Understanding Crypto Dust
Crypto dust refers to small amounts of cryptocurrency left over after trades or transactions. This term is used to describe leftover “dust” on exchanges as well as “Dusting attacks.” Let’s learn about Dust and its implications.
Cryptocurrency dust is a common byproduct of using blockchain-based networks and typically has a negligible monetary value, often ranging from fractions of a penny to a few dollars. Dust is created when transactions on the blockchain leave trace amounts in the sender’s address, leading to unspent transaction outputs (UTXOs). These amounts are usually too small to cover transaction fees or meet the minimum trading limits set by exchanges, rendering them essentially unusable.
Dust On Exchanges
Most people tend to encounter dust for the first time when trading on exchanges leads them to see a little left over crypto after an exchange. This can lead to untradable amounts of crypto in a wallet. Some exchanges will allow you to convert this dust. Others don’t. Let’s look at one who does, Binance.
Managing Dust on Binance
Binance offers a feature allowing users to convert their small balances or crypto dust into BNB (Binance Coin), BTC (Bitcoin), or ETH (Ethereum).
The balances eligible for conversion must be under $20 but above $0.01 in value on Binance.US, and it is similar for Binance Global as well. The process involves selecting the small balances in the Binance wallet and converting them to the chosen cryptocurrency. This conversion is subject to a small fee, and users must wait at least six hours between conversions.
General Strategies for Cleaning Crypto Dust
Several methods exist for cleaning up crypto dust. Some exchanges and wallets allow users to consolidate dust from various addresses into a single address or convert the dust into a different crypto asset, often the exchange’s native currency. Another approach involves making a trade from another address to the address with the dust, thereby meeting the dust limit and making the assets usable again.
Risks and Prevention of Dust Attacks
Dust can be used in dusting attacks, where small amounts are sent to multiple addresses. The attackers track these transactions to de-anonymize users or link multiple addresses to a single wallet. To prevent such attacks, some wallets and exchanges offer features to block the spending of dust.
For example, Samourai Wallet notifies users of transactions below the dust limit and allows them to mark these as “do-not-spend,” effectively rendering the dust inert. Wasabi Wallet, using its ZeroLink technology, has been upgraded to hide dust from users by default, thus protecting users against dust attacks.
While you don’t need a specific wallet to stay safe in crypto, it is good to know about the existence of these attacks.