A spate of tech media reports today are focusing on what experts are calling a ‘dusting attack’ on the Litecoin community as over 50 Binance Litecoin wallets were the recipients of tiny bits of additional LTC value August 10.
“This was the first time a large-scale attack of this kind had occurred,” writes Joshua Mapperson at Cointelegraph. “Dusting attacks are not only limited to Bitcoin or Litecoin but can be done on any public blockchain.”
Officials think the attack was actually more widespread: Jan Happel, co-founder of blockchain data provider Glassnode, believes more than 300,000 Litecoin addresses were affected.
“We have done a quick query into the LTC blockchain and analyzed the number of utxo’s that carry a smaller value than the mean tx fee that day,” Happel said as quoted in Mapperson’s story describing the analytical processes behind scrutiny of the attack. “ If a UTXO contains less balance than the minimum amount required to spend it (fee) that day, it becomes stuck/unspendable — this is what we technically define as dust.”
It’s news. But the big news, for many investors who don’t understand this kind of activity, is that hackers may be targeting cryptocurrency holders by scattering these small amounts of value or ‘dust’ over hundreds of thousands of wallets.
A dusting attack happens when some malicious party sends very small amounts of cryptocurrency value to a large number of holders – why does this unexpected largess constitute an attack?
It’s because these parties can then analyze the addresses themselves, and link them back to holders in a more elaborate scheme to follow up with cyberextortion, spearfishing, ransomware or other kinds of subsequent attacks that simply target identified holders of assets.
The anonymity of most blockchains is what makes the dusting attack effective and disturbing.
“Since Bitcoin is open and decentralized, anyone is able to set up a wallet and join the network without providing any personal information,” writes an expert at Binance Academy in a tutorial that every crypto fan should read twice. “Although all Bitcoin transactions are public and visible, it is not always easy to find the identity behind each address or transaction, and this is what makes Bitcoin somewhat anonymous – but not completely.”
The bottom line here is this – look out for these dusting attacks anywhere they happen. When you see a small unexplained bit of value show up, look critically at that. Experts also suggest taking holdings to cold wallets that are not connected to exchanges, so that people can’t monkey with your accounts this way. The common wisdom is ‘get in, do your trades and get out’ rather than letting your assets hang out there on the network where they can be exploited.
Look for more as hackers try everything they can to make off with other people’s digital assets. We’ll cover the next big dusting attack as it occurs.