Is Bitcoin gathering dust? An analysis of low-amount Bitcoin transactions

In the Bitcoin protocol, dust refers to small amounts of currency that are lower than the fee required to spend them in a transaction. Although "economically irrational", dust is commonly used for achieving unconventional side effects, rather than exchanging value. For instance, dust might be linked to on-chain services or to malicious activity, such as dust attacks attempting to break users' pseudonymity. To study this phenomenon, this paper presents an in depth analysis of Bitcoin transactions involving dust, showing how dust is created and consumed. We identify the top dust creators and consumers and discuss how consumption has evolved over time. Finally, we use the data to identify transactions suspected of being part of dust attacks and quantify their impact on address deanonymization. Our results show that dust is mainly related to on-chain betting services. Transactions likely to be part of dust attacks are a minority of dust creating transactions but, despite their relatively low number, they have a disproportionately high effect on helping attackers to break address pseudonymity.