Dust Attack, what it is, why it is dangerous and how to prevent falling to it

[UserU]

So I guess this can apply even on gambling and faucets?

Imagine faucet sites on FBC, then there's no way to find out if we've been dusted or not.

[fillippone]

Exactely, faucets are another way of doing so.
The point is Faucets are rarely properly KYC'd, so it's difficult to link them to an identity.

[naska21]

snip

Last moth my empty and never used BTC address published on forum to authenticate my account    has got  555 sat. Sure that was the dust attack but I wonder what for? who might have  interest in me?

[fillippone]

They shoot in the mass.
They are not targeting at you. Just shooting in the mass and hoping to fish something.

[figmentofmyass]

Bitcoin it is not an anonymous protocol, but a pseudonymous. If an exchange gives you a few satoshi and you consolidate those with your bitcoin stash, they are perfectly able to link your KYC'd addresses to the pseudonymous one. Same thing if they send dust to an empty address and if you send to a KYC'd address (or an address "touched" with a KYC'd one). This is what the sentence ion bold meant.

exactly my point.
they can not identify you by only using "dust attack" technique that you explained here. for example someone can have 2 addresses both not-linked to his identity. first one that is empty receives dust then he links it to the second one, there still is no way of linking these two to his identity. similarly the another person may have 2 addresses both linked to his identity, the empty one receives dust and he links it to the other one. no additional privacy was lost here.

all that says is that bitcoin is pseudonymous, which fillippone just stated. we already know that. all of bitcoin's privacy pitfalls require a link to real-life identity to be meaningful.

how about the case where one address gets dusted, then linked to a second address (or cluster of addresses) which is already linked to your identity?

[Velkro]

Maybe this dusting is more of a spam attack, it creates new unspent outputs that are more expensive to move than they are worth, so it can make people overpay fees

This is a lot more likely than theory of topic author.
I mean it have actual money reason to do that, and privacy concern? I didnt get it, and tried really hard of what topic author wrote.
Its too far fetched for me, privacy is not affected here.

[naska21]

They shoot in the mass.
They are not targeting at you. Just shooting in the mass and hoping to fish something.

Yeah, I know that but in my case by single trx they targeted around ten addresses  ,  all of them are  from bitcointalk and that surprised me.   

[fillippone]

Maybe this dusting is more of a spam attack, it creates new unspent outputs that are more expensive to move than they are worth, so it can make people overpay fees

This is a lot more likely than theory of topic author.
I mean it have actual money reason to do that, and privacy concern? I didnt get it, and tried really hard of what topic author wrote.
Its too far fetched for me, privacy is not affected here.

Doing this kind of research and sell it to the government, or the IRS, is a is a fantastic business opportunity to gain from this kind of attack.
Again this is not theory, but practice, done every day by chain analysis companies.
Your privacy is at risk, and privacy is one of those goods that are vastly underappreciated until it’s lost.

[bitbro678]

this bold part is misleading because nobody can "trace your identity" this way, specially not by using blockchain analysis alone. all they can do is linking the different addresses if they weren't linked before only when the user consolidates the inputs in one transaction. and an address is not revealing the identity of the user on its own.

Bitcoin it is not an anonymous protocol, but a pseudonymous. If an exchange gives you a few satoshi and you consolidate those with your bitcoin stash, they are perfectly able to link your KYC'd addresses to the pseudonymous one. Same thing if they send dust to an empty address and if you send to a KYC'd address (or an address "touched" with a KYC'd one). This is what the sentence ion bold meant.

exactly my point.
they can not identify you by only using "dust attack" technique that you explained here. for example someone can have 2 addresses both not-linked to his identity. first one that is empty receives dust then he links it to the second one, there still is no way of linking these two to his identity. similarly the another person may have 2 addresses both linked to his identity, the empty one receives dust and he links it to the other one. no additional privacy was lost here.

If someone wanted to identify you, I doubt if they would send dust to an empty address. Since everything is on the blockchain, they would send dust to addresses that have a fairly decent amount of crypto. If that address gets linked to another address that is linked to a person's identity, then they now know the person behind it. But then again, if you're really not bothered about privacy as such, a dust attack wouldn't affect you.

[Globb0]

SHUM  +1

[Kakmakr]

Why would you want to consolidate your "dust" transactions for a few Satoshi's? You would be burning more Satoshi's in miners fees to consolidate it, than gaining anything from it. They might have done this on LiteCoin, because the fees are lower than Bitcoin, but it will never work for Bitcoin, because the miners fees in Bitcoin is much higher.

Also, consolidating "dust" into a single Bitcoin address would simply be a stupid idea. I have several coin spread out over a bunch of addresses, because I do not want someone to trace all my coins back to me. <This includes addresses from Paper wallets, desktop wallets, hardware wallets, exchanges and web wallets.>

Proper coin management and the use of Mixer services will render this attack useless. 

[20kevin20]

I know this topic is old and has been revived yesterday by someone, but I just found it and I can relate to it. My XRP, LTC, BTC, BCH, ETH and DASH addresses have all received dust transactions from an unknown address. I've never done KYC anywhere, nor are my addresses linked to my real identity in any way. Is there anything I must do? Some of them MIGHT be empty, but I'm not entirely sure.

Now, after reading the last part of the thread posted by the OP, I have another theory: governments may be conducting this process of blockchain analyzing in order to find the identity of a person for money laundering and tax evasion purposes.

I'm using Ledger by the way.

[fillippone]

I know this topic is old and has been revived yesterday by someone, but I just found it and I can relate to it. My XRP, LTC, BTC, BCH, ETH and DASH addresses have all received dust transactions from an unknown address. I've never done KYC anywhere, nor are my addresses linked to my real identity in any way. Is there anything I must do? Some of them MIGHT be empty, but I'm not entirely sure.

Now, after reading the last part of the thread posted by the OP, I have another theory: governments may be conducting this process of blockchain analyzing in order to find the identity of a person for money laundering and tax evasion purposes.

I'm using Ledger by the way.

Many modern wallet (for bicoin for sure, I don't know anything about shitcoins) have a "do not spend" feature you can tag given UTXO with.
So tagging in this way your dust prevents you doing stupid things with that.

[hatshepsut93]

I know this topic is old and has been revived yesterday by someone, but I just found it and I can relate to it. My XRP, LTC, BTC, BCH, ETH and DASH addresses have all received dust transactions from an unknown address. I've never done KYC anywhere, nor are my addresses linked to my real identity in any way. Is there anything I must do? Some of them MIGHT be empty, but I'm not entirely sure.

Now, after reading the last part of the thread posted by the OP, I have another theory: governments may be conducting this process of blockchain analyzing in order to find the identity of a person for money laundering and tax evasion purposes.

I'm using Ledger by the way.

Can you analyze to what sort of addresses did you receive that dust? Was that the addresses that you used to withdraw from some exchanges? If so, can you tell from which exchanges? Or was it some other services? Or maybe addresses that were never used (but how it can even possibly happen?)? Maybe we can get some idea who is behind this dusting if we try to start tracking them.

[20kevin20]

Can you analyze to what sort of addresses did you receive that dust? Was that the addresses that you used to withdraw from some exchanges? If so, can you tell from which exchanges? Or was it some other services? Or maybe addresses that were never used (but how it can even possibly happen?)? Maybe we can get some idea who is behind this dusting if we try to start tracking them.

I'll try analizing them ASAP, although I will not share them due to privacy reasons.

They are not addresses that I used on exchanges. In fact, I do not remember using any of my addresses on exchanges and I believe I have not used them for services either. Will try tracking the dust addresses down but I don't know if I'll get to any results.

Many modern wallet (for bicoin for sure, I don't know anything about shitcoins) have a "do not spend" feature you can tag given UTXO with.
So tagging in this way your dust prevents you doing stupid things with that.

I will have to look into that, I've never seen this option on my Ledger though. Thanks for the suggestion, although I think I've even spent some of the UTXOs already..  

[fillippone]

Many modern wallet (for bicoin for sure, I don't know anything about shitcoins) have a "do not spend" feature you can tag given UTXO with.
So tagging in this way your dust prevents you doing stupid things with that.

I will have to look into that, I've never seen this option on my Ledger though. Thanks for the suggestion, although I think I've even spent some of the UTXOs already..  

IF you use your Ledger togheter with Electrum you can use the "freeze Coin" option:

What does it mean to “freeze” an address in Electrum?
When you freeze an address, the funds in that address will not be used for sending bitcoins. You cannot send bitcoins if you don’t have enough funds in the non-frozen addresses.

https://electrum.readthedocs.io/en/latest/faq.html#what-does-it-mean-to-freeze-an-address-in-electrum

[20kevin20]

IF you use your Ledger togheter with Electrum you can use the "freeze Coin" option:

What does it mean to “freeze” an address in Electrum?
When you freeze an address, the funds in that address will not be used for sending bitcoins. You cannot send bitcoins if you don’t have enough funds in the non-frozen addresses.

https://electrum.readthedocs.io/en/latest/faq.html#what-does-it-mean-to-freeze-an-address-in-electrum

Thanks. I don't use it with Electrum, unfortunately.
Anyway, I thought there might've been some risk if I'd spend my BTC balance with the dust from it too, but as soon as it hasn't been connected in any way to my identity ever since I started using Bitcoin, I think I'm fine. I don't plan to share my ID with anyone in the near future either.

I've browsed a little through my transactions and apparently I cannot find the Bitcoin dust txid. Might have been a paper wallet or my mobile one. I've found two of the dust transactions I had through alts though, I'm going off-topic but I'll leave the information here in case anyone is interested to research them.

First, the most recent dust tx, we have a Ripple transaction with a memo (description) attached to it: "NETWORK ANNOUNCEMENT: Ripple unlocks 50% stake in XRP, indicates massive airdrop www.*hidden fraud domain*". Seems like someone tried to scam by sending dust XRP with links in memos. I looked the memo up on Google and found this wallet: https://bithomp.com/explorer/rpWhspQz4DX5N5NoPDpvFtkcpyZiNa9Uv1, which confirms my doubts.

A second dust sent to my wallet was through a LTC tx: https://live.blockcypher.com/ltc/tx/c0ad0412027347d137f5f8c18ad0b61064d7051a8b57f97d09101bceabfd8c07/. The user apparently sent this to 2000+ different wallets.

[fillippone]

A nice read about dust attacks I found recently, even if the article itself is quite old:

Bitcoin Data Science (Pt. 3): Dust & Thermodynamics

It contains, for the most technical experts, a good technical analyis of dust, how it is created, and how it is sort of "natural" in bitcoin system.
What it is not natural is the malicious use you can do with dust.

We examine the history and future of dust: containers (UTXOs) of bitcoin that cost more to spend in fees than they hold.

The amount of dust in the blockchain is determined by the current UTXO set and transaction fee market. At peak fees (~December 2017), between 25–50% of the UTXOs in the Bitcoin blockchain could have been called dust! At the same time, the amount of BTC contained in these dusty UTXOs was small: only a few tens of millions of dollars. So, depending on how you measure it, dust is either a huge problem or a trivial one. Either way, we discuss possible solutions for minimizing new dust and cleaning up existing dust.

Proof-of-work strongly anchors bitcoin in the physical world and makes it subject to the laws of thermodynamics. Energy expended by miners secures the blockchain, but this useful work is accompanied by an increase in entropy and the production of waste heat. If the Bitcoin blockchain were an engine, dusty UTXOs would be a part of the waste heat it exhausts. As no engine is perfectly efficient, Bitcoin will never stop making dust.

[fillippone]

Dust Attack hitting the news again on Coindesk:

Dust Attacks Make a Mess in Bitcoin Wallets, but There Could Be a Fix

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

Nothing new, or nothing already written in this thread.

Two passages need a special comment, in my opinion:

CoinDesk reached out to Chainalysis and CipherTrace to ask if they use dust in their analytics. Both companies denied using this technique, though Chainalysis Manager of Investigation Justin Maile added that dusting is “more often [used] by investigators” to trace illicit funds. Maile continued that exchanges may use dusting to trace stolen funds following a hack.

LOL!
Of course they don't do that! But other do that!
Facepalm. Broken Logic. Hypocrisy.
Chain analysis firm are bad.
Bonus Read: A treatise on privacy

Also this one:

“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.

This is exactly the point: they send you the dust hoping you do stupid things with that (like consolidating with your existent UTXO).
Please note that consolidating doesn't mean aggregate the outputs, something that might require your intervention, but also aggregating those UTXO's as a transaction input. Something a wallet could do, if you don't take the necessary precautions.

[1miau]

Any opinions here:

We are organizing a football betting challenge similar to this one: Sportsbet.io's English Premier League Football Pool Sign-Up Thread 0.0045 2 Join

People have to pay 2 mBTC to register and we will use this BTC as winner price. Now, an unknown person has sent 547 Satoshis to our escrow address: https://blockchair.com/bitcoin/transaction/d3239fcd4ed507b1943ea4fe3cec19fff380d9cfb96d5a3b27bfba549be74a18

It's one of more than 500 addresses where 547 Satoshis each were also sent by that unknown address:




My first impression was a dust attack but it makes no sense because our escrow address is public and contains funds anyway...

This transaction happened 2 days ago and just now someone sent again 547 Sats to our escrow address: https://blockchair.com/bitcoin/address/1LC8VWsLBnaXq7v6vRuxbUYNj4frpmtnUg
Does anyone have an explanation?