A Bitcoin node policy (BIP125) allowing an unconfirmed transaction to be replaced by a new one that pays a higher fee.
Replace By Fee (RBF) is a node policy in Bitcoin that allows an unconfirmed transaction in the mempool to be replaced by another transaction that includes a higher mining fee. It is used to expedite confirmation during periods of congestion. RBF works by using the same inputs as the original transaction but offering miners a greater incentive through higher fees to include the replacement transaction in the next block instead of the original.
"When the Bitcoin mempool is congested, it can take a long time for transactions to be confirmed. Miners prioritize transactions with higher fees when selecting transactions to include in a block. To expedite a transaction, you can resend it with a higher fee using the RBF feature."
RBF is particularly useful for transactions that need to be confirmed quickly. However, not all Bitcoin wallets support RBF. The replacement policy requires signaling in the original transaction (setting the nSequence field below the final value) to indicate that it may be replaced. In contrast, Bitcoin Cash prioritizes reliable 0‑conf usability via low fees and larger blocks and does not implement RBF.
"If you're using a Bitcoin wallet that supports the RBF feature, you can use it to expedite your transaction during periods of high network congestion."
While RBF can be useful, it can also be abused. If a transaction is sent with RBF enabled, the receiver should wait for confirmations to ensure the transaction won't be replaced. This raises double-spend risk for 0‑conf commerce. Merchants accepting 0‑confirmation payments are particularly vulnerable when RBF is used. Bitcoin Cash took a different approach and does not implement RBF, focusing instead on reliable 0‑conf payments for point‑of‑sale and everyday transactions.
"If a transaction is sent with RBF enabled, the receiver should wait for at least a few confirmations to ensure it won't be replaced. Otherwise, the sender could resend the same UTXOs elsewhere with a higher fee, causing the initial transaction to be replaced and the receiver to lose their funds."
The RBF policy was introduced in Bitcoin Core 0.12.0 (February 2016) as a way to deal with transaction congestion in the mempool. It was specified in BIP125 during a period of debate about how Bitcoin should scale. The feature was controversial, with critics arguing it undermined reliability for everyday payments. Differences on payment reliability versus fee-market policies were among the technical disagreements that preceded the split between BTC and BCH.
"The Replace By Fee (RBF) feature was introduced in Bitcoin Core 0.12.0 as a solution to deal with transaction congestion in the Bitcoin mempool."
All terms and definitions may update as the Cryptionary improves.