Ordinals have established themselves firmly in the Bitcoin ecosystem, defying early skepticism. These NFT-style digital collectibles have sparked interest, particularly among those engaging in “replace-by-fee (RBF) sniping.” This controversial technique allows opportunistic buyers to cut in line, purchasing sought-after items before others’ transactions go through.
Replace-by-fee sniping involves paying higher transaction fees to prioritize one’s purchase in the Bitcoin network’s queue, a practice that has polarized the community. Enthusiasts see it as a legitimate use of Bitcoin’s built-in mechanisms, while critics argue it is unfair, undermining genuine collectors who patiently wait their turn.
Quary, a participant in this niche market, highlights that RBF is intrinsic to Bitcoin’s fee auction model, which assumes all users are profit-driven. In times with fewer snipers, earnings could be significant, but increased competition has dispersed potential profits.
Eager to understand this phenomenon, I entered the world of RBF sniping equipped with guidance and some Bitcoin funding from Quary. My goal was simple: if successful, donate the proceeds; if unsuccessful, return the leftovers. Yet the venture soon proved more challenging than anticipated. Despite diligent efforts and a stroke of luck when an asset unexpectedly sold, overall, my entry into the sniping world was fraught with risks and realized little profit.
Marketplaces like Magic Eden have noticed the disruption caused by RBF snipers, prompting them to implement changes to protect their user experience. Their recent updates aim to curtail sniping activities, directly responding to user complaints about transaction inefficiencies and escalating fees that only benefit miners rather than the collectors or platforms.
RBF sniping involves identifying pending transactions in marketplaces and offering higher fees, hoping a transaction will be finalized quickly and profitably. Some snipers utilize advanced methods using bots or scripts, while others prefer platforms that simplify the process, such as Magisat.
Despite the theoretical appeal of RBF sniping, the practice is fraught with pitfalls. Often, transaction fees pile up, and assets don’t sell as anticipated. Having learned this the hard way, my brief RBF sniping career ended without the financial victory I’d envisaged, leaving me with some unsellable digital assets.
This experience underscores the complicated dynamics of the Ordinals market, where being sniped is a common frustration for aspiring snipers. High market activity can lead to bidding wars over fees, complicating transactions further.
Magic Eden’s response to these challenges involves pre-approving buyers, akin to a guest list for a private auction. This process uses a Merkle tree structure to manage and verify transactions, limiting sniping opportunities by structuring how sales are finalized.
As it stands, RBF sniping persists in other marketplaces not necessarily employing Magic Eden’s measures, highlighting an ongoing battle between market integrity and opportunist tactics in the ever-evolving world of Bitcoin Ordinals.
