Quote from: cjp on January 10, 2015, 11:11:04 AM

How does the current Bitcoin software deal with sequence numbers that are not 0xffffffff? Is every value for the sequence number accepted? If a miner receives double-spends with different sequence numbers (all with zero confirmations), will it choose the one with the highest sequence number for inclusion in a block?

It seems that the "microtransaction channel" implementation in bitcoinj always uses sequence number 0 for to-be-updated transactions. Is this the recommended way of setting the sequence number?

Transactions don't get replaced in the client based on sequence number ~~any more~~. More recently, the handling of nLockTime was also changed, so that transactions with an nLockTime in the future can't enter the memory pool. There's some history at the wiki.

I posted an idea for payment channels to the bitcoin-development list yesterday, provoking a discussion of this very topic.