Bitcoin Ordinals, launched two years ago, continue to thrive, defying critics. These NFT-style collectibles have drawn enthusiasts to an innovative, albeit controversial, practice known as “replace-by-fee (RBF) sniping,” which some skilled users claim can yield significant profits under ideal market conditions. This tactic involves outbidding others to acquire Ordinals, sparking opposition from purists and prompting platforms to attempt mitigation.
In the Bitcoin network, pending transactions reside in the mempool until processed. RBF snipers essentially bribe for priority, akin to skipping a queue for a bus, securing valuable assets before others. While perceived as unfair by some, others like Quary from Bitcoin marketplace Magisat see RBF as intrinsic to Bitcoin’s competitive nature. Initially, Quary profited significantly, but as more snipers joined, earnings thinned.
Quary once proposed sending funds to an author willing to explore RBF sniping for an article, with profits or losses earmarked for charity. The venture proved challenging and financially draining, highlighting the risks as opposed to easy windfalls. Assisted by Quary, the writer recouped part of the losses through a fortunate asset sale, resulting in a small contribution to charity.
Various NFT platforms, such as Magic Eden, have started implementing updates to counteract sniping. To execute a snipe, one identifies pending transactions suitable for interception, often with custom scripts or platforms like Magisat. Success demands extra transaction fees, but even seasoned snipers can face losses. The practice flourishes amid sufficient market demand, yet presents risks, particularly for novices.
As the practice of sniping engages a competitive fee auction, established snipers often wage fee wars to secure mispriced assets. Such instances underscore the high-stakes nature of sniping and the relentless pursuit of profit. For Magic Eden, sniping disrupted user experience, prompting updates to thwart snipers by only permitting pre-approved buyer transactions.
Despite platform interventions, sniping persists elsewhere. The author’s brief sniping career concluded with a nominal donation and a now-worthless asset, serving as a cautionary tale about the speculative and perilous nature of RBF sniping. Sniping’s persistence reflects diverse platform strategies, signaling that, while thwarted on some fronts, it remains a facet of Bitcoin trading.
