CPFP stands for “Child Pays For Parent”.
Since the first transaction (parent) is not easily approved, the second transaction (child) is set with a higher fee to encourage to approve the transaction.
- First transaction (parent) = Low Fee → Approval time is slow.
- Reset transaction (child) = High Fee → Approval time is fast.
In other words, CPFP is one of the methods to speed up the approval of bitcoin.
In order for a Bitcoin payment to be approved, the transaction must be approved by a miner.
When the transaction is approved, the buyer of the bitcoin pays a fee to the miner. If the amount of the fee is small, the transaction may take a long time to be approved because it becomes less attractive to the miner.
In such cases, CPFP is considered as one of the measures to promote approval.
Pros and Cons of CPFP
The most important advantage of CPFP is that it may speed up the approval process. Normally, in Bitcoin, a new block that acts as a ledger is created at the rate of one every 10 minutes, and transactions are written into the block to complete the payment. No matter how smoothly the process goes, it takes nearly 10 minutes. In addition, there is no limit to the number of delays that can occur.
Especially when the popularity of Bitcoin heated up, the amount of unapproved transactions could be enormous. If you want your payments to be approved quickly, try CPFP.
CPFP also has some disadvantages. First, you need to set up the transaction twice.
Another disadvantage is that you have to pay double the fee for the first transaction and the second transaction.
When a transaction does not go through because the fee offered was too low, CPFP encourages approval by setting a higher fee.