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What’s a Dusting Attack and How Can You Avoid It?

Dusting attacks are part of the various types of crypto-related attacks today. A dusting attack happens when a hacker sends small amounts of coins (dust) to a crypto owner’s wallet to break their privacy. Attackers usually send out these tiny coin amounts to hundreds or thousands of wallets—the aim being to figure out the wallet addresses and deanonymize the wallet owners.

What is Dust?

Think about the tiny pieces of earth called dust, and that’ll help you understand dust in crypto language. Dust is a trace amount of coins or tokens, so tiny that the average cryptocurrency investor may not notice it. For instance, the minimum unit of Bitcoin is 1 satoshi which equals 0.00000001BTC. 

And while there’s no hard rule about the number of satoshis that constitute dust, it’s widely believed that several hundreds of satoshis can be called dust. Although there’s no standard definition of dust for Bitcoin, the Bitcoin Core classifies any transaction output lower than transaction fees as dust.

In essence, the size of the Bitcoin transaction output is used to check for fraudulent transactions and flag them as spam. For example, a typical Bitcoin transaction (non-SegWit) computes to a dust limit of 546 satoshis and 294 satoshis for native SegWit transactions. 

The implication is that any normal Bitcoin transaction from 546 satoshis and below will be flagged as spam and likely rejected by the nodes (validators). The same goes for a native SegWit transaction from 294 satoshis and below.

Similarly, dust can also refer to the small amount of crypto left in exchange users’ accounts after trading. Unfortunately, dust balances are so small they aren’t tradable. However, some exchanges may allow conversion to specific cryptocurrencies.

How Are Dusting Attacks Done?

Armed with the knowledge that people hardly pay attention to the trace crypto amounts in their wallets, the attackers start dusting numerous wallet addresses by sending out trace amounts of cryptocurrency, e.g., Bitcoin, Litecoin, etc. After dusting these addresses, the attacker does a mass analysis of those addresses in order to find those belonging to the same cryptocurrency wallet.

A dusting attack aims to deanonymize an address by connecting the dusted addresses to their respective owners. Dusting attacks do not give attackers outright access to users’ funds, although a successful attack opens the door to phishing attacks and other forms of digital extortion.

Okay, here’s how it works: Whenever you send UTXO (unspent Transaction Output) cryptocurrencies like BTC, LTC, BCH, DASH, etc., the balance from that transaction, which is logically supposed to remain in the same address, is moved to a different address. 

That’s to say, the change is recorded in another address but in the same wallet. This happens every time you send crypto. Automatically Sending and recording the change in another address called the change address is for security purposes, to make it virtually impossible for someone to track the mother wallet address on the public blockchain.

Dusting takes advantage of the process of “spending crypto from different addresses” by sending tiny amounts to numerous related addresses at a time.  The attacker then tracks fund movement from the dust transactions and combines any related addresses to unmask the main address. 

Then with other resources, the attackers do their homework to figure out the real identities or owners of the addresses. As we said earlier, unmasking the address identity or owner doesn’t let the attacker access funds, but it helps them figure out the real owners of the addresses.

How to Avoid Dusting Attacks and Keep your Funds Safe?

Here are several ways you can protect yourself from a dusting attack;

#1. Get a wallet app that allows you to mark small deposits. A great way to protect your wallet when you suspect you’ve been dusted is to get a wallet app that allows you to track and mark dust as “do not spend.” Such wallets include Samourai wallet and most Ethereum forks like BTC Electrum, LTC Electrum, DASH Electrum, BCH electrum, BSV Electrum, etc.

#2. Do not spend or use dust from an unknown source. Make sure to not spend dust whenever you suddenly receive it in your wallet. Instead, mark it as “do not spend” using any of the wallets described above.

#3. Monitor your wallet all the time. You may want to get a wallet that drops push notifications every time new crypto enters your wallet.

#4. Never give out your private keys or other personal info related to your wallet.

#5. Convert your dust after transactions into crypto. A smart move to keep dusting attackers off your tail is to convert your dust to crypto. Most popular exchanges like Binance, Gemini, FTX, etc., offer the conversion feature.

#6. Consider using an HD (hierarchical-deterministic) wallet. An HD wallet creates new addresses each time you run a transaction, making it more difficult to track you.

#7. Avoid Airdrops from unverified crypto development teams. Attackers could use mass airdrops as strategies to inject dust into people’s wallets. 

#8. Use VPNs as much as you can. Using a VPN can help you maintain a certain level of privacy while running a transaction if an attacker is stalking you through your activity online.

Conclusion

Dusting attacks are malicious attempts to deanonymize your crypto wallet addresses. Understanding how they operate keeps you two steps ahead of attackers. As such, you can secure your wallet addresses by following the precautions and solutions shared above.

Written by Anthony Fernandez
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