A minuscule amount of a crypto asset that is less than the minimum transaction fee, rendering it economically impractical to transfer.
"Dust" in the context of cryptocurrencies refers to an amount of a crypto asset that is so small that it is less than the minimum transaction fee. As a result, it becomes uneconomical to move this amount as the transaction fee would be greater than the value of the asset being transferred. These tiny amounts often remain dormant in wallets indefinitely, effectively becoming "stuck" or unusable.
"If you have 0.00001 Bitcoin in your wallet, it might be considered dust because the transaction fee to move it could be higher than its value."
The concept of dust is closely related to the way blockchain networks handle transaction fees. These fees are used as incentives for miners to include transactions in the blocks they mine. If the value of the transaction is less than the fee, miners have no incentive to include it in a block, making the transaction unfeasible.
In UTXO-based blockchains (Unspent Transaction Output) like Bitcoin and Bitcoin Cash, dust refers to UTXOs that are too small to spend economically. Each UTXO requires data storage on the blockchain, and when these tiny outputs accumulate, they can increase blockchain bloat without providing practical utility.
"Due to the high transaction fees on the Bitcoin network, small amounts of Bitcoin in a wallet can often become dust."
The dust limit varies between different cryptocurrencies and depends on their fee structures and network conditions. For instance, on Bitcoin Cash (BCH), the dust limit is significantly lower—often a fraction of a cent—due to its larger block size and generally lower transaction fees. This makes BCH more practical for micropayments compared to Bitcoin (BTC), where the dust limit can often be between $2-10, and even more on Ethereum (ETH) due to high gas fees.
Some exchanges and wallets implement their own dust thresholds, below which they won't process withdrawals or transactions to prevent users from sending economically impractical amounts.
"With the rise in Ethereum's gas fees, even a few dollars of ETH could be considered dust as it might not cover the transaction fee."
"Dust attacks" are a privacy concern where malicious actors send tiny amounts of cryptocurrency (dust) to multiple wallet addresses. When these dust amounts are eventually spent together with legitimate funds, they can help attackers track and deanonymize users by linking their transactions and wallet addresses.
To protect against dust attacks, some wallets offer features to mark certain UTXOs as "do not spend" or provide options to consolidate numerous small amounts during periods of low network fees.
"After receiving multiple tiny transactions from unknown sources, the user realized they might be targets of a dust attack attempting to compromise their privacy."
All terms and definitions may update as the Cryptionary improves.