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Date: Sun, 14 Apr 2024 08:09:51 -0700 (PDT)
From: Bitcoin Error Log <bitcoinerrorlog@gmail.com>
To: Bitcoin Development Mailing List <bitcoindev@googlegroups.com>
Message-Id: <cc812488-9da0-4595-be3b-bcfd7ab41106n@googlegroups.com>
Subject: [bitcoindev] Draft BIP for User-Defined Transaction Flags Policy & Strategy
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*Posted here:*=20
https://github.com/BitcoinAndLightningLayerSpecs/balls/blob/main/balls-0013=
8.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=20
Abstract

This BIP introduces a utility-optimized strategy for Bitcoin mempool policy=
=20
with new transaction signaling mechanisms, including Do-Not-Replace (DNR)=
=20
and Replace-by-Fee (RBF), to enhance control over transaction handling and=
=20
improve the network's economic efficiency.=20
Motivation

Enhancing user autonomy and network efficiency through precise,=20
user-defined transaction signals that integrate seamlessly with Bitcoin's=
=20
decentralized nature and existing economic models.=20
Specification Transaction Signals
  =20
   -=20
  =20
   Do-Not-Replace (DNR): Ensures transactions are not replaced once=20
   broadcast. This flag is encoded using a specific bit in the transaction=
=E2=80=99s=20
   version field, similar to RBF, but with inverse logic.
   -=20
  =20
   Replace-by-Fee (RBF): Allows the sender to signal that the transaction=
=20
   may be replaced by another transaction with a higher fee. This mechanism=
 is=20
   used to increase the likelihood of a transaction being picked up by mine=
rs=20
   in conditions of high network congestion, ensuring timely processing.=20
  =20
Encoding

The new flag signal, DNR, could be encoded similarly to existing RBF flags,=
=20
with complementary mempool handling and conflict-resolution logic for=20
default local enforcement.


Rationale

Addresses the need for predictable transaction handling while respecting=20
the decentralized, incentive-driven nature of network participants.

Note: This proposal only discusses subjective, arbitrary mempool policy and=
=20
handling. It is assumed that any local policy that enforces preferred=20
hardware limits is out of scope and remains separately necessary.=20
Strategic Options for Mempool Evolution

There are three strategic options for evolving the Bitcoin mempool=20
management, where only one should be optimized:


   -=20
  =20
   User-defined (The ideal, optimistic option): This approach involves=20
   creating and default-obeying various transaction flags like RBF and DNR =
to=20
   facilitate specific goals of transactors. The primary tradeoff is that=
=20
   these flags are suggestions and can be overridden by miners, which means=
=20
   they are not enforceable but serve as strong hints to improve transactio=
n=20
   predictability and network efficiency.
   -=20
   -=20
  =20
   Node-defined (The chaotic, centralizing option): This strategy would=20
   encourage third-party mempool providers to implement their subjective=20
   preferences on transaction facilitation. The significant tradeoff here i=
s=20
   the potential fracturing of the mempool and private, mining-pool-centric=
=20
   inclusion requirements, which could lead to increased centralization and=
=20
   censorship.
   -=20
   -=20
  =20
   Miner-defined (The rational, pessimistic option): The final strategy=20
   involves removing all policies and flags, allowing miners to decide base=
d=20
   on transaction fees or other out-of-band terms. This approach simplifies=
=20
   the network at the cost of significantly reducing the utility for users =
who=20
   may need special handling for their transactions.=20
  =20
Arguments for User-Definition

Option 1 is favored here because it provides a balanced approach that=20
enhances user experience and network functionality without overly=20
complicating the Bitcoin protocol or risking centralization. By=20
standardizing flags that indicate user preferences, we can achieve greater=
=20
harmony and utility within the Bitcoin network, supporting diverse user=20
needs while maintaining decentralization.=20

More importantly, we may be able to prevent mempool fragmentation and=20
privatization to miners and pools for direct transaction inclusion by=20
intentionally supporting flags that better compete and match transaction=20
use cases within the open mempool network instead of censoring them=20
arbitrarily.


Economic Implications

The introduction of these signals could influence transaction fee markets=
=20
and network congestion patterns:

   -=20
  =20
   DNR potentially improves next-block fee competition and improves network=
=20
   throughput by providing clearer signals about transaction permanence and=
=20
   relevance.
   -=20
  =20
   RBF allows for dynamic fee adjustments that can enhance the certainty of=
=20
   transaction confirmations during peak times, benefiting users who need=
=20
   timely processing.=20
  =20
Do-Not-Replace (DNR) Use Cases

DNR is valuable in scenarios where transaction finality is crucial upon=20
submission, without the risk of later alterations due to increased fees.=20
Here are some specific use cases:=20

   -=20
  =20
   Point-of-Sale Transactions:
   -=20
     =20
      Example: Retailers or service providers accepting Bitcoin in a=20
      face-to-face setting need transactions to be final immediately to pre=
vent=20
      fraud.
      -=20
     =20
      Usage: By using the DNR flag, merchants can ensure that once a=20
      transaction is broadcast, it cannot be replaced, thereby securing the=
=20
      payment process at the point of sale.
      -=20
  =20
   Wage Payments:
   -=20
     =20
      Example: Employers paying salaries in Bitcoin require certainty that=
=20
      the transaction amounts cannot be altered once sent.
      -=20
     =20
      Usage: DNR provides employers the confidence to execute payroll=20
      transactions knowing that the payments cannot be replaced or canceled=
,=20
      ensuring employees receive the exact intended amounts.
      -=20
  =20
   Automated Payments for Services:
   -=20
     =20
      Example: Subscription services where automated payments are scheduled=
=20
      and should not be subject to change once initiated.
      -=20
     =20
      Usage: DNR can be applied to ensure that automated recurring payments=
=20
      are processed without the risk of being replaced, thus simplifying=20
      financial planning and contract enforcement.=20
     =20
Replace-by-Fee (RBF) Use Cases

RBF is essential for transactions where timing and confirmation speed are=
=20
more critical than the immediacy of finality. Here are applicable scenarios=
:

   -=20
  =20
   High-Frequency Trading:
   -=20
     =20
      Example: Traders on cryptocurrency exchanges who need to rapidly=20
      adjust their positions based on market conditions.
      -=20
     =20
      Usage: RBF allows traders to increase the fee on a transaction if=20
      it's not getting confirmed quickly enough, enabling them to ensure ti=
mely=20
      executions in response to market movements.
      -=20
  =20
   Emergency Service Payments:
   -=20
     =20
      Example: Payments for time-sensitive services, such as premium fast=
=20
      delivery or emergency technical services.
      -=20
     =20
      Usage: When quick service delivery is critical, RBF enables the=20
      sender to increase the transaction fee to speed up the confirmation=
=20
      process, ensuring that the transaction is prioritized by miners.
      -=20
  =20
   Bidding in Auctions:
   -=20
     =20
      Example: Participants in online auctions who need to ensure their=20
      payments go through before the auction closes.
      -=20
     =20
      Usage: Auction participants can use RBF to adjust their transaction=
=20
      fees to outpace other transactions in times of network congestion, se=
curing=20
      their winning bids.
      -=20
  =20
   Dynamic Fee Management for Wallets:
   -=20
     =20
      Example: Users sending non-urgent transactions who want to minimize=
=20
      fees but are willing to increase them if network conditions change.
      -=20
     =20
      Usage: RBF provides flexibility, allowing users to start with a lower=
=20
      fee and only increase it if the transaction confirmation is delayed,=
=20
      optimizing their transaction fee expenditures.=20
     =20
Adoption and Transition Strategy & Requirements

It is implicit, until now, that within this strategy is a requirement for=
=20
Core and other implementations to abandon strategies within Option 2, by=20
specifically removing and rejecting policy tools like mempoolfullrbf, or=20
other attempts to overrule, filter, or otherwise filter and hamper the=20
propagation of valid, non-destructive transactions.

This proposal is presented to the community for feedback, focusing on=20
gathering input from wallet developers, miners, and node operators to=20
ensure broad support and understanding of the benefits and implications of=
=20
these new transaction signals.

--=20
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To unsubscribe from this group and stop receiving emails from it, send an e=
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<b>Posted here:</b> <a href=3D"https://github.com/BitcoinAndLightningLayerS=
pecs/balls/blob/main/balls-00138.md">https://github.com/BitcoinAndLightning=
LayerSpecs/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"lin=
e-height: 1.38; margin-top: 0pt; margin-bottom: 0pt;"><span style=3D"font-s=
ize: 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; font-variant-position: normal; ver=
tical-align: baseline; white-space-collapse: preserve;">BIP: XXXX</span><sp=
an style=3D"font-size: 11pt; font-family: Arial, sans-serif; color: rgb(0, =
0, 0); background-color: transparent; font-variant-numeric: normal; font-va=
riant-east-asian: normal; font-variant-alternates: normal; font-variant-pos=
ition: normal; vertical-align: baseline; white-space-collapse: preserve;"><=
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: normal; font-variant-alternates: normal; f=
ont-variant-position: normal; vertical-align: baseline; white-space-collaps=
e: preserve;">Title: User-Defined Transaction Flags Policy &amp; Strategy</=
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-alternates: normal; font-var=
iant-position: normal; vertical-align: baseline; white-space-collapse: pres=
erve;"><br /></span><span style=3D"font-size: 11pt; font-family: Arial, san=
s-serif; color: rgb(0, 0, 0); background-color: transparent; font-variant-n=
umeric: normal; font-variant-east-asian: normal; font-variant-alternates: n=
ormal; font-variant-position: normal; vertical-align: baseline; white-space=
-collapse: preserve;">Author: John Carvalho</span><span style=3D"font-size:=
 11pt; font-family: Arial, sans-serif; color: rgb(0, 0, 0); background-colo=
r: transparent; font-variant-numeric: normal; font-variant-east-asian: norm=
al; font-variant-alternates: normal; font-variant-position: normal; vertica=
l-align: baseline; white-space-collapse: preserve;"><br /></span><span styl=
e=3D"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; font-variant-position: =
normal; vertical-align: baseline; white-space-collapse: preserve;">Type: St=
andards Track</span><span style=3D"font-size: 11pt; font-family: Arial, san=
s-serif; color: rgb(0, 0, 0); background-color: transparent; font-variant-n=
umeric: normal; font-variant-east-asian: normal; font-variant-alternates: n=
ormal; font-variant-position: normal; vertical-align: baseline; white-space=
-collapse: preserve;"><br /></span><span style=3D"font-size: 11pt; font-fam=
ily: Arial, sans-serif; color: rgb(0, 0, 0); background-color: transparent;=
 font-variant-numeric: normal; font-variant-east-asian: normal; font-varian=
t-alternates: normal; font-variant-position: normal; vertical-align: baseli=
ne; white-space-collapse: preserve;">Created: Apr 15, 2024</span><span styl=
e=3D"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; font-variant-position: =
normal; vertical-align: baseline; white-space-collapse: preserve;"><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: normal; font-variant-alternates: normal; font-var=
iant-position: normal; vertical-align: baseline; white-space-collapse: pres=
erve;">Status: Draft

</span></p><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-weigh=
t: 700; font-variant-numeric: normal; font-variant-east-asian: normal; font=
-variant-alternates: normal; font-variant-position: normal; vertical-align:=
 baseline; white-space-collapse: preserve;">Abstract</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); background-color: transparent; font-variant-numeric: normal; font-va=
riant-east-asian: normal; font-variant-alternates: normal; font-variant-pos=
ition: normal; vertical-align: baseline; white-space-collapse: preserve;">T=
his BIP introduces a utility-optimized strategy for Bitcoin mempool policy =
with new transaction signaling mechanisms, including Do-Not-Replace (DNR) a=
nd Replace-by-Fee (RBF), to enhance control over transaction handling and i=
mprove the network's economic efficiency.

</span></p><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-weigh=
t: 700; font-variant-numeric: normal; font-variant-east-asian: normal; font=
-variant-alternates: normal; font-variant-position: normal; vertical-align:=
 baseline; white-space-collapse: preserve;">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: transparent; font-variant-numeric: normal; font=
-variant-east-asian: normal; font-variant-alternates: normal; font-variant-=
position: normal; vertical-align: baseline; white-space-collapse: preserve;=
">Enhancing user autonomy and network efficiency through precise, user-defi=
ned transaction signals that integrate seamlessly with Bitcoin's decentrali=
zed nature and existing economic models.

</span></p><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-weigh=
t: 700; font-variant-numeric: normal; font-variant-east-asian: normal; font=
-variant-alternates: normal; font-variant-position: normal; vertical-align:=
 baseline; white-space-collapse: preserve;">Specification
</span></span><span dir=3D"ltr" style=3D"line-height: 1.38; margin-top: 14p=
t; margin-bottom: 4pt;"><span style=3D"font-size: 12pt; font-family: Arial,=
 sans-serif; color: rgb(102, 102, 102); background-color: transparent; font=
-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alt=
ernates: normal; font-variant-position: normal; vertical-align: baseline; w=
hite-space-collapse: preserve;">Transaction Signals</span></span><ul style=
=3D"margin-top: 0px; margin-bottom: 0px; padding-inline-start: 48px;"><li d=
ir=3D"ltr" style=3D"list-style-type: disc; font-size: 11pt; font-family: Ar=
ial, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-v=
ariant-numeric: normal; font-variant-east-asian: normal; font-variant-alter=
nates: normal; font-variant-position: normal; vertical-align: baseline; whi=
te-space: pre;"><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: 700; font-variant-numeric: nor=
mal; font-variant-east-asian: normal; font-variant-alternates: normal; font=
-variant-position: normal; vertical-align: baseline; text-wrap: wrap;">Do-N=
ot-Replace (DNR)</span><span style=3D"font-size: 11pt; background-color: tr=
ansparent; font-variant-numeric: normal; font-variant-east-asian: normal; f=
ont-variant-alternates: normal; font-variant-position: normal; vertical-ali=
gn: baseline; text-wrap: wrap;">: Ensures transactions are not replaced onc=
e 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=
-family: Arial, sans-serif; color: rgb(0, 0, 0); background-color: transpar=
ent; font-variant-numeric: normal; font-variant-east-asian: normal; font-va=
riant-alternates: normal; font-variant-position: normal; vertical-align: ba=
seline; white-space: pre;"><p dir=3D"ltr" style=3D"line-height: 1.38; margi=
n-top: 0pt; margin-bottom: 0pt;" role=3D"presentation"><span style=3D"font-=
size: 11pt; background-color: transparent; font-weight: 700; font-variant-n=
umeric: normal; font-variant-east-asian: normal; font-variant-alternates: n=
ormal; font-variant-position: normal; vertical-align: baseline; text-wrap: =
wrap;">Replace-by-Fee (RBF): </span><span style=3D"font-size: 11pt; backgro=
und-color: transparent; font-variant-numeric: normal; font-variant-east-asi=
an: normal; font-variant-alternates: normal; font-variant-position: normal;=
 vertical-align: baseline; text-wrap: wrap;">Allows the sender to signal th=
at 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 conditions of high network congestion, ensuring time=
ly processing.

</span></p></li></ul><span dir=3D"ltr" style=3D"line-height: 1.38; margin-t=
op: 14pt; margin-bottom: 4pt;"><span style=3D"font-size: 12pt; font-family:=
 Arial, sans-serif; color: rgb(102, 102, 102); background-color: transparen=
t; font-variant-numeric: normal; font-variant-east-asian: normal; font-vari=
ant-alternates: normal; font-variant-position: normal; vertical-align: base=
line; white-space-collapse: preserve;">Encoding</span></span><p dir=3D"ltr"=
 style=3D"line-height: 1.38; margin-top: 0pt; margin-bottom: 0pt;"><span st=
yle=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-alternates: normal; font-variant-position=
: normal; vertical-align: baseline; white-space-collapse: preserve;">The ne=
w flag signal, DNR, could be encoded similarly to existing RBF flags, with =
complementary mempool handling and conflict-resolution logic for default lo=
cal enforcement.</span></p><p dir=3D"ltr" style=3D"line-height: 1.38; margi=
n-top: 0pt; margin-bottom: 0pt;"><span style=3D"font-size: 11pt; font-famil=
y: Arial, sans-serif; color: rgb(0, 0, 0); background-color: transparent; f=
ont-variant-numeric: normal; font-variant-east-asian: normal; font-variant-=
alternates: normal; font-variant-position: normal; vertical-align: baseline=
; white-space-collapse: preserve;"><br /></span></p><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, sans-serif; color: rgb(67, 67, 67)=
; background-color: transparent; font-weight: 700; font-variant-numeric: no=
rmal; font-variant-east-asian: normal; font-variant-alternates: normal; fon=
t-variant-position: normal; vertical-align: baseline; white-space-collapse:=
 preserve;">Rationale</span></span><p dir=3D"ltr" style=3D"line-height: 1.3=
8; margin-top: 0pt; margin-bottom: 0pt;"><span style=3D"font-size: 11pt; fo=
nt-family: Arial, sans-serif; color: rgb(0, 0, 0); background-color: transp=
arent; font-variant-numeric: normal; font-variant-east-asian: normal; font-=
variant-alternates: normal; font-variant-position: normal; vertical-align: =
baseline; white-space-collapse: preserve;">Addresses the need for predictab=
le transaction handling while respecting the decentralized, incentive-drive=
n nature of network participants.</span></p><br /><p dir=3D"ltr" style=3D"l=
ine-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); backgroun=
d-color: transparent; font-style: italic; font-variant-numeric: normal; fon=
t-variant-east-asian: normal; font-variant-alternates: normal; font-variant=
-position: normal; vertical-align: baseline; white-space-collapse: preserve=
;">Note: This proposal only discusses subjective, arbitrary mempool policy =
and handling. It is assumed that any local policy that enforces preferred h=
ardware limits is out of scope and remains separately necessary.

</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-family: Arial, sa=
ns-serif; color: rgb(102, 102, 102); background-color: transparent; font-va=
riant-numeric: normal; font-variant-east-asian: normal; font-variant-altern=
ates: normal; font-variant-position: normal; vertical-align: baseline; whit=
e-space-collapse: preserve;">Strategic Options for Mempool Evolution</span>=
</span><p dir=3D"ltr" style=3D"line-height: 1.38; margin-top: 0pt; margin-b=
ottom: 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-east-asian: normal; font-variant-alternates: normal; =
font-variant-position: normal; vertical-align: baseline; white-space-collap=
se: preserve;">There are three strategic options for evolving the Bitcoin m=
empool management, where only one should be optimized:</span></p><br /><ul =
style=3D"margin-top: 0px; margin-bottom: 0px; padding-inline-start: 48px;">=
<li dir=3D"ltr" style=3D"list-style-type: none; font-size: 11pt; font-famil=
y: Arial, sans-serif; color: rgb(0, 0, 0); background-color: transparent; f=
ont-variant-numeric: normal; font-variant-east-asian: normal; font-variant-=
alternates: normal; font-variant-position: normal; vertical-align: baseline=
; white-space: pre;"><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: 700; font-variant-numeric=
: normal; font-variant-east-asian: normal; font-variant-alternates: normal;=
 font-variant-position: normal; vertical-align: baseline; text-wrap: wrap;"=
>User-defined (The ideal, optimistic option): </span><span style=3D"font-si=
ze: 11pt; background-color: transparent; font-variant-numeric: normal; font=
-variant-east-asian: normal; font-variant-alternates: normal; font-variant-=
position: normal; vertical-align: baseline; text-wrap: wrap;">This approach=
 involves creating and default-obeying various transaction flags like RBF a=
nd DNR to facilitate specific goals of transactors. The primary tradeoff is=
 that these flags are suggestions and can be overridden by miners, which me=
ans they are not enforceable but serve as strong hints to improve transacti=
on predictability and network efficiency.</span></p></li><li dir=3D"ltr" st=
yle=3D"list-style-type: none; font-size: 11pt; font-family: Arial, sans-ser=
if; color: rgb(0, 0, 0); background-color: transparent; font-variant-numeri=
c: normal; font-variant-east-asian: normal; font-variant-alternates: normal=
; font-variant-position: normal; vertical-align: baseline; white-space: pre=
;"><br /></li><li dir=3D"ltr" style=3D"list-style-type: none; font-size: 11=
pt; 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; font-variant-position: normal; vertical-a=
lign: baseline; white-space: pre;"><p dir=3D"ltr" style=3D"line-height: 1.3=
8; margin-top: 0pt; margin-bottom: 0pt;" role=3D"presentation"><span style=
=3D"font-size: 11pt; background-color: transparent; font-weight: 700; font-=
variant-numeric: normal; font-variant-east-asian: normal; font-variant-alte=
rnates: normal; font-variant-position: normal; vertical-align: baseline; te=
xt-wrap: wrap;">Node-defined (The chaotic, centralizing option): </span><sp=
an style=3D"font-size: 11pt; background-color: transparent; font-variant-nu=
meric: normal; font-variant-east-asian: normal; font-variant-alternates: no=
rmal; font-variant-position: normal; vertical-align: baseline; text-wrap: w=
rap;">This strategy would encourage third-party mempool providers to implem=
ent their subjective preferences on transaction facilitation. The significa=
nt tradeoff here is the potential fracturing of the mempool and private, mi=
ning-pool-centric inclusion requirements, which could lead to increased cen=
tralization and censorship.</span></p></li><li dir=3D"ltr" style=3D"list-st=
yle-type: none; font-size: 11pt; font-family: Arial, sans-serif; color: rgb=
(0, 0, 0); background-color: transparent; font-variant-numeric: normal; fon=
t-variant-east-asian: normal; font-variant-alternates: normal; font-variant=
-position: normal; vertical-align: baseline; white-space: pre;"><br /></li>=
<li dir=3D"ltr" style=3D"list-style-type: none; font-size: 11pt; font-famil=
y: Arial, sans-serif; color: rgb(0, 0, 0); background-color: transparent; f=
ont-variant-numeric: normal; font-variant-east-asian: normal; font-variant-=
alternates: normal; font-variant-position: normal; vertical-align: baseline=
; white-space: pre;"><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: 700; font-variant-numeric=
: normal; font-variant-east-asian: normal; font-variant-alternates: normal;=
 font-variant-position: normal; vertical-align: baseline; text-wrap: wrap;"=
>Miner-defined (The rational, pessimistic option): </span><span style=3D"fo=
nt-size: 11pt; background-color: transparent; font-variant-numeric: normal;=
 font-variant-east-asian: normal; font-variant-alternates: normal; font-var=
iant-position: normal; vertical-align: baseline; text-wrap: wrap;">The fina=
l strategy involves removing all policies and flags, allowing miners to dec=
ide based on transaction fees or other out-of-band terms. This approach sim=
plifies the network at the cost of significantly reducing the utility for u=
sers who may need special handling for their transactions.

</span></p></li></ul><span dir=3D"ltr" style=3D"line-height: 1.38; margin-t=
op: 14pt; margin-bottom: 4pt;"><span style=3D"font-size: 12pt; font-family:=
 Arial, sans-serif; color: rgb(102, 102, 102); background-color: transparen=
t; font-variant-numeric: normal; font-variant-east-asian: normal; font-vari=
ant-alternates: normal; font-variant-position: normal; vertical-align: base=
line; white-space-collapse: preserve;">Arguments for User-Definition</span>=
</span><p dir=3D"ltr" style=3D"line-height: 1.38; margin-top: 0pt; margin-b=
ottom: 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-east-asian: normal; font-variant-alternates: normal; =
font-variant-position: normal; vertical-align: baseline; white-space-collap=
se: preserve;">Option 1 is favored here because it provides a balanced appr=
oach that enhances user experience and network functionality without overly=
 complicating the Bitcoin protocol or risking centralization. By standardiz=
ing flags that indicate user preferences, we can achieve greater harmony an=
d utility within the Bitcoin network, supporting diverse user needs while m=
aintaining decentralization.=C2=A0</span></p><br /><p dir=3D"ltr" style=3D"=
line-height: 1.38; margin-top: 0pt; margin-bottom: 0pt;"><span style=3D"fon=
t-size: 11pt; font-family: Arial, sans-serif; color: rgb(0, 0, 0); backgrou=
nd-color: transparent; font-variant-numeric: normal; font-variant-east-asia=
n: normal; font-variant-alternates: normal; font-variant-position: normal; =
vertical-align: baseline; white-space-collapse: preserve;">More importantly=
, we may be able to prevent mempool fragmentation and privatization to mine=
rs and pools for direct transaction inclusion by intentionally supporting f=
lags that better compete and match transaction use cases within the open me=
mpool network instead of censoring them arbitrarily.</span></p><p dir=3D"lt=
r" 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-varia=
nt-east-asian: normal; font-variant-alternates: normal; font-variant-positi=
on: normal; vertical-align: baseline; white-space-collapse: preserve;"><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-family: Arial, =
sans-serif; color: rgb(102, 102, 102); background-color: transparent; font-=
variant-numeric: normal; font-variant-east-asian: normal; font-variant-alte=
rnates: normal; font-variant-position: normal; vertical-align: baseline; wh=
ite-space-collapse: preserve;">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); background-color: transparent; font-variant-numeric: normal; font-va=
riant-east-asian: normal; font-variant-alternates: normal; font-variant-pos=
ition: normal; vertical-align: baseline; white-space-collapse: preserve;">T=
he introduction of these signals could influence transaction fee markets an=
d network congestion patterns:</span></p><ul style=3D"margin-top: 0px; marg=
in-bottom: 0px; padding-inline-start: 48px;"><li dir=3D"ltr" style=3D"list-=
style-type: disc; font-size: 11pt; font-family: Arial, sans-serif; color: r=
gb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; f=
ont-variant-east-asian: normal; font-variant-alternates: normal; font-varia=
nt-position: normal; vertical-align: baseline; white-space: pre;"><p dir=3D=
"ltr" style=3D"line-height: 1.38; margin-top: 0pt; margin-bottom: 0pt;" rol=
e=3D"presentation"><span style=3D"font-size: 11pt; background-color: transp=
arent; font-variant-numeric: normal; font-variant-east-asian: normal; font-=
variant-alternates: normal; font-variant-position: normal; vertical-align: =
baseline; text-wrap: wrap;">DNR potentially improves next-block fee competi=
tion and improves network throughput by providing clearer signals about tra=
nsaction permanence and relevance.</span></p></li><li dir=3D"ltr" style=3D"=
list-style-type: disc; font-size: 11pt; font-family: Arial, sans-serif; col=
or: rgb(0, 0, 0); background-color: transparent; font-variant-numeric: norm=
al; font-variant-east-asian: normal; font-variant-alternates: normal; font-=
variant-position: normal; vertical-align: baseline; white-space: pre;"><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: t=
ransparent; font-variant-numeric: normal; font-variant-east-asian: normal; =
font-variant-alternates: normal; font-variant-position: normal; vertical-al=
ign: baseline; text-wrap: wrap;">RBF allows for dynamic fee adjustments tha=
t can enhance the certainty of transaction confirmations during peak times,=
 benefiting users who need timely processing.

</span></p></li></ul><span dir=3D"ltr" style=3D"line-height: 1.38; margin-t=
op: 16pt; margin-bottom: 4pt;"><span style=3D"font-size: 14pt; font-family:=
 Arial, sans-serif; color: rgb(67, 67, 67); background-color: transparent; =
font-weight: 700; font-variant-numeric: normal; font-variant-east-asian: no=
rmal; font-variant-alternates: normal; font-variant-position: normal; verti=
cal-align: baseline; white-space-collapse: preserve;">Do-Not-Replace (DNR) =
Use Cases</span></span><p dir=3D"ltr" style=3D"line-height: 1.38; margin-to=
p: 0pt; margin-bottom: 0pt;"><span style=3D"font-size: 11pt; font-family: A=
rial, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-=
variant-numeric: normal; font-variant-east-asian: normal; font-variant-alte=
rnates: normal; font-variant-position: normal; vertical-align: baseline; wh=
ite-space-collapse: preserve;">DNR is valuable in scenarios where transacti=
on finality is crucial upon submission, without the risk of later alteratio=
ns due to increased fees. Here are some specific use cases:

</span></p><ul style=3D"margin-top: 0px; margin-bottom: 0px; padding-inline=
-start: 48px;"><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:=
 transparent; font-variant-numeric: normal; font-variant-east-asian: normal=
; font-variant-alternates: normal; font-variant-position: normal; vertical-=
align: baseline; white-space: pre;"><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: n=
ormal; font-variant-east-asian: normal; font-variant-alternates: normal; fo=
nt-variant-position: normal; vertical-align: baseline; text-wrap: wrap;">Po=
int-of-Sale Transactions:</span></p><ul style=3D"margin-top: 0px; margin-bo=
ttom: 0px; padding-inline-start: 48px;"><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-v=
ariant-east-asian: normal; font-variant-alternates: normal; font-variant-po=
sition: normal; vertical-align: baseline; white-space: pre;"><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-varia=
nt-alternates: normal; font-variant-position: normal; vertical-align: basel=
ine; text-wrap: wrap;">Example: Retailers or service providers accepting Bi=
tcoin in a face-to-face setting need transactions to be final immediately t=
o prevent fraud.</span></p></li><li dir=3D"ltr" style=3D"list-style-type: d=
isc; 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; font-variant-position: =
normal; vertical-align: baseline; white-space: pre;"><p dir=3D"ltr" style=
=3D"line-height: 1.38; margin-top: 0pt; margin-bottom: 0pt;" role=3D"presen=
tation"><span style=3D"font-size: 11pt; background-color: transparent; font=
-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alt=
ernates: normal; font-variant-position: normal; vertical-align: baseline; t=
ext-wrap: wrap;">Usage: By using the DNR flag, merchants can ensure that on=
ce a transaction is broadcast, it cannot be replaced, thereby securing the =
payment process at the point of sale.</span></p></li></ul></li><li dir=3D"l=
tr" 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; font-variant-position: normal; vertical-align: baseline; white-spac=
e: pre;"><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; backgr=
ound-color: transparent; font-variant-numeric: normal; font-variant-east-as=
ian: normal; font-variant-alternates: normal; font-variant-position: normal=
; vertical-align: baseline; text-wrap: wrap;">Wage Payments:</span></p><ul =
style=3D"margin-top: 0px; margin-bottom: 0px; padding-inline-start: 48px;">=
<li dir=3D"ltr" style=3D"list-style-type: disc; font-size: 11pt; font-famil=
y: Arial, sans-serif; color: rgb(0, 0, 0); background-color: transparent; f=
ont-variant-numeric: normal; font-variant-east-asian: normal; font-variant-=
alternates: normal; font-variant-position: normal; vertical-align: baseline=
; white-space: pre;"><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-var=
iant-east-asian: normal; font-variant-alternates: normal; font-variant-posi=
tion: normal; vertical-align: baseline; text-wrap: wrap;">Example: Employer=
s paying salaries in Bitcoin require certainty that the transaction amounts=
 cannot be altered once sent.</span></p></li><li dir=3D"ltr" style=3D"list-=
style-type: disc; font-size: 11pt; font-family: Arial, sans-serif; color: r=
gb(0, 0, 0); background-color: transparent; font-variant-numeric: normal; f=
ont-variant-east-asian: normal; font-variant-alternates: normal; font-varia=
nt-position: normal; vertical-align: baseline; white-space: pre;"><p dir=3D=
"ltr" style=3D"line-height: 1.38; margin-top: 0pt; margin-bottom: 0pt;" rol=
e=3D"presentation"><span style=3D"font-size: 11pt; background-color: transp=
arent; font-variant-numeric: normal; font-variant-east-asian: normal; font-=
variant-alternates: normal; font-variant-position: normal; vertical-align: =
baseline; text-wrap: wrap;">Usage: DNR provides employers the confidence to=
 execute payroll transactions knowing that the payments cannot be replaced =
or canceled, ensuring employees receive the exact intended amounts.</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-col=
or: transparent; font-variant-numeric: normal; font-variant-east-asian: nor=
mal; font-variant-alternates: normal; font-variant-position: normal; vertic=
al-align: baseline; white-space: pre;"><p dir=3D"ltr" style=3D"line-height:=
 1.38; margin-top: 0pt; margin-bottom: 0pt;" role=3D"presentation"><span st=
yle=3D"font-size: 11pt; background-color: transparent; font-variant-numeric=
: normal; font-variant-east-asian: normal; font-variant-alternates: normal;=
 font-variant-position: normal; vertical-align: baseline; text-wrap: wrap;"=
>Automated Payments for Services:</span></p><ul style=3D"margin-top: 0px; m=
argin-bottom: 0px; padding-inline-start: 48px;"><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; font-va=
riant-position: normal; vertical-align: baseline; white-space: pre;"><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: tra=
nsparent; font-variant-numeric: normal; font-variant-east-asian: normal; fo=
nt-variant-alternates: normal; font-variant-position: normal; vertical-alig=
n: baseline; text-wrap: wrap;">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=
: 11pt; font-family: Arial, sans-serif; color: rgb(0, 0, 0); background-col=
or: transparent; font-variant-numeric: normal; font-variant-east-asian: nor=
mal; font-variant-alternates: normal; font-variant-position: normal; vertic=
al-align: baseline; white-space: pre;"><p dir=3D"ltr" style=3D"line-height:=
 1.38; margin-top: 0pt; margin-bottom: 0pt;" role=3D"presentation"><span st=
yle=3D"font-size: 11pt; background-color: transparent; font-variant-numeric=
: normal; font-variant-east-asian: normal; font-variant-alternates: normal;=
 font-variant-position: normal; vertical-align: baseline; text-wrap: wrap;"=
>Usage: DNR can be applied to ensure that automated recurring payments are =
processed without the risk of being replaced, thus simplifying financial pl=
anning 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; fo=
nt-family: Arial, sans-serif; color: rgb(67, 67, 67); background-color: tra=
nsparent; font-weight: 700; font-variant-numeric: normal; font-variant-east=
-asian: normal; font-variant-alternates: normal; font-variant-position: nor=
mal; vertical-align: baseline; white-space-collapse: preserve;">Replace-by-=
Fee (RBF) Use Cases</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: transpar=
ent; font-variant-numeric: normal; font-variant-east-asian: normal; font-va=
riant-alternates: normal; font-variant-position: normal; vertical-align: ba=
seline; white-space-collapse: preserve;">RBF is essential for transactions =
where timing and confirmation speed are more critical than the immediacy of=
 finality. Here are applicable scenarios:</span></p><ul style=3D"margin-top=
: 0px; margin-bottom: 0px; padding-inline-start: 48px;"><li dir=3D"ltr" sty=
le=3D"list-style-type: disc; 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;=
 font-variant-position: normal; vertical-align: baseline; white-space: pre;=
"><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-co=
lor: transparent; font-variant-numeric: normal; font-variant-east-asian: no=
rmal; font-variant-alternates: normal; font-variant-position: normal; verti=
cal-align: baseline; text-wrap: wrap;">High-Frequency Trading:</span></p><u=
l style=3D"margin-top: 0px; margin-bottom: 0px; padding-inline-start: 48px;=
"><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-variant-numeric: normal; font-variant-east-asian: normal; font-varian=
t-alternates: normal; font-variant-position: normal; vertical-align: baseli=
ne; white-space: pre;"><p dir=3D"ltr" style=3D"line-height: 1.38; margin-to=
p: 0pt; margin-bottom: 0pt;" role=3D"presentation"><span style=3D"font-size=
: 11pt; background-color: transparent; font-variant-numeric: normal; font-v=
ariant-east-asian: normal; font-variant-alternates: normal; font-variant-po=
sition: normal; vertical-align: baseline; text-wrap: wrap;">Example: Trader=
s on cryptocurrency exchanges who need to rapidly adjust their positions ba=
sed on market conditions.</span></p></li><li dir=3D"ltr" style=3D"list-styl=
e-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; font-variant-p=
osition: normal; vertical-align: baseline; white-space: pre;"><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-vari=
ant-alternates: normal; font-variant-position: normal; vertical-align: base=
line; text-wrap: wrap;">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.</span></p></li></=
ul></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: transp=
arent; font-variant-numeric: normal; font-variant-east-asian: normal; font-=
variant-alternates: normal; font-variant-position: normal; vertical-align: =
baseline; white-space: pre;"><p dir=3D"ltr" style=3D"line-height: 1.38; mar=
gin-top: 0pt; margin-bottom: 0pt;" role=3D"presentation"><span style=3D"fon=
t-size: 11pt; background-color: transparent; font-variant-numeric: normal; =
font-variant-east-asian: normal; font-variant-alternates: normal; font-vari=
ant-position: normal; vertical-align: baseline; text-wrap: wrap;">Emergency=
 Service Payments:</span></p><ul style=3D"margin-top: 0px; margin-bottom: 0=
px; padding-inline-start: 48px;"><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-variant-=
east-asian: normal; font-variant-alternates: normal; font-variant-position:=
 normal; vertical-align: baseline; white-space: pre;"><p dir=3D"ltr" style=
=3D"line-height: 1.38; margin-top: 0pt; margin-bottom: 0pt;" role=3D"presen=
tation"><span style=3D"font-size: 11pt; background-color: transparent; font=
-variant-numeric: normal; font-variant-east-asian: normal; font-variant-alt=
ernates: normal; font-variant-position: normal; vertical-align: baseline; t=
ext-wrap: wrap;">Example: Payments for time-sensitive services, such as pre=
mium fast delivery or emergency technical services.</span></p></li><li dir=
=3D"ltr" style=3D"list-style-type: disc; font-size: 11pt; font-family: Aria=
l, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-var=
iant-numeric: normal; font-variant-east-asian: normal; font-variant-alterna=
tes: normal; font-variant-position: normal; vertical-align: baseline; white=
-space: pre;"><p dir=3D"ltr" style=3D"line-height: 1.38; margin-top: 0pt; m=
argin-bottom: 0pt;" role=3D"presentation"><span style=3D"font-size: 11pt; b=
ackground-color: transparent; font-variant-numeric: normal; font-variant-ea=
st-asian: normal; font-variant-alternates: normal; font-variant-position: n=
ormal; vertical-align: baseline; text-wrap: wrap;">Usage: When quick servic=
e 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.</span></p></li></ul></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; font-va=
riant-position: normal; vertical-align: baseline; white-space: pre;"><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: tra=
nsparent; font-variant-numeric: normal; font-variant-east-asian: normal; fo=
nt-variant-alternates: normal; font-variant-position: normal; vertical-alig=
n: baseline; text-wrap: wrap;">Bidding in Auctions:</span></p><ul style=3D"=
margin-top: 0px; margin-bottom: 0px; padding-inline-start: 48px;"><li dir=
=3D"ltr" style=3D"list-style-type: disc; font-size: 11pt; font-family: Aria=
l, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-var=
iant-numeric: normal; font-variant-east-asian: normal; font-variant-alterna=
tes: normal; font-variant-position: normal; vertical-align: baseline; white=
-space: pre;"><p dir=3D"ltr" style=3D"line-height: 1.38; margin-top: 0pt; m=
argin-bottom: 0pt;" role=3D"presentation"><span style=3D"font-size: 11pt; b=
ackground-color: transparent; font-variant-numeric: normal; font-variant-ea=
st-asian: normal; font-variant-alternates: normal; font-variant-position: n=
ormal; vertical-align: baseline; text-wrap: wrap;">Example: Participants in=
 online auctions who need to ensure their payments go through before the au=
ction closes.</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); bac=
kground-color: transparent; font-variant-numeric: normal; font-variant-east=
-asian: normal; font-variant-alternates: normal; font-variant-position: nor=
mal; vertical-align: baseline; white-space: pre;"><p dir=3D"ltr" style=3D"l=
ine-height: 1.38; margin-top: 0pt; margin-bottom: 0pt;" role=3D"presentatio=
n"><span style=3D"font-size: 11pt; background-color: transparent; font-vari=
ant-numeric: normal; font-variant-east-asian: normal; font-variant-alternat=
es: normal; font-variant-position: normal; vertical-align: baseline; text-w=
rap: wrap;">Usage: Auction participants can use RBF to adjust their transac=
tion fees to outpace other transactions in times of network congestion, sec=
uring their winning bids.</span></p></li></ul></li><li dir=3D"ltr" style=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: nor=
mal; font-variant-east-asian: normal; font-variant-alternates: normal; font=
-variant-position: normal; vertical-align: baseline; white-space: pre;"><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; font-variant-position: normal; vertical-a=
lign: baseline; text-wrap: wrap;">Dynamic Fee Management for Wallets:</span=
></p><ul style=3D"margin-top: 0px; margin-bottom: 0px; padding-inline-start=
: 48px;"><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: trans=
parent; font-variant-numeric: normal; font-variant-east-asian: normal; font=
-variant-alternates: normal; font-variant-position: normal; vertical-align:=
 baseline; white-space: pre;"><p dir=3D"ltr" style=3D"line-height: 1.38; ma=
rgin-top: 0pt; margin-bottom: 0pt;" role=3D"presentation"><span style=3D"fo=
nt-size: 11pt; background-color: transparent; font-variant-numeric: normal;=
 font-variant-east-asian: normal; font-variant-alternates: normal; font-var=
iant-position: normal; vertical-align: baseline; text-wrap: wrap;">Example:=
 Users sending non-urgent transactions who want to minimize fees but are wi=
lling 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: Aria=
l, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-var=
iant-numeric: normal; font-variant-east-asian: normal; font-variant-alterna=
tes: normal; font-variant-position: normal; vertical-align: baseline; white=
-space: pre;"><p dir=3D"ltr" style=3D"line-height: 1.38; margin-top: 0pt; m=
argin-bottom: 0pt;" role=3D"presentation"><span style=3D"font-size: 11pt; b=
ackground-color: transparent; font-variant-numeric: normal; font-variant-ea=
st-asian: normal; font-variant-alternates: normal; font-variant-position: n=
ormal; vertical-align: baseline; text-wrap: wrap;">Usage: RBF provides flex=
ibility, allowing users to start with a lower fee and only increase it if t=
he transaction confirmation is delayed, optimizing their transaction fee ex=
penditures.

</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; fo=
nt-family: Arial, sans-serif; color: rgb(67, 67, 67); background-color: tra=
nsparent; font-variant-numeric: normal; font-variant-east-asian: normal; fo=
nt-variant-alternates: normal; font-variant-position: normal; vertical-alig=
n: baseline; white-space-collapse: preserve;">Adoption and Transition Strat=
egy &amp; Requirements</span></span><p dir=3D"ltr" style=3D"line-height: 1.=
38; margin-top: 0pt; margin-bottom: 0pt;"><span style=3D"font-size: 11pt; f=
ont-family: Arial, sans-serif; color: rgb(0, 0, 0); background-color: trans=
parent; font-variant-numeric: normal; font-variant-east-asian: normal; font=
-variant-alternates: normal; font-variant-position: normal; text-decoration=
-line: underline; text-decoration-skip-ink: none; vertical-align: baseline;=
 white-space-collapse: preserve;">It is implicit, until now, that within th=
is strategy is a requirement for Core and other implementations to abandon =
strategies within Option 2, by specifically removing and rejecting policy t=
ools like </span><span style=3D"font-size: 11pt; font-family: Arial, sans-s=
erif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 700;=
 font-variant-numeric: normal; font-variant-east-asian: normal; font-varian=
t-alternates: normal; font-variant-position: normal; text-decoration-line: =
underline; text-decoration-skip-ink: none; vertical-align: baseline; white-=
space-collapse: preserve;">mempoolfullrbf</span><span style=3D"font-size: 1=
1pt; 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; font-variant-position: normal; text-deco=
ration-line: underline; text-decoration-skip-ink: none; vertical-align: bas=
eline; white-space-collapse: preserve;">, or other attempts to overrule, fi=
lter, or otherwise filter and hamper the propagation of valid, non-destruct=
ive 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; fon=
t-family: Arial, sans-serif; color: rgb(0, 0, 0); background-color: transpa=
rent; font-variant-numeric: normal; font-variant-east-asian: normal; font-v=
ariant-alternates: normal; font-variant-position: normal; vertical-align: b=
aseline; white-space-collapse: preserve;">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 t=
he benefits and implications of these new transaction signals.</span></p><b=
r /></div>

<p></p>

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