Original source: Odaily Planet Daily
Original author: Golem
What is RBF
RBF stands for Replace By Fee, which is a way for Bitcoin to speed up transactions. It allows users to replace an unconfirmed transaction with a new transaction with a higher fee for the purpose of speeding up the transaction. As long as the new substitution transaction comes with a sufficiently high fee, miners have an incentive to package the substitution transaction into a block.
However, the requirement to use RBF is that the alternate transaction created must use one or more of the same UTXOs as the original transaction as the transaction input.
Why is it possible to use RBF to snipe Bitcoin transactions
According to the above requirements for using RBF, generally speaking, we cannot replace other people's transactions, because we cannot obtain other people's signature authorization, and we cannot use the UTXO in other people's transactions.
But because the signatures used by almost all Bitcoin exchanges are PSBT (partially signed Bitcoin transactions), it makes it possible for us to snipe at other Bitcoin transactions. To put it simply, the seller will privately authorize the signature to the market when listing the asset, and the signature content can be popularly understood as "agree to sell the asset when receiving xxx BTC", and when a buyer is willing to trade, the market will combine the two parts of the signature of the buyer and seller into a complete signature transaction and broadcast it to the mempool.
After entering the mempool, because of the transparency of the Bitcoin network, the seller's signature is no longer known only to the market, but is exposed to everyone. Therefore, we can get the seller's signature authorization, and use the RBF function to reconstruct a high-fee substitute transaction to complete the sniping, so that the original buyer's transaction will be invalidated, and the bamboo basket will be empty.
How to use RBF to snipe Bitcoin transactions
RBF itself has a certain technical complexity, and the average trader has a certain threshold for becoming proficient in using it. Fortunately, there are already people on the market who have developed relevant sniper tools, even beginners can use them, so let's take the sniper tools provided by Magisat as a tutorial.
1. Copy the transaction ID to be sniped
Taking Magic Eden as an example, if we want to snipe Runestone's transaction now, first open Runestone's trading interface and click on details
Then click on the transaction ID on the transaction details page below to jump to mempool
Finally, in the mempool, copy the transaction ID and remember the rate of the transaction, because the rate must be higher than the original transaction when sniped.
2. Use Magisat platform tools to complete transaction sniping
Magisat is a Bitcoin NFT trading platform that has simultaneously launched an instant sniping tool. Click on the link below to access the tool:
https://magisat.io/instant-snipe
Then paste the transaction id you just copied into the search box, click "Submit" first, you can see that the details of the transaction have appeared below, and then we click "Buy floor"
When you get to the page of creating a transaction, as shown in the figure below, first set the rate, which is generally twice as high as the original transaction for the success of the sniping, then fill in the runestone receiving address, and finally click Buy listings to pop up the wallet to sign and confirm the transaction.
At this time, if you return to the mempool to view the original transaction, as shown in the following figure, the transaction has been replaced as a new transaction, and the history of the replaced transaction is also displayed below.
Note: The examples selected in the above tutorial are for illustration purposes only and do not snipe the transactions in the examples
It is currently possible to snipe at the trading of Bitcoin NFTs and BRC 20 using this method, and the Runes asset is expected to support it soon. It is also important to note that not all sniping is successful, it has a lot to do with the miner/pool, if the miner/pool that packs the next block does not support RBF, then they will still pack the original transaction into the block even though you have replaced the transaction. However, from a profit point of view, in order to obtain higher fee income, it seems inevitable that miners will support RBF.
How to prevent being sniped
Empathy, if we ourselves are buyers and certainly don't want our transactions to be sniped by others, then what can be done to prevent our transactions from being sniped?
Some readers may feel that since sniper transactions are essentially RBF features used, they can be avoided by simply disabling RBF at signing time. However, this cannot be completely avoided, and at most such a disabling is disabling the RBF function by disabling itself, and miners can still package transactions with high fees into blocks after substitution.
So the only reliable way now is to pull up the gas as soon as possible when buying the asset, so that the transaction does not get stuck and the sniper has enough time to operate. Of course, if you are really unlucky and encounter a situation where you don't get fast for half an hour and get sniped, you can also follow the above tutorial for counter-sniping.
summary
Blockchain is a veritable dark forest, where everyone is a hunter hiding in the shadows, waiting for an opportunity to hunt others while worrying about exposing themselves. Using RBF to snipe transactions on Bitcoin is actually similar to the "clip bot" in Ethereum, except that with the narrowing of the information gap and the emergence of tools, the threshold for sniping Bitcoin transactions has become lower to the point where everyone can use it.
Even if you don't want to snipe someone else's trade as a hunter, you should master the methods to counter-snipe at critical moments. After all, the best defense is offense.