Dust settles on everything and is omnipresent, some might say. However, dust can settle on online content as well. In virtual reality, dust can be present in the form of tiny and unnoticeable amounts of money. Related to crypto-wallets, dusting attacks happen when small amounts of money are sent to random wallets to figure out the hidden identity of the owner.
What are Dust attacks?
This form of scam focuses on the crypto-wallets of multiple users and their addresses. Small amounts of cryptocurrency are sent to the targeted crypto-wallets. The crypto-wallet owner either does not notice this amount or assumes it to be a bonus from an airdrop or an extra reward from an exchange. This is initially done to steal private information instead of money.
This attack removes the anonymity of the user that the blockchain offers. The hackers track the movement of the dust in the targeted wallets. This activity of the crypto-wallet owner shows the hackers their personal information and multiple other addresses or wallets.
The hacker can now semi-identify the user, whose identification is no longer anonymous. Dust attacks are insignificant but cause multiple fraudulent scams and attacks.
Where do they happen?
With bitcoin being decentralised, anyone can set up a crypto-wallet. Since all transactions with cryptocurrency and NFTs get recorded on the blockchain, therefore cryptocurrencies like Bitcoin, Litecoin, and Dogecoin, among others, are pseudonymous, not anonymous. Dusting attacks are sneaky and can occur on any such currency.
Once a hacker traces the dust coins to an individual or company, it leaves them prone to various cyber-attacks. For example, currencies like Bitcoins, Binance coin, and Litecoins have been under dusting attacks. In 2018, Bitcoin experienced a dust attack, and then in 2019, Litecoins wallets were attacked. In 2020, blockchain and crypto-wallet-linked attacks increased and allowed hackers to steal around $3.78 billion.
Also Read: What is an NFT Airdrop?
Recognising dusting attacks
The blockchain’s public nature is both a boon and a curse. However, if you are aware of your transactions, you may avoid the curse. Read the following steps to be in charge of your wallet:
- Look for any amount of coins that are too small for you to use anywhere.
- Avoid the urge to click on any links that might attract your attention. They can be malicious and will usually appear after the dust coins get deposited in your wallet. This happened in 2020 with Binance coins.
- Hackers usually target their attacks on individuals or companies that own a large amount of cryptocurrency and funds. They can also be used for political means.
- If you have successfully recognised some dust, then you can use an HD wallet or hierarchical deterministic (HD) wallets for more security.
Precautions against dust attacks
Gas fees charged on every transaction can serve as a blessing for users. Since dust attacks involve sending small and barely noticeable coins across several wallets, gas fees are charged accordingly. With the rising cost of gas price, dust attacks are infrequent nowadays. However, one should always be on the lookout for an unrecognised amount of currency in their wallets.
You can keep in mind the following steps:
- If you have successfully perceived the dust coins in your crypto-wallet, then avoid moving them. By remaining stationary in your wallet, the hackers cannot trace their movement.
- You can inform the security team of the currency in which the dust coin exists.
- Regularly check the transaction history of your digital wallet for any unexplained coin surplus.
- Check if the platform you are using converts dust.
- Mark the amount you consider dust to avoid usage.
- Make sure you contact the wallet’s security team to avoid making mistakes related to the movement of the dust coins. They might help you move it to a secure wallet or burn the amount.
- Keep your funds separate from the dust coins. You can start using a TOR browser or VPN.
- Use HD wallets as mentioned in recognising dust attacks.
Also Read: What does it mean to burn an NFT?