A small amount of crypto tokens is left over when you trade or make a transaction in crypto. Most users will not notice it as it is a small amount. For example, a Satoshi is the smallest unit of a Bitcoin, one Satoshi is 0.00000001 BTC. Crypto dust is usually a few hundred satoshis worth of BTC.
There is no formal definition of crypto dust, but any amount less than the minimum transaction fee is known as crypto dust. This low amount also means that sending that amount of BTC is more expensive than the value of the crypto dust. This value changes with demand on the network and the token price.
So how does this crypto dust get created? And what is a dusting attack?
How does crypto dust get created?
For example, a user has 0.5603617 BTC in their wallet. The user decides to send 0.5635, the current transaction fee is 0.00001 BTC. The amount left over in the user’s wallet will be 0.0000017 BTC. This amount will be considered crypto dust since it is less than the current transaction fee.
Crypto dust can also be hacked from other digital wallets, known as dusting attacks. Hackers send small amounts of crypto to many wallets. They then track these cryptos and try to break the privacy of these wallets.
Is crypto dust dangerous?
Crypto dust is not usually dangerous. It cannot be eliminated as it is a byproduct of crypto transactions. Crypto dust will always exist, users cannot always match the amount for a crypto transaction with the amount left in their wallet.
Users have nothing to worry about unless they think it is essential for their identity to be private or they hold large amounts of crypto in their wallets. There is no loss of funds in your account if you have a dust attack. Hackers or criminals cannot get your private key using this attack and will not be able to hijack your account.
How does a crypto dust attack work?
A crypto dust attack depends on users not paying attention to the smallest number of tokens in their wallet. Users will notice an increase or decrease of at least 0.1 BTC as it is worth thousands of dollars. However, users do not usually pay attention to a few satoshis in their wallets.
Hackers use this negligence by sending small amounts of crypto to many different wallets. Hackers will then use modern tracking methods to work out which addresses are part of the same wallet. This method may lead to them finding out the personal details and identities of users.
This process is most of the attack, and the next part is to try to extract payments from users. Hackers do this through elaborate extortion or phishing scams.
What is the dust limit?
The minimum number of tokens a user needs to have to use a blockchain is known as a dust limit. You still own crypto tokens, even if they are a few satoshis, but you cannot transfer or use them.
The dust limit depends on market conditions such as token prices and transaction fees. In practice, this makes the system unnecessarily complicated. Most wallets set the dust limit to 546 satoshis, about 10 cents to avoid complications.
How do I stop crypto dusting?
There are many ways to remove crypto dust from your wallet.
- Many crypto exchanges allow users to trade their crypto dust into their native tokens. This dust is a small amount, but if you are a regular trader, it adds up over time.
- Defi wallets that create a new address for each transaction are useful against such attacks. These wallets make it harder for attackers to track users on the blockchain.
- Lastly, users can utilize VPNs to increase online security and prevent lapses in anonymity.
Should we be worried about crypto dust?
Users do not need to worry about crypto dusting attacks. Crypto dusting is not an easy process to execute. It requires law enforcement or trained teams to work on its tracking. This feature makes it unlikely for users to be the victims of a successful crypto dust attack.
Users need to ensure their safety online. The only way users can lose their money through dusting is if they are a victim of a phishing scam. Users should not click on unfamiliar links and check the senders of suspicious emails.
If you are a highly privacy-conscious user or hold large crypto holdings, follow the steps mentioned in this article to get rid of crypto dust regularly and make sure you cannot be tracked on the network.
You can learn more about the latest events in crypto on ZebPay blogs.
Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Each investor must do his/her own research or seek independent advice if necessary before initiating any transactions in crypto products and NFTs. The views, thoughts, and opinions expressed in the article belong solely to the author, and not to ZebPay or the author’s employer or other groups or individuals. ZebPay shall not be held liable for any acts or omissions, or losses incurred by the investors. ZebPay has not received any compensation in cash or kind for the above article and the article is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.
