Blockchain Security Series
Popular Blockchain Attacks & Security Vulnerabilities — Part 2
Dusting Attack on Blockchain
In part 2 of this series, we will be discussing Dusting Attack on Blockchain.
Dusting attack is a malicious activity where the attacker can break the privacy of cryptocurrency users by sending tiny amounts of coins to their crypto wallet.
Thereby the transactional activities of those crypto wallets can be easily tracked down by the hackers which will turn to the discovery of the person/institution behind that wallet.
What is Dust?
Dust refers to a tiny amount of coins.
It is an amount that is so small that most users don’t even notice.
For example,
If we consider Bitcoin, the smallest unit of Bitcoin is one Satoshi.
1 BTC = 100,000,000 SATOSHI (100 million)
1 SATOSHI = 0.00000001 BTC
Here, Dust refers to one Satoshi to a few thousand Satoshis.
What is the use of Dusting Attacks?
Dusting Attacks are used to determine the identity of an individual or an organization behind a crypto wallet.
They can also be performed by authorities to track cryptocurrency users to identify illegal activities.
Companies, Research labs, and Governmental agencies are also deploying Dust attacks to de-anonymize blockchain networks.
How do Dusting Attack works?
Step 1:
The attacker first sends dust transactions to a large number of target addresses. Since these transactions are small in amount, people won’t even notice this in their wallets.
Step 2:
The attacker then tracks those funds and all transactions of the dusted wallets and performs a combined analysis to identify which addresses belong to the same wallet. We all know that anyone with a crypto wallet can create multiple addresses.
Step 3:
The primary goal is to link the dusted wallets to their respective individuals or organizations. Eventually, the attacker finds the individual or an organization existing behind the dusted wallet. If the wallets get de-anonymized then attackers may use this knowledge against their targets either through phishing attacks or cyber extortion threats.
Dusting Attacks in Reality
On Aug 2019, the Binance and Litecoin community faced a potential Dusting attack. Around 50 Binance Litecoin addresses received a fractional amount of Litecoin (0.00000546).
How do prevent Dusting Attacks?
Dusting attacks purely rely on the combined analysis of multiple addresses. You can prevent this by simply not moving the dust funds you receive. If you could successful, the attackers won’t be able to make the connections they need to de-anonymize the wallets.
A sneak peak to Popular Blockchain Attacks & Security Vulnerabilities — Part 1: 51% Attack
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