Insights into the Litecoin network dust attack.

Last week, on August 10th, the Litecoin network experienced a ‘Dust Attack’, in which small amounts of Litecoin were deposited into multiple addresses on the network to de-anonymize network participants.

A small dust transaction of £0.00000546 ($0.0004025) is less than the transaction fee. This means that it cannot be used without being included in other coins held by the user. This gives attackers insight into how many people are on the network, how many addresses they have, and how much value they hold with just a few data points. There is no need to use dusting techniques to spy on your network, as other methods can achieve the same results. However, while dusting certainly speeds up the process, it also gives others quietly monitoring the network greater insight into the attacker.

The attack was first discovered reported James Jager, project lead at Binance Academy, told CoinTelegraph:

“It was network-wide, meaning it affected every Litecoin user who had an active Litecoin address at the time. The address of the person responsible for the dusting attack can be found here: https://blockchair.com/litecoin/address/LeEMCDHmvDb2MjhVHGphYmoGeGFvdTuk2K” “We learned about the dusting attack on Saturday morning when one of our Binance angels received a small message . Put the LTC amount into your Litecoin wallet.”

Despite initial claims, we can confidently report that not all users were affected, and additional insight provided by Jan Happel, co-founder of blockchain analytics firm Glassnode, shows that around 300,000 LTC addresses have been left gathering dust. It appears that there is. If accurate, this attack means I spent approximately £1.638, or $120.9, at the time of writing.

“We performed a quick query on the LTC blockchain and analyzed the number of utxos delivering value less than the average transfer fee that day. If a UTXO contains a balance less than the minimum amount (fee) required to spend that day, that UTXO will become stagnant or unusable. “This is what we technically define as dust.”

This is not the first time a dust attack has occurred on the network. The last confirmed large-scale attack occurred on April 7, 2019, and can be confirmed by an unusual spike in sending addresses, according to data provided by bitinfocharts. On this day, the metric peaked at just over 130,000 addresses, compared to a typical daily address of 40,000.

While this type of surveillance cannot be avoided by participants using the Litecoin Core full node client, they have the option to ignore transactions through the terminal, effectively isolating them forever. Likewise, wallets like Samurai also enable this feature and encourage Bitcoin users to use it whenever they dust themselves off.

It is likely that your cryptocurrency activity is already stored and grouped somewhere by some private company or government for one purpose or another, and this is to be expected in the most open financial system in existence. However, with the advent of new cryptographic obfuscation methods such as Confidential Transactions and MimbleWimble, developers are already researching ways to make it more difficult for these attackers to mine financial data.