Crypto Dusting refers to a dusting attack on a cryptocurrency wallet. A dust attack is a hack trick in which tiny amounts of cryptocurrency (dust) are sent to thousands of wallets in order to uncover the identity of the wallet’s owner.
Lets explore everything you need to know about Crypto Dusting Attacks.
What Is Crypto Dust?
Crypto dust is a term used to refer to a tiny fragment or piece of a cryptocurrency. A Crypto Dust is normally too tinny that most users don’t even know it exists in their wallet.
What is a dusting attack in Crypto?
As explained above, a dusting attack refers to a hack intended to deanonymize and break the privacy of cryptocurrency users. The attack is orchestrated by sending small amounts of crypto (called dust) to victims’ crypto wallets. The amount of cryptocurrency sent in a dusting attack is usually too small and often barely noticeable by the victims. Oftentimes malicious actors will send the same crypto that is already stored in a wallet.
How Is Crypto Dust Made?
There are two main ways in which you can end up with Crypto Dust. Generally speaking, Crypto dust can be made or transferred.
The first scenario is, you have 0.9562141 BTC in your wallet, and you need to make a payment of 0.9562 Bitcoin to another wallet. If the transaction fee is 0.00001 BTC, you’ll have 0.0000041 BTC (410 satoshis) left. The amount of crypto in your wallet after the transaction is called dust because its too small it can no longer pay even transaction fees so it can not be used.
The second way is where the dust is actually transferred. This happens in a form of malicious attack. In this attack, hackers seek to invade the privacy of cryptocurrency wallet owners by sending very small amounts of tokens to many accounts or multiple addresses at once, then tracking these funds to unmask the identity of wallet owners for off-blockchain hacking.
How Do Crypto Dust Attacks Work?
For a dust attack to take place, the funds sent must be transferred. The attack sends you minute amounts of crypto and hopes you to add that dust to other funds in the same wallet and send it out. Using advanced hacking technology, the hacker will find out all the exchanges under the wallet. Once this happens, the hacker will be able to unmask the identities of the wallet owner.
So What Happens when Your Identity Is Unmasked in a Dust Attack?
Once you are blown out of the water, you will become the object of a series of phishing, cyber extortion, and targeted hacks off the blockchain. While DeFi wallets make it impossible to reach owners from their blockchain wallets, their centralized counterparts require a certain level of KYC, meaning a dust attack would likely leave them unmasked.
How do You stop Crypto dusting?
First as explained above, the attacker hopes you will add the dust to other cryptos and transfers it. If you receive it but do not transfer it then its a dead end for the hacker.
For some wallets especially ones from exchangers, you are able to swap any dust into the native currency of the exchanger. This also makes it impossible for the hacker to keep up with your ID.
Using a Good VPN may also help you to add a layer of security that makes it harder to be tracked.
Some wallets have Hierarchical Deterministic (HD) functionality. This means that the wallet automatically creates a new address for every transaction you make. If your wallet is HD enabled, it will be alot harder for hackers to track your transactions.