For those of us in the Northern Hemisphere, spring is in the air, which means it is time to start spring cleaning, particularly for those of us who own cryptocurrency.
If you engage in regular cryptocurrency trading, you likely have small amounts in your exchange wallet that are too little to trade or withdraw because they do not meet the minimum transaction value requirements.
Certain kinds of dust can even be dangerous, particularly if you were not the one who gathered it.
Thankfully, there are several solutions available to deal with the issue of gathering so much “crypto dust.”
Find out what crypto dust is and what you can do to prevent it.
What is crypto dust?
A portion of a cryptocurrency token that is too small to be traded is referred to as “dust” in the markets. The majority of cryptocurrency dust thus sits idle in exchange wallets.
There are instances where the holdings in question are so tiny that they do not even qualify for minimum withdrawal value requirements, making it impossible to transfer them from the exchange into a personal wallet.
Although the term “crypto dust” may not seem like a big deal, a sizable amount of money is actually kept inactive in wallets that could be used to boost industry growth and provide market liquidity.
Can I do anything about my crypto dust?
The policies of the exchange where the cryptocurrency dust has been accumulating will determine how well you are able to handle it.
Regretfully, not much has been done to address this issue by most exchanges.
In order to pay transaction fees, the majority of exchanges have minimum withdrawal values and trade size requirements of, say, 0.001 of a token.
If you do, however, have any smaller holdings on Binance, you can use the exchange’s “Convert into BNB” feature, which enables users to instantly convert all of their holdings—including crypto dust—into Binance Coin (BNB), the company’s native currency.
However, there are alternative solutions to your dust issues even if your exchange does not provide this kind of functionality.
Adding more cryptocurrency dust to the point where its value reaches the minimum trading limit is another straightforward solution. You can then change it into the token of your choosing.
As an alternative, you could top off your dust until it satisfies the minimum withdrawal value requirement set by your exchange. You can then use the features that are available for cleaning up cryptocurrency dust and move your smaller holdings to an exchange.
As long as you have a verified account and have set up a fiat on/off-ramp, withdrawing the money to your bank account should be a simple process from there.
The dark side of dust: Dusting attacks
Dusting attacks are a necessary topic of discussion when discussing crypto dust. Although traders may find it inconvenient when cryptocurrency dust accumulates on exchanges, privacy-conscious cryptocurrency users may find the threat of a dusting attack to be far more concerning.
In general, malicious actors trying to determine the identities of users on a public blockchain network like Bitcoin (BTC) are known as dusting attacks. To accomplish this, they transfer a small quantity of cryptocurrency to a Bitcoin wallet.
Then, it is possible to monitor the ensuing transactional activities that utilize these addresses in an effort to learn more about the flow of funds and possibly even the true identity of the addresses they target.
The developers of the privacy-focused bitcoin wallet Samourai Wallet warned of the dangers of this type of attack on Twitter back in October 2018, stating:
“If you have recently received a very small amount of BTC in your wallet unexpectedly, you may be the target of a “dusting attack” designed to de-anonymise you by linking your inputs together.”
It pays to be extremely cautious if any tiny, mysterious cryptocurrency payments appear in any of your wallets, even ones you do not use very often, if you value your privacy.
To make sure your privacy is protected, you might want to send your coins through a mixing service if you do receive a small transaction like this.
Whether or not you are the one who created the dust, cleaning it up can be profitable and secure.