What to do with crypto dust

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What is Bitcoin dust?

Basic knowledge & terminology

What Is a Dusting Attack?

Bitcoin dust attack is performed by sending $1 to any wallet you wanna sweep away it entire funds. A dust doesn’t requires a specific coin state,a dust is send to non-spendable funds as-well as confirmed or unconfirmed bitcoins.

What is Bitcoin dust?

after performing a dust it clears away every entities as well as it transactions made and the funds are fully spendable and can be transferred from one wallet to another.

What is the purpose of a dusting attack?

In the language of cryptocurrencies , the term dust refers to a tiny amount of coins or tokens – an amount that is so small that most users don’t even notice.

Has anyone got rich from Bitcoin?

Erick Fineman: When each  Bitcoin  was worth $12 in 2011, Erik Fineman borrowed $1000 from his grandmother and with the help of his brother at just the age of 11, he invested in bitcoin , at the end of 2013 when the value of  Bitcoin became  $1200, he made a fortune. … He took the Bitcoins

A dust attack is send to non-spendable funds as well as confirm and unconfirmed bitcoins.
A dust is not a hack nor a private-key but a direct attack on the funds which will be automatically transferred to your wallet.Dismiss alert

What Is a Dusting Attack?

When dust settles in your home, you wipe it up. But what about when unwanted dust makes its way into your bitcoin wallet? Well, cleaning it up may not be so simple.

In Bitcoin parlance, “dust” is the technical term given to trace amounts of bitcoin that are considered too small to send in a transaction because the transaction fee would exceed the amount sent. Typically, dust is no more than a few hundred satoshis (a microunit of measurement for bitcoin).

Because sending dust is expensive relative to the transaction size, normal bitcoin users have no reason to transact with dust. But that doesn’t mean other entities, like bad actors or blockchain researchers, don’t have a use for it.

Letting the dust settle

Entities conducting blockchain analytics may use dust to deanonymize users and their wallet addresses. The idea is to create enough deterministic links between the analysis firm’s wallets and the recipient addresses. Once these links are created, the firm can run analysis using the data it collects to trace IP addresses  to the recipient wallets. 

“When the dust is consolidated with the user’s other funds, it helps with chain analytics by making it easier to cluster addresses,” Sergej Kotliar, the CEO of Bitrefill, told CoinDesk. If users don’t consolidate the unspent transactions (UTXOs), then they don’t need to worry about their anonymity. However, most wallets automatically consolidate UTXOs when a user creates a transaction, so this can be tough to navigate around unless you are choosing which UTXOs to spend manually.

Dave Jevans, the CEO of blockchain analytics company CipherTrace, told CoinDesk that “hackers may use dusting as a strategy for identifying individuals who can then be phished or extorted.”

The threat of anonymity aside, consolidating these UTXOs would mean spending more in fees than the dust is worth. The resulting dilemma then becomes: leave the too-piddling-to-spend UTXOs to clutter the wallet or consolidate them and thus compromise privacy. (It’s not uncommon for users to have their wallets dusted more than once by the same entity, leading to significant clutter. Phil Geiger, the director of marketing at Unchained Capital, for instance, told CoinDesk he has “had addresses dusted repeatedly.”)

Some wallets, like Samourai and Bitcoin Core, let you freeze UTXOs, which would bar them from being consolidated in a new transaction. But Kotliar emphasized that most average users will not know how to navigate this feature.

Raising dust limits?

To mitigate the impact dust has on the network, Kotliar has suggested raising the dust limit as designated by the Bitcoin Core wallet. Currently, most wallets are designed to cap transactions at 546 sats (0.00000546 BTC, or roughly 7 cents). 

“Blocking these would be censorship, but maybe raising the dust limit makes sense,” Kotliar said, adding that his proposal “is a way to raise the topic and have other people weigh in on it.”

If this limit were raised, then it would be more expensive to execute a dusting attack. But, of course, this comes at the detriment of honest users spending small sums. If bitcoin were to go up in price dramatically, then the dust limit would have to be recalibrated so as to not price out smaller accounts from sending transactions.

The dust piles up

There’s no guarantee that raising the dust limit would clean this problem up for good.

“I’m not sure that raising the dust limit would prevent this,” Ergo, a pseudonymous analyst for OXT Research, told CoinDesk, though it would “certainly [be] a deterrent.”

Blockchain analysts, for example, may still be willing to stomach the premium to send dust if the limit is raised, especially if they have high-dollar contracts  with government agencies. 

Still, it may deter some bad actors from wasting block space on trivial transactions. Bitcoin’s blockchain keeps a record of every transaction ever executed on the network, and there’s only so much space per block to accommodate new transactions; dust, then, causes unnecessary bloat on Bitcoin’s transaction ledger because blockspace that may have been used to accommodate legitimate, larger transactions is instead devoted to transactions worth pennies.