Bitcoin Core 31.0 Privacy Bug Exposes Sender IP Under Certain Conditions
A new Bitcoin Core 31.0 privacy bug can reveal a transaction originator’s sender IP address to a receiving peer when specific network conditions are met.
The Bitcoin Core 31.0 privacy bug affects a narrow set of users running Bitcoin Core 31.0 with -privatebroadcast enabled, broadcasting via the sendrawtransaction RPC, able to reach Tor for outbound connections, still able to make direct IPv4/IPv6 outbound connections, and using BIP324 v2 transport without disabling it.
The issue breaks the intended privacy of “private broadcast” during a fallback path. If a v2 handshake fails, Bitcoin Core retries using v1 transport, potentially bypassing Tor and exposing the originator’s clearnet IP to the peer. Onion/I2P peers are not affected in the same way.
It does not put private keys, wallet balances, or Bitcoin consensus at risk, and it is described as a network privacy problem rather than a funds-draining exploit.
Workarounds until a fix in Bitcoin Core 31.1: disable -privatebroadcast, disable v2 transport (-v2transport=0), or route all outbound P2P traffic through Tor (e.g., via -proxy=127.0.0.1:9050). The highest exposure is for privacy-sensitive users who enabled Bitcoin Core 31.0 privacy protections specifically to prevent IP linkage.
Neutral
This is a Bitcoin Core network privacy issue, not a consensus or funds-draining exploit. That typically limits direct market-wide downside because holders are not at immediate risk of losing coins, and no exchange-wide instability is implied.
Still, privacy failures can trigger short-term trader behavior changes among privacy-sensitive users (e.g., increased node configuration changes, temporary changes in relaying/broadcast practices). Similar cases in the past—privacy model regressions or transport-layer bugs—often create localized concern rather than broad sell pressure, unless they coincide with wider security incidents.
In the short term, expect mild “headline risk”: privacy-focused communities may react quickly, and developers/operators may rush to apply workarounds while awaiting Bitcoin Core 31.1.
In the long term, if the 31.1 fix is delivered smoothly and widely adopted, the impact should fade. Market stability is more likely to be influenced by macro/ETF flows than by this narrow Bitcoin Core 31.0 privacy bug.