Merge bitcoin/bitcoin#27145: wallet: when a block is disconnected, update transactions that are no longer conflicted

89df7987c2f1eea42454c2b0efc31a924fbfd3a8 Add wallets_conflicts (Antoine Riard)
dced203162d45e542f187f8d0d07dab85c52cf28 wallet, tests: mark unconflicted txs as inactive (ishaanam)
096487c4dcfadebe5ca959927f5426cae1c304d5 wallet: introduce generic recursive tx state updating function (ishaanam)

Pull request description:

  This implements a fix for #7315. Previously when a block was disconnected any transactions that were conflicting with transactions mined in that block were not updated to be marked as inactive. The fix implemented here is described on the [Bitcoin DevWiki](https://github.com/bitcoin-core/bitcoin-devwiki/wiki/Wallet-Transaction-Conflict-Tracking#idea-refresh-conflicted). A test which tested the previous behavior has also been updated.

  Second attempt at #17543

ACKs for top commit:
  achow101:
    ACK 89df7987c2f1eea42454c2b0efc31a924fbfd3a8
  rajarshimaitra:
    tACK 89df7987c2f1eea42454c2b0efc31a924fbfd3a8.
  glozow:
    ACK 89df7987c2f1eea42454c2b0efc31a924fbfd3a8
  furszy:
    Tested ACK 89df7987

Tree-SHA512: 3133b151477e8818302fac29e96de30cd64c09a8fe3a7612074a34ba1a332e69148162e6cb3f1074d9d9c9bab5ef9996967d325d8c4c99ba42b5fe3b66a60546

3 files changed, 133 insertions, 8 deletions

diff --git a/test/functional/test_runner.py b/test/functional/test_runner.py
index a6f1bbae7d..5895e1de84 100755
--- a/test/functional/test_runner.py
+++ b/test/functional/test_runner.py
@@ -196,6 +196,8 @@ BASE_SCRIPTS = [
     'wallet_watchonly.py --legacy-wallet',
     'wallet_watchonly.py --usecli --legacy-wallet',
     'wallet_reorgsrestore.py',
+    'wallet_conflicts.py --legacy-wallet',
+    'wallet_conflicts.py --descriptors',
     'interface_http.py',
     'interface_rpc.py',
     'interface_usdt_coinselection.py',
diff --git a/test/functional/wallet_abandonconflict.py b/test/functional/wallet_abandonconflict.py
index 934f44588d..2691507773 100755
--- a/test/functional/wallet_abandonconflict.py
+++ b/test/functional/wallet_abandonconflict.py
@@ -226,20 +226,16 @@ class AbandonConflictTest(BitcoinTestFramework):
         assert_equal(double_spend["walletconflicts"], [txAB1])
 
         # Verify that B and C's 10 BTC outputs are available for spending again because AB1 is now conflicted
+        assert_equal(alice.gettransaction(txAB1)["confirmations"], -1)
         newbalance = alice.getbalance()
         assert_equal(newbalance, balance + Decimal("20"))
         balance = newbalance
 
-        # There is currently a minor bug around this and so this test doesn't work.  See Issue #7315
-        # Invalidate the block with the double spend and B's 10 BTC output should no longer be available
-        # Don't think C's should either
+        # Invalidate the block with the double spend. B & C's 10 BTC outputs should no longer be available
         self.nodes[0].invalidateblock(self.nodes[0].getbestblockhash())
+        assert_equal(alice.gettransaction(txAB1)["confirmations"], 0)
         newbalance = alice.getbalance()
-        #assert_equal(newbalance, balance - Decimal("10"))
-        self.log.info("If balance has not declined after invalidateblock then out of mempool wallet tx which is no longer")
-        self.log.info("conflicted has not resumed causing its inputs to be seen as spent.  See Issue #7315")
-        assert_equal(balance, newbalance)
-
+        assert_equal(newbalance, balance - Decimal("20"))
 
 if __name__ == '__main__':
     AbandonConflictTest().main()
diff --git a/test/functional/wallet_conflicts.py b/test/functional/wallet_conflicts.py
new file mode 100755
index 0000000000..802b718cd5
--- /dev/null
+++ b/test/functional/wallet_conflicts.py
@@ -0,0 +1,127 @@
+#!/usr/bin/env python3
+# Copyright (c) 2023 The Bitcoin Core developers
+# Distributed under the MIT software license, see the accompanying
+# file COPYING or http://www.opensource.org/licenses/mit-license.php.
+
+"""
+Test that wallet correctly tracks transactions that have been conflicted by blocks, particularly during reorgs.
+"""
+
+from decimal import Decimal
+
+from test_framework.test_framework import BitcoinTestFramework
+from test_framework.util import (
+        assert_equal,
+)
+
+class TxConflicts(BitcoinTestFramework):
+    def add_options(self, parser):
+        self.add_wallet_options(parser)
+
+    def set_test_params(self):
+        self.num_nodes = 3
+
+    def skip_test_if_missing_module(self):
+        self.skip_if_no_wallet()
+
+    def get_utxo_of_value(self, from_tx_id, search_value):
+        return next(tx_out["vout"] for tx_out in self.nodes[0].gettransaction(from_tx_id)["details"] if tx_out["amount"] == Decimal(f"{search_value}"))
+
+    def run_test(self):
+        self.log.info("Send tx from which to conflict outputs later")
+        txid_conflict_from_1 = self.nodes[0].sendtoaddress(self.nodes[0].getnewaddress(), Decimal("10"))
+        txid_conflict_from_2 = self.nodes[0].sendtoaddress(self.nodes[0].getnewaddress(), Decimal("10"))
+        self.generate(self.nodes[0], 1)
+        self.sync_blocks()
+
+        self.log.info("Disconnect nodes to broadcast conflicts on their respective chains")
+        self.disconnect_nodes(0, 1)
+        self.disconnect_nodes(2, 1)
+
+        self.log.info("Create transactions that conflict with each other")
+        output_A = self.get_utxo_of_value(from_tx_id=txid_conflict_from_1, search_value=10)
+        output_B = self.get_utxo_of_value(from_tx_id=txid_conflict_from_2, search_value=10)
+
+        # First create a transaction that consumes both A and B outputs.
+        #
+        # | tx1 |  ----->  |                |         |               |
+        #                  |  AB_parent_tx  |  ---->  |   Child_Tx    |
+        # | tx2 |  ----->  |                |         |               |
+        #
+        inputs_tx_AB_parent = [{"txid": txid_conflict_from_1, "vout": output_A}, {"txid": txid_conflict_from_2, "vout": output_B}]
+        tx_AB_parent = self.nodes[0].signrawtransactionwithwallet(self.nodes[0].createrawtransaction(inputs_tx_AB_parent, {self.nodes[0].getnewaddress(): Decimal("19.99998")}))
+
+        # Secondly, create two transactions: One consuming output_A, and another one consuming output_B
+        #
+        # | tx1 |  ----->  |     Tx_A_1     |
+        #                   ----------------
+        # | tx2 |  ----->  |     Tx_B_1     |
+        #
+        inputs_tx_A_1 = [{"txid": txid_conflict_from_1, "vout": output_A}]
+        inputs_tx_B_1 = [{"txid": txid_conflict_from_2, "vout": output_B}]
+        tx_A_1 = self.nodes[0].signrawtransactionwithwallet(self.nodes[0].createrawtransaction(inputs_tx_A_1, {self.nodes[0].getnewaddress(): Decimal("9.99998")}))
+        tx_B_1 = self.nodes[0].signrawtransactionwithwallet(self.nodes[0].createrawtransaction(inputs_tx_B_1, {self.nodes[0].getnewaddress(): Decimal("9.99998")}))
+
+        self.log.info("Broadcast conflicted transaction")
+        txid_AB_parent = self.nodes[0].sendrawtransaction(tx_AB_parent["hex"])
+        self.generate(self.nodes[0], 1, sync_fun=self.no_op)
+
+        # Now that 'AB_parent_tx' was broadcast, build 'Child_Tx'
+        output_c = self.get_utxo_of_value(from_tx_id=txid_AB_parent, search_value=19.99998)
+        inputs_tx_C_child = [({"txid": txid_AB_parent, "vout": output_c})]
+
+        tx_C_child = self.nodes[0].signrawtransactionwithwallet(self.nodes[0].createrawtransaction(inputs_tx_C_child, {self.nodes[0].getnewaddress() : Decimal("19.99996")}))
+        tx_C_child_txid = self.nodes[0].sendrawtransaction(tx_C_child["hex"])
+        self.generate(self.nodes[0], 1, sync_fun=self.no_op)
+
+        self.log.info("Broadcast conflicting tx to node 1 and generate a longer chain")
+        conflicting_txid_A = self.nodes[1].sendrawtransaction(tx_A_1["hex"])
+        self.generate(self.nodes[1], 4, sync_fun=self.no_op)
+        conflicting_txid_B = self.nodes[1].sendrawtransaction(tx_B_1["hex"])
+        self.generate(self.nodes[1], 4, sync_fun=self.no_op)
+
+        self.log.info("Connect nodes 0 and 1, trigger reorg and ensure that the tx is effectively conflicted")
+        self.connect_nodes(0, 1)
+        self.sync_blocks([self.nodes[0], self.nodes[1]])
+        conflicted_AB_tx = self.nodes[0].gettransaction(txid_AB_parent)
+        tx_C_child = self.nodes[0].gettransaction(tx_C_child_txid)
+        conflicted_A_tx = self.nodes[0].gettransaction(conflicting_txid_A)
+
+        self.log.info("Verify, after the reorg, that Tx_A was accepted, and tx_AB and its Child_Tx are conflicting now")
+        # Tx A was accepted, Tx AB was not.
+        assert conflicted_AB_tx["confirmations"] < 0
+        assert conflicted_A_tx["confirmations"] > 0
+
+        # Conflicted tx should have confirmations set to the confirmations of the most conflicting tx
+        assert_equal(-conflicted_AB_tx["confirmations"], conflicted_A_tx["confirmations"])
+        # Child should inherit conflicted state from parent
+        assert_equal(-tx_C_child["confirmations"], conflicted_A_tx["confirmations"])
+        # Check the confirmations of the conflicting transactions
+        assert_equal(conflicted_A_tx["confirmations"], 8)
+        assert_equal(self.nodes[0].gettransaction(conflicting_txid_B)["confirmations"], 4)
+
+        self.log.info("Now generate a longer chain that does not contain any tx")
+        # Node2 chain without conflicts
+        self.generate(self.nodes[2], 15, sync_fun=self.no_op)
+
+        # Connect node0 and node2 and wait reorg
+        self.connect_nodes(0, 2)
+        self.sync_blocks()
+        conflicted = self.nodes[0].gettransaction(txid_AB_parent)
+        tx_C_child = self.nodes[0].gettransaction(tx_C_child_txid)
+
+        self.log.info("Test that formerly conflicted transaction are inactive after reorg")
+        # Former conflicted tx should be unconfirmed as it hasn't been yet rebroadcast
+        assert_equal(conflicted["confirmations"], 0)
+        # Former conflicted child tx should be unconfirmed as it hasn't been rebroadcast
+        assert_equal(tx_C_child["confirmations"], 0)
+        # Rebroadcast former conflicted tx and check it confirms smoothly
+        self.nodes[2].sendrawtransaction(conflicted["hex"])
+        self.generate(self.nodes[2], 1)
+        self.sync_blocks()
+        former_conflicted = self.nodes[0].gettransaction(txid_AB_parent)
+        assert_equal(former_conflicted["confirmations"], 1)
+        assert_equal(former_conflicted["blockheight"], 217)
+
+if __name__ == '__main__':
+    TxConflicts().main()