Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The crypto market ends the week at a total market capitalization of $2,17 trillion. Bitcoin continues to trade at around $62,300. Ethereum experiences no changes and stagnates at around $2,400. XRP is down by 2%, Solana by 1%, and Dogecoin by 3%. Almost all altcoins are trading in the red, with very few exceptions. The DeFi sector decreased the total value of protocols (TVL) to around…
Crypto Dust: What it is Dusting Attack and How to Protect Yourself
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A dusting attack is a new cryptocurrency scamming technique whereby “dust” (tiny fractions of a cryptocurrency) is sent to many wallet addresses to expose the person or company behind them. Dust attacks are a tactic used by criminals and law enforcement agencies. In the Bitcoin world, the term “dust” describes a small portion of bitcoin, often referred to as a satoshi.
A large amount of dust appeared on the network to further trace the transaction, targeting many addresses. The attacker hopes that the small amount of money will be mixed up with the unused transaction proceeds (UTXO) to be tracked when spent as input for new transactions.
Dusting Attack
Although criminals initially carried out the dust attack on bitcoin, it also occurs in many other cryptocurrencies executed on the public blockchain and is traceable. Furthermore, since consumers pay little attention to the small amounts of cryptocurrency sent to their digital wallets, fraudsters send multiple satoshis to many addresses.
Fraudsters can then analyze these portfolios’ transactions when the owners remove the “dust” sent to them. The process involves associating these so-called dusty addresses with their respective owners, thereby revealing the person or company’s identity.
Attackers can use this knowledge to launch the next phishing attack or blackmail the owner into cyber extortion. Apart from bad actors, research laboratories, government agencies, and other companies are also involved in this dust attack to disable blockchain networks.
In early October 2018, several users of the Samourai Bitcoin wallet experienced dust attacks. The company responded quickly by notifying its users of the attack and implementing real-time dust-tracking alerts. However, in the second half of 2019, nearly 300,000 Litecoin (LTC) addresses were attacked by dust, 50 of which belonged to Binance users.
The costs associated with dust attacks are often higher than the amount of dust used. Even though the crypto dust from thousands of wallets may be insignificant, attackers still have to pay network fees to launch a dust attack. As bitcoin fees have increased, bitcoin dust attacks appear to be decreasing.
What is UTXO?
UTXO can be defined as a single transaction received from a specific address in your wallet but has not yet been issued. Every wallet address has at least one UTXO from the first transaction it receives. When multiple transactions are accepted at the same address, each transaction is called UTXO.
Take UTXO as banknotes with a specific value, and think of the wallet address as the compartment containing the banknote. When the portfolio creates a new outgoing transaction, several UTXOs from different addresses are combined to get the closest transaction value. Then, the excess amount is transferred to the new address for modification.
For example, in a portfolio with a UTXO address of 100 Bitcoin and another address with a smaller amount, a 100 Bitcoin UTXO address is usually never combined with another address in a single transaction. However, if the attacker applies a bit of dust and additional UTXO is added to the address, 100 bitcoins will be.
Then it is possible that when a user makes a transaction with another address, the transaction can also add UTXO powder with 100 Bitcoin addresses to the transaction. In this case, the attacker finds out that this address, specifically the 100 bitcoin addresses, belongs to the same person or entity’s same wallet.
Dusting Attack Mitigation
Since successful experience relies on a combined analysis of multiple addresses, it is essential not to remove any of these dusty tools. However, there are ways users can avoid waste, and a vital privacy strategy is to use a different address for each transaction.
When people view their balance on mobile wallets, they may not know their total wallet amount is their input and UTXO amount. It means your 2 BCH can be represented by a multiple of 1, 0.5, 0.25, and 0.25 to get a total. So if you don’t care about privacy, forget about dust and get on with your day.
Alternatively, you can never waste dust and only spend uncontaminated money upfront. Unfortunately, that means you may need to scrutinize the dust transactions, determine the address where the funds are, then leave them alone. Fortunately, some wallets allow you to view addresses with UTXO portions and analyze funds.
With a wallet like Electron Cash, users can see which addresses have money in them and leave dust alone. For wallets that do not display this information to end users, the seeds must be imported into a wallet that enables this function. Some wallets also allow you to add a randomly sent description or “flag” to the Satoshi faction so you can quickly identify the attack.
Unfortunately, not all wallets allow you to select UTXO manually. Therefore, users with this type of wallet need to import them to clients who reduce dust attacks. Besides, humans cannot stop dust attacks, as most blockchain networks are unlicensed.
Conclusion
Unless you are a whale or reside in an area where personal safety or political instability is a common concern, most investors view dust attacks as more of a nuisance than a real problem. This is because the crypto dust in your wallet gives no one control over your money, and the privacy measures implemented by new wallets and exchanges have significantly reduced the general fear of dust attacks.
When you see the little random transactions in your wallet and can’t imagine anything, it’s just a little dust. However, dust can compromise the privacy and safety of your coins.
Btc
Bitcoin
$62.547
price
price
0.84959%
price change
After all, users should be vigilant to identify additional amounts of cryptocurrency being sent to the wallet address in this manner, so take appropriate action to avoid tracking and losing your personal information through fraudsters.
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