Strategy &amp; Req=
uirements</span></span><p dir=3D"ltr" style=3D"line-height:1.38;margin-top:=
0pt;margin-bottom:0pt"><span style=3D"font-size:11pt;font-family:Arial,sans=
-serif;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:n=
ormal;font-variant-east-asian:normal;font-variant-alternates:normal;text-de=
coration-line:underline;vertical-align:baseline">It is implicit, until now,=
 that within this strategy is a requirement for Core and other implementati=
ons to abandon strategies within Option 2, by specifically removing and rej=
ecting policy tools like </span><span style=3D"font-size:11pt;font-family:A=
rial,sans-serif;color:rgb(0,0,0);background-color:transparent;font-weight:7=
00;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant-=
alternates:normal;text-decoration-line:underline;vertical-align:baseline">m=
empoolfullrbf</span><span style=3D"font-size:11pt;font-family:Arial,sans-se=
rif;color:rgb(0,0,0);background-color:transparent;font-variant-numeric:norm=
al;font-variant-east-asian:normal;font-variant-alternates:normal;text-decor=
ation-line:underline;vertical-align:baseline">, or other attempts to overru=
le, filter, or otherwise filter and hamper the propagation of valid, non-de=
structive transactions.</span></p><br><p dir=3D"ltr" style=3D"line-height:1=
.38;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:11pt;font-fa=
mily:Arial,sans-serif;color:rgb(0,0,0);background-color:transparent;font-va=
riant-numeric:normal;font-variant-east-asian:normal;font-variant-alternates=
:normal;vertical-align:baseline">This proposal is presented to the communit=
y for feedback, focusing on gathering input from wallet developers, miners,=
 and node operators to ensure broad support and understanding of the benefi=
ts and implications of these new transaction signals.</span></p><br></div>

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