Hackers reveal cryptocurrency privacy loopholes
Besides being an exciting new vessel for making money, anonymity is a part of what makes cryptocurrency so attractive.
The ability to transact online in the absence of a central bank has been a major draw to privacy-savvy crypto adopters since Bitcoin’s inception in 2009. However, the general statement claiming that crypto -coins will keep you hidden online has a few holes.
Hackers use very complex methods to roll back transaction data to identify the original spender, using a method called “dusting”.
What the heck is dust, I can hear you ask.
The total amount of bitcoin in circulation is increasing day by day as miners around the world join the game. With a single coin valued at around $ 49,300 at the time of writing this article, the number of divisible units used to represent bitcoin increases.
Tiny values of these units, or “Satoshis” (named after the illusory inventor of the world’s first crypto), can build up deep in people’s crypto wallets out of the blue.
The amounts are often so small that people hardly notice.
This is because the minimum unit of bitcoin, 0.00000001 BTC, is currently worth around $ 0.0005, making it almost impossible to trace. Some online wallets even hide small balances, the total amount of which is negligible.
But hackers have seen the value of “dust” build up across the world, using the particular phenomenon to compromise the privacy of a number of crypto users by sending small amounts of digital currency into wallets and by finding the transaction on the blockchain.
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Blockchain technology is the basis of cryptocurrency, storing market activity on a large network of computers, which allows bitcoin and other cryptocurrencies to function without the need for a central authority.
When a user performs a transaction, a unique code called a public key is generated and saved on the blockchain, rather than their personal information.
By linking the transaction to the blockchain, hackers are effectively able to track past spending information for specific wallets.
Wallet provider Samurai Wallet first reported dust attacks in 2018, warning customers to be on the lookout for small amounts of crypto thrown into their wallets.
“If you’ve recently received a very small amount of BTC in your wallet unexpectedly, you may be the target of a ‘dust attack’ designed to de-anonymize you by linking your entries together,” the official SamuraiWallet account tweeted. . “Samurai users can mark this as ‘Don’t spend’ to nip the attack in the bud.”
“To spot one, a dust transaction usually has one address on the sender’s side and hundreds or thousands of addresses on the other with the same little traces,” Crypto News Explain.
While the overall threat to the privacy of regular crypto users seems slim at this point, the dust phenomenon has revealed a very real hole in the claim that cryptocurrencies are 100% private.
The bottom line is that if you are up to something really bad with your cryptocurrency, there is always a possibility that you are linked to your actions online.
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