What Is the Replace-by-Fee (RBF) Protocol and How Is It Activated?

Replace-by-Fee (RBF) is a protocol feature that allows an unconfirmed transaction to be replaced by a new, conflicting transaction that pays a higher fee. It is activated by the sender setting a specific flag (an RBF signal) in the original transaction before broadcasting it.

This signal indicates to the network that the sender reserves the right to replace the transaction later. Without this explicit opt-in, nodes may adhere to a "first-seen" policy, which rejects the replacement transaction.