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Everything you need to know about Dusting Attacks

What are dusting attacks?

Dusting attacks are a very recent technique used by hackers in order to expose and identify the users of blockchain based cryptocurrency exchanges and transactions. Initially, dusting attacks only occurred with Bitcoin, but recently other currencies have been affected. Cryptocurrency exchanges are said to be on an open and decentralized network due to the characteristics of blockchain. Although any user can set up an e-wallet without providing information, all transactions can be publicly viewed and accessed. This mixture of publicity and anonymity causes cryptocurrency currency exchanges to be pseudonymous.

What is dust?

Dust is said to be a tiny and negligible amount of cryptocurrency coins. An example amount in the case of bitcoin can be 1 Satoshi (0.000000001 BTC).

How does it occur?

100s of dust will be sent into multiple accounts with hackers tracking the location of the funds in an attempt to locate any patterns in e-wallets. This would allow them to link a particular wallet with a user, whether it be a single person or a large corporation. Once their identity has been pinpointed, hackers may use this newfound information to conduct fishing attacks or make cyber threats.

An example of dusting attacks

On 9th August, Binance pointed out a large scale dusting attack taking place against Litecoin holders. The below image shows an example of one of the dusting attacks that took place on a Litecoin user.

A user from Bitkub posting in Bitcoin Thai Club pointing out his question to the community. From this photo, hackers would be able to pinpoint the identity of this wallet owner.

(The small amount of LTC ( 0.00000465LTC = 0.013 Baht) is a real life example of ‘dust’)

How can I prevent myself from dusting attacks?

Exchange User

Exchanges, such as Bitkub.com, have multiple and combined wallets of large numbers of users, it’s more difficult for hackers to identify who is who. There is therefore less to worry about however one must still not publish or post any private and sensitive information publicly.

Non Exchange User

Non exchange users who create their own wallet have a higher risk of getting their identity exposed because all transactions are coming in and out through 1 wallet address. Due to the fact that hackers need to analyse multiple wallets and fund locations, one should not move the dust funds that they receive. Also creating new bitcoin addresses for each transaction would increase the user’s privacy and security. Although blockchain and cryptocurrency is at the forefront of digital security it is essential that users maintain a firm handle on the location and distribution of their personal information.

Summary

Dusting is a way of exposing an exchange users identity

Dust, which is a very small amount of cryptocurrency, is sent to multiple accounts

If tracked and a pattern is found, a wallet or transaction owners identity can be revealed

This can result in fishing attacks or extortion.

To prevent these attacks ensure that a new address is created for each transaction