What IS a dust attack? how can Bitcoin ATMs help?

WHAT IS a dust attack?

Dust attacks are attempts to deanonymize your address. This is done by sending a small amount of resource to your address in the expectation that you will use them and thus discover your data. A dust attack does not give the attacker access to your funds, but having your data, they can blackmail you by email, send personalized scam, or prepare a phishing attack. Today you will learn more about dust attacks.

What is dust?

In crypto language, the term dust or dust refers to a very small amount of coins or tokens. Taking bitcoin as an example, the smallest unit of BTC is 1 satoshi (0.0000001 BTC), so dust can be equal to several hundred satoshi.

It used to be used for unusable, very small amounts left over from transactions. Now dust is also being talked about in the context of new "dust" attacks.

What is a dust attack?

A dusting attack is a new type of malicious activity performed by fraudsters who send small amounts of coins or tokens (dust) to thousands and sometimes even hundreds of thousands of addresses on the network. There are various reasons for these attacks.

The main goal of these attacks is to track wallet transaction data sufficiently to de-anonymize the wallet owner and launch a targeted phishing attack on the victim to gain the user's crypto.

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Phishing attack as a consequence of dust transactions

Another strategy, often confused with dusting attacks, is to send a malicious link contained in a memo tag along with a dust transaction. This is actually a phishing attack with a dust payment and should not be confused with a dust attack.

This strategy is common for coins that support the tag function, for example, Stellar (XLM) and XRP (XRP). The message contained in the memo tag may look like "invitation from airdrop xlmfree.org". 

A user who once clicked on a link may have been scammed into sending their resources to an unknown address or sharing their 24-word recovery phrase. It is not advisable to interact in any way with links contained in memo tags due to the security of funds.

How do scammers know my wallet address? 

Since the transaction information on most blockchains is public and available in all blockchain explorers, it is not difficult for fraudsters to see transactions on the network. While they can still see the various addresses and amounts of coins sent, they have no information about the identity of the address owners.

Should I be concerned about receiving dust transactions?

No, you don't have to worry about dust attack if you are already aware of what it consists of. The dust (small amount of crypto) resources in your wallet do not give anyone control over your funds. If you experience a dust attack, just ignore it and try not to interact with the "dust." 

For coins such as Bitcoin and BTC, you can use Ledger Live's coin controls to avoid sending those small amounts of funds you received in an attack. Another good practice is to use different receiving addresses for your crypto each time.

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For phishing attacks with dust payments that include a message in the memo tag, just ignore them and don't use the links they promise.

While dust trading on public blockchains is unavoidable, you can stay safe by approaching trading with caution and focus.

Counter attack dust

A strange game, the only winning move is not to play.

- WarGames

The same strategy, described in the quote above, is worth adopting during dusting attacks. This is because the attacker assumes that you will use his "dust", i.e. as a result of operations on it, you will link it to another wallet belonging to you.

Therefore, the only winning move is not to use these assets at all. You can convert dust into another cryptocurrency or mark these assets to remember not to use them. Since the latter option is more technical in nature, the easiest way to achieve this is through a simple conversion. The most popular exchanges, such as FTX, Binance and Gemini, offer this feature, so you don't have to stress. 

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Use Bitcoin ATM to defend against dust attack

However, the best way to counter dust attacks is to withdraw funds in Bitcoin ATM into cash. This way, you will never link those funds to any wallet again. Take into account, however, that it is not worth Bitcoin ATM to withdraw less than approx. 200 PLN. Therefore, you should withdraw these dust funds together with your other funds. If you want to combine them with other wallets, make sure they are one-time wallets that will not enable the scammer to track you down.

Summary: How dangerous are dust attacks?

As you can see, dust attacks are not that serious. The process boils down to sending small amounts of cryptocurrency en masse to various exchanges in order to track transactions and detect which addresses are linked.

Even in the event that you fall victim to a dusting attack and fail to convert, you need not worry. Dusting attacks are not particularly dangerous because they boil down to social engineering.

Instead of experiencing a technical exploit in which your assets can be directly stolen, in the case of dusting attacks, the scammer expects you to perform manual actions that reveal your anonymity. Which means you can't be affected by them, as long as you're aware of what's going on.

Has someone linked all your transactions through the dust and discovered your true identity by leaking your data? Is that same person blackmailing you by sending you a message with your name on it, suggesting that he or she is capable of something much more malicious? Our other article on Bitcoin-related blackmail comes to mind.

Don't worry! There are far worse security threats (such as cryptojacking, ransomware, etc.), and a person on the Internet knowing your name is the least of all!