Have you ever been looking at the digital assets you have in your wallet and noticed some new cryptocurrencies that you never bought and have little to no value? You might be a victim of a dusting attack (you shouldn't worry if you didn't perform any action on the tokens).
In the world of cryptocurrency, a dusting attack is a relatively new technique (which is generally malicious) that can lead to undermining the security of your wallet. In this article, we'll take a closer look at what a dusting attack is, how it works, and why bad actors might use them.
What is a Dusting Attack?
A dusting attack is a form of cryptocurrency technique that involves sending tiny amounts of coins (usually just a few satoshis) to addresses associated with a particular wallet or service. These payments are generally too small to be noticed or used for any legitimate purpose, but they can be used to track the movement of those coins as they're sent between addresses.
A dust coin, also known as a dusting attack coin, is a token sent to an address in order to track its movement or ownership. Dust coins typically have very low transaction fees and are usually worth less than one satoshi (0.00000001 BTC) or other types of cryptocurrency. The important thing is that the amount is so small that people would just leave it in their wallet, especially since the transaction fees would more often than not be higher than the value of the tokens dust tokens themselves.
Jan Happel, co-founder of blockchain data provider Glassnode, told Cointelegraph that "if a UTXO contains less balance than the minimum amount required to spend it (fee) that day, it becomes stuck/unspendable — this is what we technically define as dust.” UTXO stands for Unpent Transaction Output, ie. "the amount of digital currency someone has left remaining after executing a transaction."
How does a Dusting Attack Work?
In order for a dusting attack to work, the attacker must first have access to a large number of addresses associated with a particular wallet or service. They will then send very small payments (usually just a few satoshis) to each of those addresses. The goal is to infect as many addresses as possible so that they can be used to track the movement of funds within the ecosystem.
If you would like to check whether you have received such coins, you can head to the blockchain explorer of the blockchain you are currently using and type in your wallet address. Here are some of the blockchain explorers:
Once you type in your wallet address in the correct explorer, you will be able to see all the assets that you hold, including assets that are of very small value (ie. unsolicited cryptocurrencies and NFTS).
What is the Purpose of a Dusting Attack?
Dusting attacks can be used for a variety of purposes, which are at times quite nefarious.
- Unanonymizing and scamming: One of the most common objectives for someone who launches a dusting attack is to deanonymize a wallet address so that user data can be used to steal funds through various methods, such as phishing. Certain newly minted tokens which would require you to activate a smart contract on a particular website could also lead to your funds being drained (the smart contract could have some permissions set to also drain users’ funds).
- Detect Illegal activity: Government bodies or law enforcers can perform dusting attacks on wallets that have been noted as potentially performing illegal activities. This could potentially help them to identify the culprit and put an end to the malicious activities.
- Analytics: Some researchers or blockchain analytics firms purposefully perform dusting attacks in order to conduct research. Sometimes this research would be funded by governments.
- Coin Mixing: Coin mixing is a process whereby someone tries to make it more difficult to track the movement of cryptocurrency by sending it through multiple addresses. By dusting thousands or even millions of addresses, an attacker can create enough "noise" to make it very difficult to track the movements of specific coins. This makes it harder for law enforcement to track down illegal activity, and it also makes it more difficult for people to trace stolen funds back to their rightful owners.
- Marketing purposes: Dusting attacks are getting more creative; they are also being used for marketing purposes. Although it might not generally be considered as an instance a dusting attack, the methods used are very similar. For instance, if a new crypto project releases a token, it would send a very minimal value of tokens of its own project to random addresses. This would serve as a free marketing tool for the project so that random users are aware of it. This can also be done through NFTs, especially those with blockchains that have low transaction fees such as Polygon.
How to Prevent a Dusting Attack
Unfortunately, there aren’t many ways to prevent, avoid, or get rid of dusting attacks. The best thing to do once you think you have received dust coins or tokens is to let them be and not attempt to move them from where they are in the wallet.
Some also suggest using hierarchical-deterministic wallets (HD wallets). With these kinds of wallets, a new public key is generated each time you transact, making it extremely difficult to trace who the owner of the wallet is.
As you can see dusting attacks are a type of malicious activity that can have serious implications for the security of your coins, but they can also be used for marketing purposes. In this article, we've taken a look at what a dusting attack is, how it works, and why bad actors might use them. While dusting attacks are still relatively rare, they are becoming more prevalent as the cryptocurrency ecosystem continues to grow. As such, it's important to be aware of them and take steps to protect yourself against them.