Blockchain technology must be secure due to its cryptographic nature; But this field is facing some security problems and cyber attacks. One of the problems of blockchain and digital currencies is dusting attack. This attack is a type of aggressive strategy and is done in order to discover the identity of the owners of digital currency wallets. Malicious actors do not necessarily carry out a dusting attack with malicious intent; But sometimes the law forces also carry out this attack with the aim of discovering the owners of criminals’ wallets.
In any case, this type of attack is something that digital currency activists should be aware of and how to deal with it. Therefore, in this article we want to examine the dusting attack and how to do it. The motivations for carrying out this attack and the ways to deal with it are among the topics that we will discuss in this article. If you want to get acquainted with one of the dangers that threaten your wallet in the world of digital currencies, we suggest you watch the video below and stay with us until the end of this article.
What is the concept of Dust in digital currency?
The term “dust” in the world of digital currencies refers to very small amounts of digital currencies that are not visible to users. Take Bitcoin, for example. Each Bitcoin unit is divided into 100 million parts called Satoshi. From one satoshi to several hundred satoshi, which is not worth much in terms of money, it is counted as dast.
In digital currency exchanges, dust is a very small amount of digital currency that remains in the user’s wallet after a transaction. Dust inventory is not negotiable; That is, it is so little that it cannot be transferred. Needless to say, some exchanges have a mechanism to convert Dust to their native digital currency.
Regarding Bitcoin, there is no specific definition of dust; Because each node (client) has a different threshold for it. The Bitcoin Core software definition of dust is the output of a transaction whose amount is less than the transaction fee. This makes it impossible to process that transaction.
Technically, the range has It is calculated based on the input and output value. This range in Bitcoin is 546 satoshis for normal Bitcoin blockchain transactions and 294 satoshis for SegWit-based transactions. This means that transactions less than or equal to 546 satoshis are considered spam and are likely to be rejected by nodes.
What is Dusting Attack?
A dusting attack is a malicious act that aims to reveal the owner’s information of a digital currency wallet. In this attack, a bunch of very small transactions are sent to a large number of private wallets. An attacker can trace the activity of the wallet using the transaction data to the point where he can identify the owner.
An example of such an attack happened in the summer of 2019 (1398), when hundreds of thousands of dust transactions were sent to Litecoin wallets; But fortunately, the source of this attack was identified before any damage. After the attack, the attackers claimed that their goal was to promote the mining pool among the Litecoin community. Although no users were harmed in this attack, this event drew the attention of the cryptocurrency community to the fact that such attacks can be carried out easily; Especially since it is possible to do them in any public blockchain.
How is the dusting attack done?
To perform a dusting attack, attackers send a very small amount of a digital currency to a multitude of different addresses. In fact, the logic of the attackers in these attacks is based on the assumption that most users and owners of digital currency wallets do not notice the entry of dust into their wallets and spend it.
The main abuse of the perpetrators of dusting attacks starts here. After dusting, they monitor the target addresses to see which wallets the sent amounts are transferred to. One important sign for attackers to find their main targets is that multiple addresses belong to the same wallet.
If the user forwards the file sent to their address, they provide the first clue to the attackers. They track these files to see which wallet each address belongs to. After identifying the wallets, attackers use different methods to discover the identity of the wallet owner.
Who is doing the dusting attack?
There are different people and groups who carry out dusting attacks. Criminals use these attacks to discover the identity of those who have large amounts of digital currency. Abusing these people is done in different ways; Including phishing scams and cyber extortion. Users who have a lot of digital currencies face a lot of risk. These people may even be subjected to coercion and physical harm, or criminals may kidnap their family members and demand a ransom in the form of digital currencies.
Another group that uses dusting attacks are government agencies such as tax offices or law enforcement agencies that want to identify specific people in this way. Law enforcement agencies may use dusting attacks to target mafia groups, traffickers, large criminal networks, money launderers, or even people who commit tax evasion. Sometimes, blockchain analysis companies do dusting as contractors of government institutions.
The important point is that the person or group that executes the dusting attack is not necessarily the same as the person or group that analyzes its results. Since the dusting attack is implemented on the blockchain platform and the blockchain is a completely public network, anyone who has the skills, tools and time to analyze the result of this attack can do it.
The mass release of dust is also used for advertising in the digital currency community. In this method, a message is usually included in the corresponding dust transaction, similar to sending an email. You must have heard that the genesis block of Bitcoin, the first block mined in the Bitcoin blockchain, contained a message with the content of an English newspaper headline. At Advertising dusting A similar method is also used.
Another application of dusting is to test network throughput. For this, a mass of digital currency dust is distributed among the network addresses in a short time to measure the capacity or bandwidth of the network. Also, they use dusting to spam the network, which is considered a malicious act. Spammers send large packets of low-value transactions to clog the network; But whatever is the purpose of dusting, its analysis can be done independently of it and with a positive or destructive purpose.
Dusting can also be used defensively. Suppose a large criminal organization becomes aware that government agents have tracked them down and are approaching and identifying them. In such a situation, the criminal organization may use a dusting attack to spread its money around to mislead the agents.
There is much debate about how traceable cryptocurrency addresses are in dusting attacks. At the same time as blockchain analysis knowledge grows, countermeasures become better and newer. Additionally, many governments and companies keep their technology proprietary and protected. In the meantime, the question arises whether, despite all these precautions, it is still possible to track you through dusting? The answer to this question is not definitively known.
What are the ways to deal with dusting attack?
The easiest way to protect your wallet from a dusting attack is to not spend the transferred dust at all; That is, once the dust is transferred to your wallet, do not use it in any transaction. Of course, this requires that you know about the transfer of dust to your wallet; But also pay attention to the fact that most users will not notice the transfer at all due to the very small amount of data.
Another way is to use HD wallets. HD stands for Hierarchical-Deterministic. These wallets generate a new address or public key for each transaction. This makes it impossible to track you by changing your address, even if you transfer the deposited data to your wallet.
Also, new and updated wallets are usually equipped with a layer of protection against these attacks. These wallets mark fraudulent transactions sent by malicious agents as suspicious transactions. Some of these wallets even have the ability to block dust. When you enable this option, your wallet will not use the transferred data in future transactions.
Another way to deal with dusting attacks is to use VPN or proxy networks. This makes it impossible for anyone to trace your identity easily. At the same time, some exchanges have the possibility of converting the dust in the account to their native token, and users can eliminate red dust by doing this.
All areas related to finance face the risk of fraud and abuse by financially motivated criminals. The digital currency industry, as a part of this field, is not exempt from such a risk. Criminal activities are carried out in each part of the financial world with their own special methods and tools. One of the fraud methods in the world of digital currencies is dusting attack.
In this article, we examined this attack and talked about data, which is a central concept in this type of attacks, and how the attackers use it to bait the victims. Also, we explained how dusting attacks are carried out and said that dusting attacks can have both criminal motives and can be used by legal entities to identify criminals or law breakers.
In another part of the article, we mentioned ways to avoid falling into the trap of dusting attackers. The world of digital currencies has many and unique opportunities to generate income and increase profits; But at the same time, it is also a wide platform for malicious actors. Therefore, it is better for all those who enter this new world to familiarize themselves with the dangers ahead and how to deal with them.