You might have seen a tiny amount—a few satoshis left behind when you try to trade or transfer all the bitcoins in your wallet. This leftover amount is called bitcoin dust. The same happens with all the cryptos. Such non-transferable small amounts that get leftover in a wallet address are called crypto dust.
Why does this happen? Usually, these amounts are lower than the network fee or the transaction fee for that particular crypto. For example, if you have Rs. 5 in your bank account and your bank charges Rs. 10 for every transaction, you can’t transfer that 5 rupees unless you add an additional Rs. 10 to your account. In the same way, you will need to add more crypto to your wallet address to meet the transaction cost and transfer the leftover dust amount. Sometimes, the platforms you use might have a transaction limit or additional fee which also decides the leftover amount in your wallet.
A dust limit is the minimum amount of crypto you need for a valid transaction on a network or a platform.
For example, one whole bitcoin is made of a hundred million satoshis (that’s 10 crores or 10,00,00,000)—much like one whole Indian Rupee is made of 100 paise. You need to spend at least 546 sats to make a transaction and therefore 546 sats is considered as the dust limit for Bitcoin. Anything less than this amount can’t be transferred since it isn’t enough to pay the transaction cost of the network. The transaction fee can lower in the future so does the dust limit. Therefore, you can say that the dust limit is a function of the transaction fee.
Crypto dust is not harmful to your account or the blockchain network. But, you might have heard of Dusting or dusting attacks.
What are Dusting and Dusting Attacks?
Dusting is when a small amount of crypto is sent to a large number of wallet addresses–maybe thousands and more. These accounts are then being monitored using blockchain explorers. Analyzing these transactions may lead to identifying the person behind the wallet, a network of transactions, and so on.
Dusting is also called dusting attacks since it acts against the will of the account holders. Anyone on the internet can analyze these attacks using the tools and a public block explorer— meaning the “attacker” need not be the one doing the dusting.
Dusting attacks are not always done by hackers or robbers. Sometimes, dusting is used to identify the person or the network of transactions involved in criminal activities. On-chain analysis or blockchain analysis firms use dusting for academic purposes or even as a stress test for the network. Dusting is also used to advertise to a large number of users. Scammers also try dusting to get the personal information of the wallet addresses to send phishing emails or cyber extortion.
There have been dusting attacks in the past targeting certain networks. These are not a threat to the functioning of a blockchain or affect the wallet which gets dusted. In fact, post such dusting attacks, many exchanges now offer to club your crypto dust into one single cryptocurrency—mostly to their own native coin. Wallet providers have also come up with solutions for dusting by tracing the dusty crypto and marking it as “do not spend”. Therefore, dusting attacks are not much harmful unless you highly value your privacy.
Should you be worried about the crypto dust in your wallet? Not really. It is very normal to have these dust amounts in your wallet. You just need to be careful if you are getting any unexpected crypto from unexpected sources in your wallet. With crypto dust, you can always add more crypto and transfer the dust amount or just let it stay in your wallet.