Bitcoin v3 Transaction Policy

Overview

Bitcoin v3 transaction policy refers to the policy framework that applies special relay and mempool restrictions to transactions with nVersion=3. The design was developed to improve anti-pinning properties and fee-bumping reliability for transaction protocols that must work with pre-signed or interdependent transactions. The name “v3 policy” appeared during development, while BIP 431 standardized the more descriptive term Topologically Restricted Until Confirmation, or TRUC.

The policy constrains the unconfirmed topology. A participating transaction is expected to have only a limited parent-child structure, and connected unconfirmed transactions must also use the policy. Additional virtual-size limits reduce how much low-feerate or high-absolute-fee data can be attached to a transaction package. Replacement and sibling-eviction rules can then evaluate a smaller, bounded structure instead of an unrestricted dependency graph.

The number 3 is stored in the transaction version field, but the policy should not be confused with a consensus-level transaction type. Bitcoin blocks can contain transactions that nodes did not previously relay through their own mempools, provided those transactions satisfy consensus rules. A transaction may therefore be valid for inclusion in a block while being nonstandard or rejected by a particular node’s local policy.

For current documentation and implementation work, TRUC is the clearer name because it describes the temporary restriction that lasts until confirmation. Developers encountering “v3 transaction policy” in older release notes, pull requests, or wallet code should map it to the TRUC design and verify the exact rules of the Bitcoin Core version they support. Testing should cover parent-child construction, transaction fee bumping, replacement, mempool acceptance, and the transition to confirmed status on the canonical chain.