You probably have some dust in your wallet if you interact with cryptocurrency, be it trading or conducting transactions. While this dust is harmless and commonplace, it can create privacy issues in certain situations. In this article, you will learn what crypto dust is and what to do with it. Suppose you regularly conduct transactions with cryptocurrencies and currencies. In that case, we recommend improving your experience using Rates – All About Finances, which allows you to track currency exchange rates at Ukrainian financial institutions.
What Is Crypto Dust?
Crypto dust is the name given to the traces of cryptocurrencies that remain after transactions occur. With the trading volume of Bitcoin at $266 M, it can be quite a sum. Still, these are small amounts (several hundred Satoshi), which do not make sense to send since the transaction fee is several times higher than their value. Since the amount of these funds does not meet the minimum withdrawal value requirements, they also cannot be moved to a personal wallet.
Crypto dust is present in most blockchains and is not a problem. Some users don’t even know about its existence. However, it can pose a threat if it is transferred to you by an attacker and you inadvertently share it with your fixed assets.
The scheme works as follows: de-anonymizers send crypto dust to thousands, sometimes even thousands, of wallet addresses. When enough deterministic connections are made between the analytics firm’s wallet and the recipient’s address, an attacker can link the wallet address to a specific person or business.
You don’t have to worry about your privacy or anonymity if you don’t mix the dust with other assets. But when a user makes a transaction, many wallets perform the UTXO ( unspent transaction output) merge automatically.
Exception: The user manually sets which UTXOs to spend and which are not. But this option is not available in most services.
What Is The Position of Crypto Analysts?
Chainalysis and CipherTrace, two major analytics companies, deny using crypto dust. However, Chainalysis investigators claim dusting is typical for finding illegal or stolen funds.
According to the CEO of blockchain analytics startup CipherTrace, attackers could use dusting to identify users who could later be susceptible to phishing or extortion.
In addition to the risk of losing anonymity, mixing UTXOs leads to the user having to pay more in fees than the crypto dust itself is worth. This creates the problem of clogging up the wallet, leaving behind tiny UTXOs, merging them and losing privacy.
Wallets like Samourai and Bitcoin Core support freezing UTXOs, which prevents them from being combined into one transaction. However, most ordinary people do not have access to this feature.
Is It Possible to Get Rid of The Accumulation of Crypto Dust?
Taking advice from experts, the creators of the Bitcoin Core wallet increased the crypto dust limit (the minimum amount an address must have to use the network). For example, the Bitcoin dust limit in most wallets is 546 satoshi (0.00000546 BTC, or approximately $0.8).
If the limit is increased, dust attacks will be more expensive. However, this decision will affect those users who conduct transactions with small amounts. In addition, increasing the crypto dust limit may not solve the problem since cryptanalysts will be willing to pay to send dust.
However, this will create a deterrent to prevent unscrupulous users from wasting blockchain space on trivial transactions.
The Bitcoin blockchain records every transaction that ever occurs on the network. Dust accumulation causes Bitcoin’s transaction ledger to become overly congested, as block space that could accommodate more significant transactions is used for transactions worth pennies.
To ensure anonymity, Bitcoin Core developer Peter Todd proposed another solution: processing UTXO dust and using it in CoinJoin transactions. A Samourai spokesperson also said that such a feature may appear.
Is It Worth Getting Rid of Crypto Dust?
In 2023, according to Statista, there were more than 425 million crypto users worldwide. Perhaps everyone has come across such a concept as crypto dust. Crypto dust is more of an annoyance than a serious problem. Should you worry about crypto dust in your wallet? It depends on how concerned you are about anonymity. If you are the recipient of crypto dust, this does not mean that the users who sent the dust are criminals who have access to your account. It is unlikely that even if you use crypto dust, its sender will link it to your account through blockchain capabilities. In addition, the most secure crypto wallets make it much more difficult for crypto dust senders to do this.
If you still want to get rid of crypto dust and safely make transactions, including using Visa and Mastercard cards, there are several ways to do this. Some exchanges allow users to combine dust from multiple addresses into one address or convert all of their dust into another crypto asset. Others award users credits in their currency for it.
To evaluate the available methods, check your wallet and exchange – Binance, Uniswap, or any other. If there are no options for cleaning, don’t worry.
In the crypto world, dust is a byproduct of numerous trades and transactions and is found on most blockchains. Crypto dust is not dangerous but can be distributed en masse to different wallets. And the sender’s goals may be other. The technical support of your crypto wallet or exchange can help you decide what to do with your crypto dust. Interaction with crypto-supported services is as simple as with traditional Aetna and JPMorgan Chase. If you work with cryptocurrency, then at some point, you will probably convert the cryptocurrency into one currency or another. We recommend using the Rates service if your transactions are related to currency exchange rates in Ukrainian financial institutions. The service is available at any time of the day, wherever you are – Toronto, Chicago, or Berlin.