Cryptocurrencies are becoming increasingly entrenched in everyday life. Every day can bring a new direction to industry. Take the same sector of DeFi that appeared not so long ago, but still causes conflicting feelings and views of the crypto community. There is a greater sense of influx of new people into the industry, which means that new ideas will not wait. But not all people want to live honestly, especially in the crypto industry. On the contrary, many people want to make a fortune quickly, but not honestly. This article will tell what dust attacks are. What this method carries, which has been actively developing recently.
Dust attack is a technical term that is used in relation to cryptocurrency. One of the options for attackers, with which they can get confidential information about the holder of a digital asset. Everything happens as follows. A small amount of cryptocurrency, for example, 0.00000001 BTC, comes to the user’s wallet as a digital asset. Such a small amount is called dust. The asset holder may not even see this transfer, as it is almost invisible. A logical question may arise: why do you immediately need to think that this is the work of fraudsters, unless one of the users can simply make a mistake with the address when transferring? The answer is simple. If the transaction is 0.00000001 BTC, the commission for such a transfer will be much larger than the amount of the shipment. On this basis, it is clear that it is not logical to carry out such a transaction for any other purpose. This small amount will not be traded. If the recipient did not have a cryptocurrency before, then 0.000001 BTC will simply remain in his account. But if the BTC was already in the wallet and this dust was added to it, the user will probably make the transfer with it without even noticing it. This dust had no effect before, so cryptocurrency holders simply ignored it. But over the last couple of years, the dust has become a sort of leverage for the holders of the cryptocurrency.
It is no secret that opening a crypto purse without verifying identity is quite easy. In recent years, however, authorities in some countries have made it mandatory for cryptocurrency exchanges to include this aspect in their work. Therefore, if a trader wants to trade on such an exchange, he will have to provide confidential information about his person. It is understandable to register a purse by e-mail, but if you want to trade, then the trader will have to provide proof of his identity. Now consider what happens next. At the exchanger, the trader buys the cryptocurrency and further places it on his purse. Fraudsters throw dust on this purse. The trader doesn’t see it, and he’s trading all his digital assets. Because many blockchains are public, fraudsters will be able to track the transfer quite easily. Also, because it is not uncommon to leak information from exchanges, it is easy for the attackers to see to whom the transfer was made. But even without leaking information, a dust transaction can still lead to the person or company to which the funds came.
After all the above, the fraudsters will turn to the holder of the cryptocurrency on which the dust rests. And they’re talking about how things are going to go on: the trader or the company will have to pay a certain amount of money to buy off the attacker, otherwise they will reveal the identity of the victim.
It would seem, but what’s wrong with that? There are two aspects that make not everyone want to reveal themselves:
- A person works in the civil service. And from this it follows that he can not have any other ways of earning money. If he violates this prohibition, the employee is dismissed, and he can also receive a fine and incur administrative responsibility.
- A person may be the holder of a large amount of cryptocurrency. It follows that if his identity is known to everyone, then he can get people much scarier than these scammers. And in order not to put his life in danger, he will be ready to give everything for the sake of maintaining the confidentiality of his identity.
So it turns out that if you do not notice in a timely manner how the dust got on the wallet, then this can lead to disastrous consequences. Of course, some of the holders of the asset agree to the terms of the attacker and transfer the requested amount, but this is not an option, since the extortion will continue.
How can you fight this?
There are not so many ways to deal with this type of fraud and they are not very convenient. But if you want your funds to be safe, as well as yourself, then you will have to use these methods.
- Create a new wallet for each new transfer. This is not 100% dust protection, as you can create a verification wallet on the exchange once. But the rest of the e-wallets can be created as much as you like, so this move can make you less susceptible to small transactions.
- Samuorai is a crypto wallet that uses a transaction tracking feature. He finds out which coins came from where and in what quantity. There is a tracking trigger threshold: 0.00000546 BTC or less. It turns out that when such a transaction amount arrives, the user of the wallet receives a notification about it and he already decides whether to mix it with his main assets or not.
- There is also a third way. If you notice that you have received dust on your wallet, then you can use two options: exchange cryptocurrency or use a mixer. In the event that the amount of cryptocurrency is not so large, it can simply be exchanged and there will be no trace of dust left. But if the amount is large enough, then you can resort to the services of a cryptocurrency mixer. Of course, you will need to pay a certain percentage, but this is in any case better than the problems that you might encounter.
As you can understand – to protect yourself from a dust attack 100% will not work. But it is possible to provide at least some security. Yes, these methods are not very convenient, but again, the security is worth it.
Analysts from the companies CipherTrace and Chainalysis express the opinion that dust attacks are not only made by scammers. They believe that the dust can also be scattered by law enforcement agencies, along with cryptocurrency exchanges. The first uses the dust to track transactions, so that if anything happens, you can get to the thieves of the crypt. The latter, however, do this in order to protect themselves when exchanges are hacked and funds are stolen. But of course, they do not deny that dust attacks are also created by intruders.
Shortly after the creation of the Samourai purse, the second with a tracking function, the Bitcoin Core, was added. However, many members of the crypto community were sceptical about this innovation. They believe that such wallets will not be popular with ordinary users. Indeed, few people will worry about their own $1,000. But large holders are likely to use this method of tracing to secure their funds from fraudsters. But let’s not forget that these purses do not give 100% security to the holder of the cryptocurrency. Since attackers can bypass the system by translating not in 0.00000546 BTC, but in 0.00000547 BTC. In this way they will spend not much more money and will also be able to follow the desired purse.
Examples of dust attacks
The transaction tracking feature was introduced into the purse only after a dust attack was made on users. How it happened. In 2018, the management saw suspicious activity on their purses. Clients’ purses were replenished by the same amount of 0.000267 BTC. It was decided to report it on Twitter to inform users. As a result, serious consequences were avoided. After the dust attack was over, the purse managers decided to develop a transaction tracking system and introduce it into their purses.
Steemit media platform and BestMixer.io
The companies used the dust attacks as a marketing tool. Steemit sent news about their innovations and added a small amount of STEEM tokens as a reward.
BestMixer.io did a similar scheme. Together with a small amount of BTC sent an ad spam.
In August 2019, Litecoin was subjected to a dust attack. About 50 purses, which were previously empty, began receiving transactions in the amount of 0.00000546 LTC. The cryptocurrency exchange Binance decided to investigate the incident and found that only 50 wallets had been attacked. But Glassnode co-founder Jan Happel decided to carry out his investigation, after which it was revealed that – 300,000 wallets suffered.
What can be derived from this article? If you own a sizable amount of crypto, and yet you have no desire to reveal your identity, you should take care of your security. If possible, use wallets with transaction tracking functions, examples are given above. Try to use two purses: one for everyday purposes, which will be for frequent and small transfers, and the other for large and rare. Also remember that if the dust has entered your purse and you have noticed it, try to get rid of it as soon as possible by means of mixers or exchangers. When you hold small amounts in cryptocurrency, you have nothing to worry about. It is unlikely that intruders will want to spend time and money on purses with an account of $2,000-$3,000. For them, it is simply not advantageous. Hence the conclusion: if you have a small amount of cryptocurrency, it is most likely that dust attacks will spare you.