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

Definition of dust

In the world of cryptocurrency, “dust” is an extremely small amount of currency 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). Generally, we regard quantities less than a few hundred satoshis as dust.

In other words, dust is a small portion of transactions or amounts that are usually not worth trading because their transaction fees are often higher than their value. Exchanges often 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 could 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 too much about the tiny amounts that appear in their wallets, so they have 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 the wallets that had been dusted, then connected these addresses, and finally determined the company or individual to which these wallet addresses belonged. This understanding was later used in phishing attacks or threats such as "I know who you are, pay me or I will reveal your identity." The dust 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 saying that their customers had been affected by a dust attack. The company then issued a tweet to alert their customers and explain ways they can protect themselves. To protect customers from dust attacks, the wallet now provides customers with real-time alerts on dust tracking and offers a feature called “Do Not Spend” that will allow customers to flag those funds that are suspicious and avoid spending money on them. Use them in future transactions.

If the dust funds are not moved, trackers cannot establish a connection with them, and the "de-anonymization" of the wallet or address owner cannot be completed. The Samourai wallet can currently automatically alert for transactions below 546 satoshis, which also provides protection to a certain extent. And the software will also adjust the minimum alarm limit based on market changes.

Bitcoin’s Fake Name

Because 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 private to some extent (but also Not entirely private).

P2P trading is a transaction method established between two parties without any intermediary, and this type 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 experts and traders use third-party exchanges and eventually connect their private wallets to their exchange wallets, which naturally connects their personal information. . Therefore, if you want to trade cryptocurrencies, it is especially important to choose an exchange that is reliable and secure.

So remember, 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 issues

While the Bitcoin blockchain is nearly impossible to hack, wallets are the weak link in the entire crypto chain. Since users are reluctant to enter their personal information when creating a wallet, when a hacker steals their tokens, they have no way to prove that it was a theft, and even if they can prove that the tokens belong to them, then The end result is still to no avail.

In reality, for victims of Bitcoin theft, trying to track down stolen Bitcoins is a futile exercise. When you hold Bitcoins in a private wallet (which only you can access), you act as your own banking institution and are solely responsible if your private keys are lost or coins are stolen from your wallet.

The value of privacy is growing every day. Privacy is needed by everyone, whether those who want to hide information or ordinary people. It is even more important for cryptocurrency traders and investors.

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