Introduction

This approach, of a dusting attack that traces wallet addresses, can be brought into action for several reasons, and sometimes it’s not an attack at all. 

While blockchain technology is considered to be secure thanks to its cryptographic roots, the real deal is that a couple of security issues pervade the market. One strange but common security issue is a dusting attack, a form of offensive strategy performed to identify wallets and their owners. 

Dusting attacks are employed by both law enforcement agencies and criminals, for their own reasons. At the same time, one seeks to track down users who used digital assets for illegal reasons, and other attempts to reveal addresses for foul reasons. 

The method is effective for both parties, but nonetheless, it is notable that fewer and fewer attacks are performed as the years go by. However, this doesn’t mean you won’t face one of these once or twice in your crypto career.

What is a Crypto Dusting attack?

A dusting attack is a hostile method used to uncloak and break the privacy of users by sending small amounts of crypto to their wallets. That amount is so small it’s almost unnoticeable. 

Generally, hostile actors will sen the same crypto that is already there in the wallet. From the Bitcoin perspective everything that is defined as a satoshi, which is 1 satoshi = 0.00000001 Bitcoin coins, is considered to be dust. 

When you keep receiving anything between a couple of satoshis to a few hundred, you are most likely a victim of a dusting attack.

However, you should keep in mind that not all dust is an effect of a dusting attack. When exchanging or trading tokens, it is common to leave some small denomination of tokens after the trade is done. 

So if you find any crypto dust right after you traded, it’s probably a byproduct of the exchange rather than an attack. 

On the plus side, most exchanges have the option to convert this so-called dust. As it cannot be traded since exchanges have that minimum size requirement for trading, converting dust is the easiest way to get rid of small balances. 

Performing a Dusting attack

Dusters are a category of attackers. Dusters have been used to de-anonymize people with significant cryptocurrency holdings. Those with substantial assets might be targeted in a variety of ways, including through phishing scams and cyber-extortion. 

Users in high-risk locations who hold large crypto assets may be targeted directly or even have a family member kidnapped for ransom.

A dusting attack may also be carried out by a government agency, such as a tax or law enforcement department, in order to trace someone or some group to an address. They may, for example, target organizations dealing in prohibited goods, major criminal networks, money launderers, or tax evaders. 

Blockchain analytics firms also use a mass duster to analyze crypto dust for academic research or have contracts with government agencies. Importantly, the person or group that performs the dusting attack and the individual or group that analyzes the findings should not be the same. 

Anyone with the skills, tools, and time can analyze crypto dust after an assault because it’s on the blockchain. A criminal group might research a government’s dusting, as well as a blockchain analytics firm.

Counteracting a dusting attack

The use of a hierarchical-deterministic (HD) wallet, which generates new addresses each time you conduct a transaction, makes it more difficult to track you. Some wallets display dust UTXOs (unspent transaction outputs), which you can flag as “do not spend.”

You may also use your crypto cash to make purchases. Because they’re so small, little amounts are placed in your wallet and remain there unless you spend them. Others wallets only connect to the Tor Network or a VPN when they go online.

As a result, the only way to win is not to spend the money at all. This may be prevented by turning dust into cryptocurrency or marking these assets and avoiding your wallet from using them.

Because the latter option is more technical, the simplest approach to do it is by conversion. The functionality is available on most popular exchanges such as FTX, Binance, and Gemini, so there’s no need to worry.

Is a dusting attack always an attack?

Because of this, not all dust assaults are defined as “attacks.” The widespread dissemination of dust has also been utilized to advertise to cryptocurrency consumers, particularly through the distribution of crypto dust messages such as those included in an email blast.

Mass dustings are sometimes used as stress tests, in which a large quantity of crypto dust is sent in quick succession to evaluate a network’s throughput or bandwidth. Dustings are sometimes employed as a means to clog and slow down a network. 

Sending large batches of useless transactions that clog and slow it down is referred to as spamming the network. Whatever the goal, mass dustings may be examined for various purposes, both good and bad.

Dusting can also be utilized as a defensive measure. Let’s suppose that a big criminal organization gets word that the authorities are on their way to them. The cybercriminals may dust numerous random wallets in order to hide the tainted funds.

Traceable addresses have been the subject of much debate in duster attacks. As blockchain analytics advance, new countermeasures become available. Many governments and businesses see their technology as shielded by trade secrets and keep it under wraps.

Despite the numerous safeguards available, can dusting be tracked? We don’t know yet.

How concerning are dusting attacks?

Dusting attacks may look severe, but they are not. The procedure boils down to sending tiny amounts of cryptocurrency to several exchanges in order to follow transactions and identify which addresses are linked.

There is no need to be concerned if you are one of the many individuals who fall prey to a dusting assault and fail to convert it. Dusting assaults are not particularly exciting because they boil down to social engineering in the end.

Rather than getting caught up in a technical hack that may result in your assets being stolen straight away, dusting assaults make you the author of your own fate.

There are numerous other security problems that exist (like crypto-jacking, ransomware, and others), and a person on the internet knowing your name is the most minor of them all! You’re good to go as long as you don’t believe that the other individual has any sort of authority.

Dust assaults are more of an annoyance than a genuine worry unless you’re a whale (a person with significant assets) or live in a neighborhood where personal safety, security, or political upheaval is prevalent.

There’s no way to take control of your money if you have crypto dust in your wallet. Dusting has become much less common, thanks to the new privacy measures introduced by new wallets and exchanges.

If you notice some tiny, random payments in your wallet, you’re not imagining things, it’s just a little  “dust.”