Child Pays for Parent (CPFP) is a mechanism used in the Bitcoin network to prioritize an unconfirmed transaction by attaching a higher fee to a subsequent transaction, which is dependent on the unconfirmed one. By incentivizing miners with a higher fee, both the child and parent transactions are more likely to be confirmed in the next block.

Imagine Alice wants to purchase an item online using Bitcoin. She sends her payment to the store’s Bitcoin address, but due to an oversight, she sets a transaction fee that is lower than the current network demand. As a result, her transaction remains unconfirmed for hours. The store informs her about the delay and suggests using the CPFP method to expedite the process. Alice, being not too tech-savvy, asks the store to do it for her.

The store then creates a “child” transaction with a higher fee, spending the unconfirmed “parent” transaction’s output, thus incentivizing miners to pick up both transactions.

1. User-Controlled Confirmation: The recipient (or anyone in possession of the UTXO) can decide to speed up the confirmation of a transaction.
2. Flexibility: CPFP can be used any time after a transaction has been sent, giving users flexibility in deciding when to prioritize a transaction.
3. Enhanced User Experience: For wallet developers, implementing CPFP can significantly improve the user experience, especially during times of network congestion.

1. Fee Estimation: To make the best use of CPFP, one must estimate an appropriate fee that will make the transaction attractive for miners, without overpaying.
2. Multiple Parents: Situations where multiple unconfirmed transactions are chained together might require a more complex approach.
3. Network Fluctuations: Bitcoin network congestion and fee rates can change rapidly. A fee that might seem high now can become average in a few hours.

To implement CPFP programmatically:

1. Locate the Unconfirmed Transaction (UTXO): Identify the unconfirmed transaction output which was sent to you.
2. Create a New Transaction: Spend the unconfirmed Bitcoin (from the UTXO) back to yourself. This is the “child” transaction.
3. Attach a Higher Fee: When creating the child transaction, you can offer a fee higher than the combined fee of both transactions. This increased fee incentivizes miners to process both the child and its parent, as they will be getting a higher reward.
4. Broadcast the Child Transaction: Once created, you can broadcast the child transaction to the network.

Here’s how the store could programmatically implement CPFP:

1. Loading the Necessary Modules:

const bitcore = require("bitcore-lib");
const axios = require("axios");

2. Fetching UTXOs and Identifying the Unconfirmed Transaction:

const address = process.env.STORE_BITCOIN_ADDRESS;
const { data: utxos } = await axios.get(`https://blockstream.info/testnet/api/address/${address}/utxo`);
const unconfirmedUtxo = utxos.find(utxo => utxo.status.confirmed === false);

The store’s server fetches all unspent transaction outputs (UTXOs) related to their Bitcoin address. Among these, it identifies Alice’s unconfirmed transaction.

3. Constructing the Child Transaction:

const transaction = new bitcore.Transaction();
const scriptPubKey = bitcore.Script.buildPublicKeyHashOut(address).toString();
transaction.from({
txId: unconfirmedUtxo.txid,
outputIndex: unconfirmedUtxo.vout,
script: scriptPubKey,
satoshis: unconfirmedUtxo.value
});
const fee = 100000;
transaction.change(address);
transaction.fee(fee);

A new transaction (child) is constructed that spends the unconfirmed UTXO. The fee is set significantly higher than usual to ensure that miners pick it up quickly.

4. Signing and Broadcasting the Transaction:

const storePrivateKey = new bitcore.PrivateKey(process.env.STORE_BITCOIN_PRIVATE_KEY);
transaction.sign(storePrivateKey);
const serializedTransaction = transaction.serialize();
const { data: result } = await axios.post(
"https://api.blockcypher.com/v1/btc/test3/txs/push",
{ tx: serializedTransaction }
);

The store signs the transaction with its private key and then broadcasts it to the network.

5. Sending the Response:

res.send({ txId: result.tx.hash });

Finally, the transaction ID of the child transaction is returned as a response. This can be used to track the transaction on a block explorer.

Full Code

const bitcore = require("bitcore-lib");
const axios = require("axios");
exports.childPaysForParent = async (req, res) => {
try {
// Load the Bitcoin private key
const privateKey = new bitcore.PrivateKey.fromWIF(process.env.BITCOIN_PRIVATE_KEY, testnet);
const address = privateKey.toAddress(testnet);
// Fetch the unspent transaction outputs (UTXOs)
const { data: utxos } = await axios.get(`https://blockstream.info/testnet/api/address/${address}/utxo`);
// Identify the unconfirmed UTXO (the parent transaction we want to expedite)
const unconfirmedUtxo = utxos.find(utxo => utxo.status.confirmed === false);
if (!unconfirmedUtxo) {
return res.status(400).send({ error: "No unconfirmed UTXOs found." });
}
const transaction = new bitcore.Transaction();
const scriptPubKey = bitcore.Script.buildPublicKeyHashOut(privateKey.toPublicKey()).toString();
// Use the unconfirmed UTXO in our new transaction
transaction.from({
txId: unconfirmedUtxo.txid,
outputIndex: unconfirmedUtxo.vout,
script: scriptPubKey,
satoshis: unconfirmedUtxo.value
});
const fee = 100000; // Higher fee than the parent transaction
const remaining = unconfirmedUtxo.value - fee;
transaction.change(address);
transaction.fee(fee);
transaction.sign(privateKey);
const serializedTransaction = transaction.serialize();
const { data: result } = await axios.post(
"https://api.blockcypher.com/v1/btc/test3/txs/push",
{ tx: serializedTransaction }
);
res.send({ txId: result.tx.hash });
} catch (error) {
console.error(error);
res.status(500).send({ error: error.message });
}
};

By using the CPFP method, the store ensured that Alice’s payment was confirmed quickly, ensuring a smooth shopping experience for her. This real-world scenario highlights the utility and practicality of the CPFP technique in the Bitcoin ecosystem.

Child Pays for Parent is an effective method to expedite Bitcoin transactions, especially during times of network congestion. For users and developers alike, understanding CPFP can lead to a smoother Bitcoin experience and more predictable transaction confirmation times. As the Bitcoin network continues to evolve, mechanisms like CPFP will play a crucial role in ensuring the usability and adaptability of this groundbreaking technology.