Did you know that when you make a cryptocurrency transaction or trade cryptos in general, you don’t always move the exact amount of cryptocurrency? Sometimes the tiniest digits don’t add up and are impossible to round; therefore, they remain in your wallet as a byproduct known as crypto dust. It is typically a negligible amount, less than a few dollars. It’s like having $10 in your wallet but in pennies. Theoretically, these coins make no difference, but there are some technicalities around the accumulation of dust in your crypto wallet that you should be aware of.
Crypto dust isn’t necessarily a bad thing. It’s just a negligible byproduct of using Bitcoin’s or the network of any other cryptocurrency. For example, if you trade all your Ethereum (ETH) for Litecoin (LTC), you can’t always get it converted exactly to eight decimal places, resulting in a tiny leftover.
Some exchanges allow you to convert the dust in your Bitcoin wallet for another currency, usually the native token of the exchange itself, as an incentive to obtain its token. This should not add up to much, but it is worth a click if your mindset is “little drops fill a bucket”. Still, if your exchange account doesn’t offer such a service, there is no need to panic because dust usually doesn’t add up more than a dollar.
What Is the Dust Limit?
The difference between dust and your other cryptocurrency holdings is the fact that dust is unusable or spendable. Dust limit is the minimum amount of a coin you need to have in order to use the network. It can vary within the networks and coins. Plus, you should keep in mind that the dust limit is set in terms of cryptocurrency, not fiat money. Thus its fiat money equivalent depends on the coin’s price at any time and the network you are using. For example, most wallets have a Bitcoin dust limit of 0.00000546 BTC or 546 satoshi. Any BTC under this amount is practically like a breadcrumb.
Is Crypto Dust Dangerous?
Crypto dust is not a threat all by itself. Any transaction you make most probably leaves some dust behind in the form of an unspent transaction output. But if you have reasons to be more careful with your privacy, for example, if you are a crypto whale or you live in a location that doesn’t protect you from security violations, you might want to take some measures.
Actually, dust can also be a good thing. Since cryptocurrency is essentially an encrypted piece of information, it is also possible to send messages through dusting.
Should You Be Worried About Getting Dusted?
Because it is possible to send messages through dusting, it is also possible to send a piece of advertisement with tiny amounts of cryptocurrency. This type of ad is generally an annoyance rather than a major problem, much like spam mails. However, if you possess large amounts of crypto assets, it is always better to be safe than sorry. Receiving dust connects the user to the account it was sent from and has the potential to deanonymise or unmask the user through block explorers.
If you value your privacy and anonymity, you might want to be cautious about dusting attacks. However, a dusting attack never gives the dusters the power to control your funds or private key. Even if you convert or spend the dust, thanks to the design of current digital wallets, the chances that a duster will succeed in linking your account are very low.
What Is a Dusting Attack?
Sometimes your account receives crypto dust without you doing anything. This is called a dusting attack or just dusting. A dusting attack typically aims to connect many addresses to a business or an individual at once.
Because the blockchain networks operate as public ledgers, once someone connects you to a transaction network, they can trace your transactions through the blockchain to some extent.
How Do Dusting Attacks Work?
By sending crumbles of cryptocurrency to lots of wallets in one transaction, malicious actors can trace the transactions that have been sent to and from the addresses and link them to the other ends of the transactions.
A dust attack can only be successful if you transfer the dust you have received out of your account. More precisely, the attacker needs you to add that dust to bigger chunks of funds in your cryptocurrency wallet and send it out. Once this happens, the attacker might be able to trace all the connected exchanges under your wallet and ultimately reveal your identity. Then you would face a series of targeted hacks, cyber extortion and phishing attacks. If you are using a DeFi wallet, you are clear from this risk because it is impossible to trace your ID from there. But if you use a centralised wallet, you might be susceptible to privacy breaches.
What’s more, to disguise dust attacks, hackers might send amounts much higher than the dust limit so that even if you are careful about the dust entering your wallet, you might overlook the higher amounts, thus disclosing your sensitive information.
Dusting is an old trick in the scammers’ book. There have been countless dusting attacks since the invention of cryptocurrencies. Let’s take a look at the most notorious ones.
The Binance Dust Attack
In October 2020, hackers sent a tiny amount of BNB to tens of thousands of wallet addresses on the Binance Chain network. Like a spam email, the dust coins had a link that offered users 50 free BNB. As you might have guessed, the link was fake, and the attack was aimed to reveal users’ information.
Samourai Wallet Dust Attack
Two years before the Binance Chain dust attack, in October 2018, Samourai wallet users were subject to a dust attack as well. The developers quickly identified the attack and warned its users through Twitter. Still, some users fell prey and put their privacy at risk.
How to Get Rid of Cryptocurrency Dust
Fortunately, you can follow a few strategies to get rid of crypto dust safely. Some of these strategies depend on your wallet service and the features it provides. If your wallet doesn’t have such a feature, there is no need to worry.
You can also use your exchange’s dust conversion tool if available. For example, Binance users are pretty happy to convert their dust just by clicking on Convert Small Balance to BNB on their Fiat and Spot Wallets. Today, most of the well-known exchanges have similar tools that are quite easy to find.
Finally, you can use a hierarchical deterministic (HD) wallet that automatically generates a new address for every transaction. If you think your privacy is at risk, you can use a virtual private network (VPN) when making a transaction to increase your security.
A Few Words Before You Go…
If you discover that your wallet has received some crypto dust out of the blue, there is no need to panic. Crypto dust is more likely to be used for advertisement purposes, like being handed a brochure that doesn’t have any value to you. It’s annoying, but there is no need to be alarmed. The only thing you can do to avoid potential dust attacks is to increase the security of your crypto wallet.