What is a dust attack?

Dust attacks refer to a new type of malicious attack in which hackers and scammers attempt to destroy the anonymity of bitcoin and cryptocurrency users by sending tiny amounts of tokens to users' private wallets. Many Bitcoin insiders believe that their anonymity is well protected and hackers cannot infiltrate their transactions, but this is not the case.

Dust definition

In the world of cryptocurrencies, "dust" is tiny amounts of money or tokens that people can usually ignore. Take bitcoin as an example. The smallest unit of bitcoin is 1 satoshi (that is, 0.00000001 bitcoin). Usually, we regard the amount less than a few hundred satoshis as dust.

In other words, dust is a small fraction of transactions or amounts that are usually not worth trading because their transaction fees are often higher than they are worth. And exchanges usually refer to those very small amounts of tokens that are "stuck" and cannot be traded as dust.

Most people don't notice the dust in their wallets, and rarely care where it comes from. In the past, you can completely ignore the dust in your wallet, but now, with the emergence of dust attacks, you need to be vigilant.

Dust attack

Scammers have recently realized that Bitcoin users don't care much about the tiny amounts that appear in their wallets, so they started sending small amounts of satoshis to wallet addresses, thereby "dusting" those addresses. The scammers then began to trace the funds and all transactions in those wallets that had been dusted, then connected these addresses, and finally determined the companies or individuals that these wallet addresses belonged to. Later this understanding was used in phishing attacks or threats like "I know who you are, pay me or I'll reveal your identity." The dusting attack was initially carried out against Bitcoin, but has since slowly infected cryptocurrencies on other popular blockchains as well.

In October 2018, the developers of the Bitcoin wallet Bamourai issued an announcement that their clients had been hit by a dusting attack. The company then posted a tweet reminding their customers and explaining how they can protect themselves. In order to protect customers from dust attacks, the wallet now provides customers with real-time alerts on dust tracking, as well as a function called "do not spend", which will allow customers to flag those funds that are suspicious, so as to avoid them in the dust. Use them in future transactions.

If the dust funds are not moved, trackers cannot establish a connection with them, and thus cannot complete the "de-anonymization" of the wallet or address owner. The Samourai wallet is currently capable of automatically alerting transactions below 546 satoshis, which also provides protection to a certain extent. And the software will also adjust the minimum alarm limit according to market changes.

Bitcoin's vanity

Since Bitcoin is open source and decentralized, anyone can create a wallet and join the network without providing any personal information. Although all Bitcoin transactions are publicly visible, it is never easy to find the identity behind an address or transaction, which is why Bitcoin is somewhat private (but also not completely private).

P2P transaction is a transaction method established between two parties without any intermediary, and this kind of transaction may maintain better anonymity. For Bitcoin users, perhaps the best way to protect privacy is to use a single wallet address only once.

However, most cryptocurrency pundits and traders use third-party exchanges and end up linking their private wallets with their exchange wallets, which naturally links their personal information . Therefore, if you want to trade cryptocurrencies, it is extremely important to choose a reliable and safe exchange.

So keep in mind that Bitcoin is not a completely anonymous cryptocurrency, as most people think. In addition to the recent dust attacks, many companies, research centers, and government agencies are also conducting blockchain analysis to remove the anonymity of the blockchain.

Other Privacy and Security Concerns

While cracking the Bitcoin blockchain is nearly impossible, wallets are the weak link in the entire encryption chain. Since users are reluctant to enter their personal information when creating a wallet, when hackers steal their tokens, they cannot prove that it was a theft, and even if they can prove that the tokens belong to them, then The end result was to no avail.

In fact, for victims of bitcoin theft cases, it is futile to try to track down the stolen bitcoins. When you hold bitcoins in your private wallet (accessible only to you), you act as your own banking institution, and if your private keys are lost or coins are stolen from your wallet, only you are responsible.

The value of privacy is growing every day. Whether it is those who want to hide information or ordinary people need privacy. And even more so for cryptocurrency traders and investors.

In addition to dusting and other deanonymization attacks, you also need to beware of other rapidly emerging security threats in the encryption field, such as Cryptojacking, ransomware, and phishing attacks.