There are two separate possible case:
- If a dust attack hits an empty address, you can actually damage your privacy, if you are not aware of this attack. If you spend from that address, you are probably going to use the dusted UTXO with your other UTXO's, effectively linking a "past" address of yours with your current transaction. This is very dangerous.
- If a dust attack hits an address with a positive balance it is no major damage, I think: the dust comes together in the address with some other UTXO's, so it would have been trivial to follow those coins without the dust in the first place. Dust acts as a not-so-cheap marker of your public UTXO's. You know you are being tracked anyway on the blockchain, so you act consciously.
The action to be taken are then different:
- If the dusted address is empty: "Freeze address", this will prevent using the address in any future operation in the wallet
- If the dusted address is not empty: "Freeze Coin", this will freeze only the dusted UTXO (you can think as UTXO and Coins as synonymous, while the address will be able to spend the UTXO as usual.
ELECTRUM
I will show you the coin Control feature in Electrum, one of the most used wallet to offer such a feature.
If you are using another wallet and you get dusted, my suggestion is to import your wallet in Electrum and do the following steps.
To avoid privacy concerns I created a test wallet, dusted it and censored some relevant information.
This is the dusted Wallet.
I am assuming the dust hits an empty address, maybe one I used in the past and is now empty after a spend.
Freeze Address
Since the address is empty, and the only associated UTXO is dusted, I decide to block the whole address.
This will make this address unable to spend any coin.
1.Make Electrum show all your Addresses.
Click on "View" menù, select "Show Addresses"
2. Locate the address where you received the dust.
You might want to label it. In this case it is easy, as it is the only one address with a positive balance. In your case you might have many positive addresses.
3. Freeze the dusted address.
Right Click on the dusted address, select "Freeze"
4. The Address is now Freezed.
The address is highlighted in dark Blue
From now on, all the UTXO pertaining that address won't be used until the address is Freezed.
Those UTXO won't mix with other "clean" UTXO then, defending us from the Dusting Attack.
Freeze Coin
In case you receive the dust on an address with some other coins, you might not lose such coins. Then you can freeze the dust UTXO only.
1.Make Electrum show all your Coins.
Click on "View" menù, select "Show Coins"
2. Locate the UTXO that are the Dust.
You might want to label it. In this case it is easy, as it is the only one UTXO. In your case you might have many UTXO's.
3. Freeze the Coins.
Right Click on the dusted address, select "Freeze"
4. The Coin is now Freezed.
The coin is highlighted in dark Blue, and won't be spent in future transactions.
