Crypto Dusting Attack: What It Is And How To Avoid It

Dusting in the crypto space refers to the number of assets equal to or lower than the transaction costs. For example, the Bitcoin blockchain software, Bitcoin Core, imposed a dust limit for Bitcoin (BTC) of nearly 546 satoshis or 0.00000546 BTC.

In addition, the wallet nodes that deploy such limitations might decline transactions equal to or below the 546 satoshis. Crypto dust can also be a small virtual currency that remains after a particular trade due to closing mistakes and can accumulate over a specific time.

However, the small amount cannot be traded; it can only be converted into the native token of the particular exchange. Additionally, crypto dust poses no significant risks as it is usually used for legitimate trading rather than malicious activities.

Therefore, dusting transactions contain advertising messages because users approach wallet holders via dusting using promotional items than the conventional mailshot system. Even though dusting can’t be of significant concern, digital asset holders must know what a dust attack is all about and how to protect themselves.

Assessing Crypto Dusting Attack

The emergence of blockchain technology paves the way for the increased anonymity of holders of crypto assets because their real names never know them. Instead, they used pseudonyms to hide their true identity and keep their data from the public’s view.

However, the blockchain ledger is traceable, and all transactions are transparent and can be viewed by everyone. As a result, a user can have his activity tracked based on the history of that particular Blockchain address.

In situations where hackers transfer dust to crypto wallets, they seek to breach the privacy of the fund’s owner by tracking the movement of their assets from one address to the next. Sometimes, the attacker’s aim is not to steal crypto assets because simple dusting does not permit such.

Instead, the hacker will link the target’s address to other wallets, which may help them authenticate the victim’s identity via off-blockchain hacking. Crypto dusting attacks can happen in most public blockchains like Bitcoin, Dogecoin, and Litecoin.

Moreover, a dusting attack aims to link the targeted addresses and wallets to the personal information of their related entities or individuals and utilize the knowledge against their victims. Apart from this, the goal of a crypto dusting hacker may be to carry out a phishing scam, identity theft, threat, or blackmail to make some gains.

Are Dusting Attacks Fraud?

While the argument is that dusting attacks can be likened to a scam because it targets an individual’s address, most believe that not all dusting exploits are scams. For example, law enforcement agencies can use the dusting technique to link a particular address to an organization or an individual.

In addition, they can utilize it to track down criminal activities like money laundering, tax evasion, terrorism financing, and other illicit financial dealings.

On the other hand, developers can also deploy dusting to test the stress strength of their software to determine its robustness and functionality.

Cryptocurrency traders usually come in contact with dust due to regular trade, and it is not even considered a threat to the industry. Some crypto exchanges offer to swap services to customers to enable them to change the small number of virtual assets for their native tokens to use in future trading.

Depending on its use, dusting attacks can result in crypto asset losses due to hackers’ use of sophisticated tools to lure victims to phishing platforms and drain their wallets. However, traditional dusting attacks are not used to steal holders’ funds but to identify the individuals or entities behind a particular address and publicize their identity.

Meanwhile, crypto users can prevent themselves from becoming victims of dusting events by using privacy tools, employing the services of dust conversion platforms, and using a hierarchical deterministic (HD) wallet.