Bitcoin Dusting Attacks Threaten Anonymity of Several Wallets

Nuno Teodoro

Bitcoin wallet service  Samourai Wallet has recently warned its users that they may be targets of a dusting attack.

The announcement was made on the company’s Twitter earlier today.


The Samourai team consider themselves to be privacy activists, and deeply committed to maintaining transactional privacy while striving to create the most private bitcoin wallet.

Dusting Attacks

A dusting attack involves a malicious agent sending a small number of satoshis to multiple addresses. The amount sent is so insignificant that it started being referred to as dust, hence “dusting” attack.

When the wallets that receive “dust” make the further transactions, the attackers are able to observe the movement of the funds on the blockchain. By combining transactional data from a wide range of addresses, they are able to link multiple addresses with each other. Doing so makes it possible to identify certain addresses as belonging to a certain person or company.

To mitigate the problem and maintain the anonymity of its users, Samourai Wallet recommends wallet owners activate the coin control feature. This allows users to control how they spend their bitcoins when making a transaction, essentially giving them the opportunity to choose what addresses will be the ones sending the bitcoins and which of the bitcoins you have received will be used.

It is important to note that anyone can be targeted. If you have a bitcoin wallet that has receive a very small number of bitcoin, it is possible that your anonymity might also be in jeopardy.

Financial Privacy and Bitcoin Anonymity

As we progress in the digital age, keeping our personal and financial information anonymous will be of greater value and importance, as it is possible to determine a lot about someone knowing their wealth and spending habits. The problem is that every credit card purchase you make can be monitored by governments. and mobile payment apps like Venmo have recently been shown to publicly reveal all user transactions by default.

Bitcoin granted us the liberty to transact with each other without the need of third party involvement. However, due to its pseudonymous nature, it does not allow full financial privacy as transactions can be traced and linked to individuals or companies through chain analysis techniques. A study from Princeton University has already proved this point,  while BitFury claims to have been able to de-anonymize over 15% of the Bitcoin network.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.