RBF

A RBF (Replace-By-Fee), also known as fee bumping, lets Bitcoin users replace an unconfirmed transaction with a new version that pays higher fees. This speeds up confirmation when transaction fees on the network rise. Users signal this capability upfront to avoid stuck transactions.

RBF works through Bitcoin Improvement Proposal 125 (BIP-125). Senders mark transactions as RBF-eligible by setting the sequence number of inputs to less than the maximum value. To bump fees, users create and broadcast a replacement transaction. It reuses the same inputs (unspent transaction outputs or UTXOs), assigns a higher fee rate, and increments the sequence number. Miners prioritize the higher-fee version, as they select transactions by fee per byte.

For example, you send 0.1 BTC with a low fee during low congestion. If fees spike, RBF lets you replace it with the same 0.1 BTC transfer but at a 5x higher fee. The original vanishes from mempools.

RBF matters because Bitcoin's fixed block size causes fee volatility. It prevents transactions from lingering indefinitely, improving user control and network efficiency. Merchants and exchanges often reject RBF transactions to mitigate double-spend risks, enhancing security.

Key characteristics include opt-in signaling—transactions must explicitly allow replacement. Two types exist: full-RBF (replaces any matching transaction) and any-predecessor (more flexible). Most modern wallets like Electrum support RBF.