The moment you talk about technology, there will always be something that you need to be extra careful about, attacks, especially when it involves personal data or value. Same goes to the blockchain technology, or specifically cryptocurrency, also known as a digital asset.
Malicious activity is everywhere but it is severe when it comes to virtual process over a network as it is easier to hack than to physically get involved. When it comes to cryptocurrency that is decentralized and has a high value, it is more prone to malware attacks.
As the value of cryptocurrency has been proven to be increasing day by day, it makes it more tempting for hackers and had been various hacks occurred resulting in billions of losses within the community.
A dusting attack maybe something that you have not heard before as it actually refers to a relatively new kind of malicious activity where hackers and scammers try and break the privacy of Bitcoin and cryptocurrency users by sending tiny amounts of coins to their personal wallets.
Dust in term of cryptocurrency means an insignificant amount of coins or tokens that the users tend to overlook. So, the attack happens as the culprit send their potential victims a tiny amount of coins onto the wallets to eventually steal your anonymity.
Being a decentralized and transparent network, bitcoin and other cryptocurrencies that run on a public and traceable blockchain are the targets for this attack. Although the transactions are transparent, the identity of the sender nor receiver remains anonymous.
Despite that, we need to understand that, if an address can ever be assigned to a specific person, all actions of this person can be tracked without any problem. Therefore, after sending the tiny amount of coins to multiple accounts, the attackers do the math to identify which address belongs to which wallet.
To put it in simple words, it is like how we purchase something and get the balance which is at times very minimal. Since we do the transaction with physical currency, we get the balance immediately, whereas when it comes to cryptocurrency, there is something called the Unspent Transaction Output (UTXO) which means, when a bitcoin transaction takes place, there are two UTXOs created: one that is the actual coins sent to the recipient, and one that is the change output, which goes back to the sender’s wallet.
So, the tiny amount sent by the attackers is usually mistaken for UTXO and left unnoticed. Since UTXOs are not on one address but on several addresses, which are all managed by a wallet, each address has different UTXOs and from the outside, nobody can tell that the addresses belong to each other. On that account, the ultimate goal of the dusting attack is to find out exactly that.
Seeing that a cryptocurrency owner needs to register themselves in an exchange to start trading their digital assets, it makes the attacker easily obtain the identity and, from this point on, the attacker can establish a direct connection between the previously anonymous wallet and the non-anonymised wallet.
Upon getting hold of the connection, attackers usually take the form of phishing attacks or blackmail to demand a ransom to stop them from revealing their identity, especially if the cryptocurrency owner has a large amount of digital assets.
Now, How To Stay Protected?
Normally, the chances of you getting attacked are tremendously high when you are not aware of the attack or how it works. Since you’ve read the necessary information of dusting attack above, you’re definitely safe now.
Above that, try to get yourself registered under exchanges that will enable users to mark unknown small deposits on their wallet in order to never use the UTXO for the upcoming transactions. Moreover, do not skip your transaction history and make sure you analyse or verify each of it even if it just 0.00000001 BTC (1 satoshi).
Lastly, do not be an [su_tooltip style=”dark” position=”top” shadow=”no” rounded=”yes” size=”default” title=”Obscurantist” content=”Someone who willfully withholds special knowledge from others” behavior=”hover” close=”no” class=””]obscurantist[/su_tooltip] and spread the article to your loved ones, those who owns cryptocurrency and others whom you feel need to be aware of this kind of attacks.
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