What’s Replace By Fee (RBF)?

what is replace by fee

Replace-by-fee (RBF) (or Bump Fee) is a feature of some Bitcoin wallets that allows a user to replace a low-fee transaction with a new one with a higher fee. This is done by creating a new transaction with a higher fee and the same inputs as the original transaction, but with a higher fee rate, and miners will prioritize it over the original transaction because it has a higher fee rate.

RBF can be useful in situations where a user has sent a transaction with a low fee, and it is taking a long time to confirm. By using RBF, the user can increase the fee and speed up the confirmation time.

Benefits of RBF

Replace-by-Fee (RBF) is a feature of Bitcoin transactions that provides several benefits to users. One of the most significant benefits of RBF is that it allows users to increase the speed of their time-sensitive transactions by increasing the fee associated with the transaction. When network congestion is high, transactions can take longer than usual to confirm. However, with RBF, users can adjust the fee amount associated with their transactions to ensure that they are confirmed in a timely manner.

In addition to increasing transaction speed, RBF also provides users with more flexibility and control over their transactions. If a user realizes they have set an inadequate fee or forgot to include a fee altogether, they can use RBF to adjust the fee amount and ensure that their transaction is confirmed as quickly as possible.

Another benefit of RBF is that it can help users avoid stuck transactions. When a transaction is stuck in the mempool due to low fees, it can take hours or even days to confirm. In certain cases, a transaction may get entirely removed from the mempool, resulting in the funds being returned to the sender. However, with RBF, users can replace their low-fee transaction with a higher fee one, which can help avoid transactions getting stuck in the mempool.

Find out more: What’s the mempool?

Finally, RBF can potentially save users money on transaction fees. By setting lower fees initially and then increasing them only if necessary, users can potentially reduce the overall cost of their transactions. These benefits make RBF a valuable feature for users who want more control over their bitcoin transactions and faster confirmation times.

How RBF Works

When a user sends a Bitcoin transaction, it is broadcast to the network and placed in the mempool, where it waits to be confirmed by a miner. The transaction fee paid by the user determines how quickly the transaction will be confirmed. If the fee paid by the user is too low, the transaction may take a long time to confirm, especially during times of high network congestion.

To use RBF, a user must enable the feature in their RBF-compatible Bitcoin wallet before sending a transaction. When the user sends a transaction with RBF enabled, the wallet will include a flag in the transaction that indicates that it can be replaced by a transaction with a higher fee. The user can then create a new transaction with a higher fee and broadcast it to the network. When the miners see the new transaction with the higher fee, they will prioritize it over the original transaction because it has a higher fee rate.

Bitcoin Wallets Supporting RBF

Many popular Bitcoin wallets support Replace-by-Fee (RBF) as a feature, including:

  • BlueWallet: a popular mobile wallet with RBF feature.
  • Samourai: a non-custodial open-source wallet for Android with advanced features including RBF.
  • Electrum: a desktop Bitcoin wallet that supports RBF as well as other advanced features.
  • Mycelium: an open source mobile Bitcoin wallet that supports RBF and is known for its user-friendly interface.
  • Exodus: a non-custodial wallet for desktop, mobile, and browser-based applications, which supports RBF.
  • Trezor: an open source Bitcoin wallet that’s RF compatible.
  • Ledger Live: the official desktop and mobile wallet software for Ledger hardware wallets, which also supports RBF.

It’s important to note that not all Bitcoin wallets support RBF, so it’s important to check if a wallet supports this feature before relying on it.

Our Reviews of Wallets Supporting RBF

Andy Owethu Avatar

Join our monthly newsletter

Be in the know, receive exclusive offers by joining our email list.