Dust Transaction Definition

A dust transaction is a transfer of a tiny amount of cryptocurrency whose value is smaller than the network fee needed to move it. Because the fee would cost more than the coins themselves, this amount is usually impractical to spend.

Why dust exists

Dust can appear naturally when previous transfers and fees leave small remainders in a wallet. In UTXO-based systems, multiple small outputs can add up to a balance that is technically there but effectively stranded because any attempt to spend it would require a higher fee than the value you would receive. These fragments can accumulate over time and sit in your balance even though they are uneconomical to move. On some platforms, the amount can be worth less than a cent and may not be tradable on an exchange.

Where you’ll encounter it

You might notice dust in Bitcoin-style wallets that track unspent outputs, or in any account where fees make tiny transfers uneconomic. Some exchanges and tools let users consolidate or convert dust so that balances become usable again.

Dusting attacks

Dust can also be sent on purpose by outsiders. In a dusting attack, many wallets receive tiny incoming transfers so the sender can watch how those wallets spend later and try to link addresses to a person. This tactic aims to chip away at privacy by correlating on-chain movements with off-chain identity.

Handling and prevention

Common approaches include ignoring unsolicited tiny deposits and using wallet features that hide, isolate, or sweep dust when supported. If your wallet or exchange offers a dust conversion or consolidation option, using it can tidy up balances without interacting with suspicious transfers.