Crypto dust is not inherently dangerous, but it can be an avenue for hackers to exploit. They can use these tiny amounts of cryptocurrency to uncover your identity and make you the target of phishing scams, cyber extortion and online harassment.
This article explains how crypto dust is made and four simple ways to get rid of dust attacks.
What Is Crypto Dust?
Crypto dust is a tiny amount of any cryptocurrency below the amount required to trade the coin or token. It's typically so small that you won't notice it in your wallet. Crypto dust is generally harmless, but when it's transferred to your wallet by a hacker or malicious attacker, it threatens your fund's safety.
How is Crypto Dust Made?
Suppose you have 0.3371145 BTC and want to pay 0.3371 to another wallet at a current transaction fee of 0.00001 BTC. You'll have 0.0000045 BTC left in your wallet. Since this amount is lower than the current transaction fee, it classifies as crypto dust.
How is Crypto Dust Transferred?
Hackers can send crypto dust to several crypto wallets. This is called a "dusting attack". After sending these tiny amounts of crypto to multiple addresses, they try to track them to uncover the wallet owners' identities for hacking purposes.
How Does a Dusting Attack Work?
Because crypto dust is such a tiny amount of cryptocurrency, it's easy for it to slip under a user's radar. Hackers know this and exploit it by sending dust to as many wallets as possible. This way, they can monitor users' transactions on their wallet addresses and link them to other addresses in the same wallet.
A dusting attack occurs when the user unknowingly transfers the crypto dust sent by the hacker to another address. The hacker wants you to add the dust to other funds in your wallet and send it out. This will open a pathway for them to discover your identity by tracking your address so they can hit you with phishing emails, cyber extortion and other scam attempts.
How to Get Rid of Crypto Dust
Here are a couple of ways to get rid of crypto dust from your wallet:
- You can add more crypto to your wallet, so the crypto dust is enough to be converted to another token, then send it to your local bank account. Or, if your crypto wallet service supports converting low amounts of BTC to other tokens like USDT, do that. For example, if you have 0.0000045 BTC in your Obiex wallet and convert it at the current exchange rate, you'll get 0.905 USDT. You can convert it to your local currency, like Naira and withdraw it to your bank account.
- You can use a hierarchical deterministic (HD) wallet that automatically creates a new address for every transaction. This makes it more challenging for malicious parties to track your transactions and uncover your identity.
- Some crypto exchanges allow users to convert their crypto dust to the exchange's native token every 24 hours.
- You can use a virtual private network (VPN) while making trades to tighten your security levels and increase transaction anonymity.
You can't clear your wallet to the last decimal when sending out crypto. Some "dust" would always be left. Don't worry about crypto dust unless you hold significant amounts of cryptocurrency or are a crypto whale.
Also, even if hackers were to conduct a dusting attack on your wallet successfully, they can't access your private key to wipe out your funds. However, they can subject you to phishing, cyber extortion and other scam attempts. If you fall prey to any of these attempts, then they can get your private key and hack your wallet.
To sum up, run periodic checks on your active crypto wallet addresses for any traces of dust and never give out your private keys and wallet login details.
Disclaimer: This article was written by the writer to provide guidance and understanding of cryptocurrency trading. It is not an exhaustive article and should not be taken as financial advice. Obiex will not be held liable for your investment decisions.